One Step At A Time
You yearn to start your own business, but the thought of doing so seems overwhelmingly difficult. Not anymore: We've broken the process down into 52 steps-one for each week of the year. Follow them, and at the end of the year, your business should be up and running.
That's our part of the deal. Now for yours: Get up an hour earlier. Stay up an hour later. Set aside two hours every Saturday. Do whatever you can to squeeze out a few hours each week to devote to this step-by-step plan. Those few hours can make all the difference to your future.
1. Get an idea. Assess your skills, interests and experience. Is something missing in your town? What products or services would make your life (and your friends', family's and neighbors') easier?
2. Assess your needs. How much money do you want to make? What type of work do you want to do? What type of lifestyle do you want?
3. Pick part time or full time. Do you have enough money to start full time? Could your business work part time, or would it require your full-time presence?
4. Contact the Small Business Administration (SBA) district office near you (see the Government pages of your phone book or call 800-8-ASK-SBA) for assistance in all aspects of starting and running a business.
5. Define your niche-the more narrowly, the better. Aim at male consumers, and you're all over the map. Target upscale, urban African-American men ages 18 to 25, and you're more likely to hit the mark.
6. Write a brief mission statement that explains your niche. Sample: "Gourmet Goodies is an upscale, leading-edge food company offering high-quality, unusual foods of European origin in sophisticated packaging."
7. Do market research to make sure there's a need for your product or service. Research your industry, competition and customers. Contact your chamber of commerce or business development agency. Local college and university business students may be willing to research for you as a class project.
8. Visit the library for books and publications about your industry. The Encyclopedia of Associations (Gale Research) lists industry associations; also read magazines aimed at your target customer, Census Bureau and Commerce Department publications, and Dun & Bradstreet's Regional Business Directories.
9. Start surfing. Internet sites like AOL, Yahoo! and Netscape offer access to business databases for business news, industry trends and company-specific information. Visit trade association and government Web sites, too.
10. Ask potential customers what they want-whether one-on-one, in focus groups or by phone. Send surveys via fax, mail or e-mail. Offer incentives. Trade associations or list-rental companies (see the Yellow Pages) can provide names.
11. Name your business. Brainstorm ideas for a name that's easy to spell and say, memorable, and conveys what you do. Test ideas on friends, family and potential customers. Choose four or five possibilities; do a trademark search to see if anyone else is using the names.
12. Decide on a legal structure: sole proprietorship, partnership, C corporation, S corporation or limited liability company. Business structure affects tax and legal liability, so consult an accountant or attorney.
13. Start your business plan. Writing it reveals flaws in your idea so you can fix them before start-up. Visit a bookstore for books and software to guide you.
14. Finish your business plan (or at least a rough draft of it).
15. If you plan to start a corporation or partnership, or have employees, you need an Employer Identification Number (EIN) for IRS purposes. Call (800) TAX-FORM.
16. Get licenses and permits. Contact your city's business license department, county health department, fire department and city zoning board to see what you need. If your business uses chemicals or will be doing construction, contact your state's environmental protection agency.
17. Hire a lawyer. Ask businesspeople and professionals for referrals to lawyers with small-business experience. Meet them, check references and clarify fees.
18. Hire an accountant. Ask businesspeople, bankers and professionals for referrals to accountants experienced in your industry. Talk to several, check references and ask about fees.
19. Learn about bookkeeping. Even if you have an accountant or bookkeeper, you need to understand the basics. Contact colleges, universities and adult education programs to see what classes they offer.
20. Go back to school. Small-business owners wear a lot of hats, so if you're weak in any area-from marketing to writing a business plan-take a class to get up to speed.
21. Set prices. Figure out the cost to make your product or provide your service, including materials, overhead and labor. Add enough to make a profit and be consistent with industry prices.
22. List your personal assets (house, savings, stocks and bonds, insurance policies, and valuables) minus liabilities (mortgage, auto loans, credit card and other debts). This is your personal net worth.
23. If you need financing, approach friends and relatives first. Be businesslike: Do a formal presentation that explains your business plan and your idea's potential. Put details of the loan in writing.
24. Look for outside investors (venture capitalists and private individuals, or "angels"). Ask business associates, professionals or suppliers for leads, advertise in business classified sections, network at venture capital groups or contact investment banking firms.
25. Build banking relationships. Talk to lawyers, accountants and entrepreneurs to find banks that have helped similar businesses. Ask bankers about the type and size of loan they specialize in.
26. Say Uncle. If commercial lenders turn you down, your SBA District Office can help you figure out which SBA-guaranteed loans are right for you and complete an application.
27. Find a location. If homebased, ask your city's zoning commission about restrictions. If retail or commercial, consider foot traffic, accessibility, proximity to competitors, taxes, insurance, utilities and maintenance. A commercial real estate broker can help; be sure your lawyer reviews the lease.
