Bringing your idea to life
Now that you know the kind of business that'll suit you, your mind's probably racing in a hundred different directions. Focus: Here's a step-by-step plan of action.
Step 1: Find Your Audience.
Narrow your focus by asking yourself who your clients are. How old are they? Are they male or female? Where do they live, shop and play? What do they like, and what do they value?
Step 2: Make a Name for Yourself.
Consider your target customers when choosing a name for the business. If your audience's priority is looking cool, a stodgy name won't do.
Once you've found some names you like, test them. A name that's difficult to pronounce may rob you of word-of-mouth referrals. Likewise, a hard-to-spell name will defeat efforts to find your business in the phone book. Also investigate the availability of trademarks and Web site domains for whatever name you choose.
Step 3: Choose a Structure.
Your business structure affects your taxes, how you raise money, even how much paperwork you need to do. The types of business structures are:
- Sole proprietorships, which have one owner.
- Partnerships, which have two or more owners.
- Corporations, which provide liability and debt protection for owners.
- Limited liability companies, which combine aspects of corporations and partnerships.
To help you pick a structure, speak to an attorney who's knowledgeable about your industry. Also, ask other entrepreneurs for their advice.
Step 4: Plan Ahead.
A business plan helps you solidify your thoughts about your business. You also need a business plan when applying for loans or other financing. Your plan should contain seven sections: Executive Summary, Business Description, Marketing Strategies, Competitive Analysis, Design and Development Plan, Operations and Management Plan, and Financial Factors.
Step 5: Get Permission.
Starting a business involves obtaining myriad licenses and permits. Some take longer than others to get, so don't procrastinate. And although the paperwork may seem tough now, it's easier to get licenses before you open your doors than later, when you may face substantial fines or penalties.
Depending on your industry and business structure, you may need some or all of the following: fictitious business name, city or county business license, health department permit, liquor license, fire department permit or sign permit.
Step 6: Get Money.
Look close to home when you first search for business financing. Savings, mortgage or retirement accounts may be prime sources. Perhaps friends or family can help. Just make sure you aren't putting too much at risk.
If your business will realize a high rate of return, also consider venture capital investments, angel financing and loan guarantees from the SBA.
Step 7: Keep the Books.
An accountant or a software program can help you track expenses, accounts payable and receivable, inventory, payroll and taxes. You'll also need to create cash-flow statements and balance sheets for use with your business plan.
Step 8: Set Up Shop.
Find a business location convenient to your clients. Study traffic patterns and neighborhoods before signing a lease. Or consider starting off your business at home to save money.
In addition to furnishings and a computer, your business needs stationery. Consider hiring a designer to create a logo for your business cards and letterhead. Your Web site should match or complement those designs.
Step 9: Hire.
Most businesses eventually need employees. Begin by writing a job description, then use it to compose a help wanted ad.
Have job seekers fill out applications to help you compare their qualifications. Check their references. Plan interview questions in advance, and take notes on the answers.
Instead of hiring full-time employees, look into college student interns or temps for short-term projects.
Set employee policies from the start, for legal reasons. Written policies are best. Consider attendance, discipline, dress code, payment and overtime.
Step 10: Make Yourself Known.
Determine the best ways to reach customers-cable TV, radio, magazine and newspaper ads; fliers; word-of-mouth; direct mail; or public relations. Once you've pooled your ideas, write a marketing plan to help you evaluate which strategies work.
STRAIGHT TO THE SOURCE
You don't have to pound the pavement to get entrepreneurial help. This should do nicely.
- SBA, (800) U-ASK-SBA
- SCORE (Service Corps of Retired Executives), (800) 634-0245
- Association of Small Business Development Centers (SBDCs), (703) 764-9850
- Minority Business Development Agency, (202) 482-5061
- National Business Incubation Association, (614) 593-4331
- Need money? Go to www.microenterpriseworks.org for a list of organizations that provide microloans.
"10 Steps to Start-Up" is adapted from Start Your Own Business: The Only Start-Up Book You'll Ever Need (Entrepreneur Press) by Rieva Lesonsky and the staff of Entrepreneur magazine.