L = Licenses and permits. You may need city, county and state licenses and permits to run your business. One place to start the permit process is with your city licensing bureau or county registrar, where you can find out what's required. Another starting place is your city hall or local chamber of commerce. Check out your state's home page to learn what permits and licenses are required for your type of business. You may need special permits based on your business type. These include building and zoning permits, food and liquor permits, and resale permits that exempt you from paying taxes on wholesale merchandise.
M = Management team. Creating a management team that brings expertise and credibility to your idea is critical. Your access to financing, customers and sought-after vendors could depend on it. When selecting a management team, "think about future financing," Spann says. "It's not just about operations and marketing."
Some entrepreneurs rely on costly executive recruiters to find their management team. Instead, ply your connections. Go to networking events, and scan the newspaper for recently retired executives who have the knowledge you need and who may be interested in your idea. Ask them for a 15-minute meeting to pitch your concept.
Equity can quickly become an issue when you're building a management team. Spann says you shouldn't plan on owning the majority of the company. Think of it this way: Would you rather have 80 percent of a small pie, or 20 percent of a really big pie?
"To get [a management team], you may have to give up a piece of your company. This is the hardest thing for a new startup to think about," Spann says. "Be prepared to give away as much as 70 to 80 percent of your company [in equity], because you're trying to build a company that makes money."
Once you have a management team in place, keep in mind that you'll have to cast your ego aside as well as some control over your business. "It's your baby, and it's hard to have someone say your baby's ugly," Desai says. "But you have to be able to put the company [before] yourself."
N = Negotiating contracts. Negotiating is a challenge for many entrepreneurs. Start by knowing what will break a deal. "If you don't know your bottom line, you won't know when to walk away," Shuman says.
It's better to negotiate face-to-face so you can read body language. "The eyes tell the truth even when the lips lie," Shuman says. And go to their offices instead of having them come to yours. "It's an opportunity to look at their operation," he adds.
It doesn't hurt, either, to have an attorney read any proposed contracts before you sign on the dotted line. You could be obligating yourself to contract terms that last years, so make sure you're getting a good deal.
O = Organizing your office. How will you keep track of everything? Fail to create an organizational system that works, and your office could look like a tornado just blew through. Luckily, there's help for getting your office in order to maximize your productivity. The SBA has tips here. There are consultants who specialize in organizing, too. See the National Association of Professional Organizersfor a consultant in your area.
P = Pricing. Pricing is an art form, and it leads back to your business plan. You can't make sales projections until you know the market, which tells you how you'll price your good or service. The worst thing you can do is rely on a textbook formula. "That's a great way to overprice or underprice," Davidson explains.
Once you've studied the market, Spann suggests finding a break-even pricing level and offering your first customers a low-cost pricing model for a period of time. "Reduce it enough so you get the business instead of somebody else," he says. Let your first customers know that they'll be preferred customers as long as the company exists. Be careful to include preferred price breaks in your projections, or you'll mess up your cash flow.
Learn More: Read "How to Set Prices" for more information on pricing your wares and services.
Q = Quantifying your goals. Projections come down to pricing and understanding the market, Spann says, and your numbers have to be realistic and believable to attract investors. Review your projections with investors on a regular basis to make sure you're on track.
R = Record-keeping and accounting. Someday, you'll hire a full-time accountant or CFO. But early on, when you don't have employees or many clients, do record-keeping yourself. There are lots of accounting software packages, such as Peachtree and QuickBooks, tailored to small businesses. As you grow, you can outsource your accounting and payroll functions. It's wise to get a CPA's advice when setting up your accounting controls so you do it right the first time.
Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.