28. Investigate business incubators, which provide start-ups with office space, shared services and access to equipment. Call the National Business Incubation Association at (740) 593-4331.
29. Get equipped. Most businesses need a computer and software, printer, scanner, modem, fax machine, copier, phone, answering machine or voice mail, postage meter, and cellular phone and/or pager. Before you buy, comparison shop at manufacturers' Web sites or try the BuyersZone site (http://www.buyerszone.com).
30. Decide what software you need, then buy a computer that supports it. A low-end system (200 MHz CPU, 32MB memory, 2GB hard drive, 33.6 Kbps modem, 8X CD-ROM drive) costs about $2,000 and is enough for many start-ups. A high-end system (300 MHz CPU, 64MB to 128MB memory, 4GB to 8GB hard drive, 12X to 16X CD-ROM drive, 56 Kbps modem) can handle graphics or multimedia and costs about $3,500.
31. Save money by leasing equipment-you'll have lower monthly payments. Or buy used from individuals (check local classifieds), retailers, leasing companies or asset remarketers (see the Yellow Pages).
32. Furnish your office. Look for adjustable chairs, a comfortable desk setup and adequate lighting. Save by shopping at used office furniture stores, in classified ads, or at flea markets and auctions.
33. Get professional-looking business cards, stationery and marketing materials by hiring a graphic designer and copywriter. (Look in the Yellow Pages or ask business owners for recommendations.)
34. Find suppliers through trade shows, wholesale showrooms, buyers' directories, industry contacts, the Business-to-Business Yellow Pages and trade publications. Get quotes or proposals; check references.
35. Develop an inventory control system. Your accountant can help. There are also many inventory software packages on the market, and some software makers will tailor products for specialized needs.
36. Create a credit application for business-to-business
customers. Ask for principals' Social Security numbers, bank
references, trade payment references, business and personal
bankruptcy history, and any other names under which they do
business. Investigate with credit reporting agencies, Dun &
(800-234-3867), industry trade associations and other business owners.
37. Get merchant credit card status. To accept American Express or Discover, contact them and fill out applications; for Visa or MasterCard, you'll need to establish an account through your bank.
38. Assess employee needs. Hiring even one full-timer brings legal obligations. Instead, use temporary workers, secretarial services or employee leasing companies (look in the Yellow Pages), as well as part-timers and interns.
39. Advertise job openings in local newspapers, on college job boards or on job-search Web sites. Ask for resumes; create an application; write down interview questions. Hiring is filled with legal land mines, so visit your library and read up on the details.
40. Develop an employee policy manual (even if you have only one employee), and have your lawyer or a human resources consultant look it over. The Department of Labor (202-219-6666, http://www.dol.gov) can provide information.
41. Get basic business insurance, which includes general liability, workers' compensation, property/casualty and auto. You may also want disability, business interruption, life and health insurance. Industry associations often offer discounts or policies tailored to your industry.
42. Develop a marketing plan. It needs to define how your product or service differs from the competition; describe your target customer (age, sex, location, income, lifestyle); and detail how you plan to communicate to your customers.
43. Set an advertising budget-typically 2 to 5 percent of anticipated gross sales-and allocate it to the media that most effectively reach your target market.
44. Plan a direct-mail campaign and send letters, postcards, fliers, catalogs or brochures to prospective customers. Rent mailing lists through list brokers (see the Yellow Pages) or directly from companies that mail to customers, such as magazine publishers.
45. Get the word out. Send press releases about your company to local newspapers, magazines and television and radio stations.
46. Network everywhere. Attend chamber of commerce meetings and local business groups; tell people at your church, health club, children's school or book group about your new business.
47. Get referrals. Ask friends, business associates and family if they know of anyone who might need your product or service.
48. Get online. Set up a basic Web site with information about your company, answers to common questions and a way to contact you (e-mail, fax or phone) for orders or more information.
49. Polish your sales skills. No matter what business you're in, you're now a salesperson. There are hundreds of books on sales, so start reading. Or listen to sales audiotapes in the car-top salespeople swear by them.
50. Conquer cold calls. Have a script, including likely responses and how you'll reply. Power through by making 100 calls a day for five days; after that, you'll have no fear.
51. Practice for sales presentations. Prepare what you'll talk about, questions and answers. Role-play with a spouse or friend and ask for criticism. If possible, videotape yourself.
52. Open for business. A retail location calls for a grand opening; a service business, a party for potential customers and community leaders. Starting with a splash conveys your excitement to others, so think big!
The following books provide more information to help you get started:
*Starting Your Own Business (Entrepreneur magazine, $59, 800-421-2300)
*Starting & Running Your Homebased Business (Entrepreneur magazine, $59, 800-421-2300)