Your order will depend in part on your chosen industry and personal situation. But no matter what your business, don't think you know how to structure everything without some professional help. Based on his own experience, Feinberg suggests talking to a CPA first. "It's a good place to start, a good resource," he says.
To keep your costs down, do some homework to target your questions to cut the time you spend with professionals who bill by the hour, Feinberg says.
What if the business you're starting is homebased? When Stacey Cohen founded her Mt. Kisco, New York, marketing and PR company, Co-Communications Inc., in late 1997, her plan was to grow her homebased business slowly and strategically for five years. She had very little overhead and wasn't dependent on outside financing. Instead of writing a business plan, the first thing she did was invest $6,000 in a logo, embossed letterhead and business cards.
"In the launch stage, I needed something to speak volumes about my company, and I spent a ton of money on it," says Cohen, 42. "Some people would first look at the bottom line and ask how much revenue I was going to produce, what target markets I was going after. I knew I had to do that, too, but first I had to set the tone, the image of the company."
Obtaining a business license, setting up a bank account as a sole proprietor, registering the Web site www.co-communications.com and starting to network vigorously all followed in quick succession. "I put myself out there with those gorgeous-looking business cards and passed them around," she says. She bartered early on with a graphic designer to create her Web site in exchange for PR services. When clients came calling six months into the business, Cohen felt it was time to outsource a bookkeeper.
"The billing in advertising and marketing is very complicated. There are commissions and markups," she says. "I had to make sure everything was in line."
In 1999, Cohen moved her business into a downtown office space. Sales in 2002 were around $750,000, and she's projecting more than $1 million in sales for 2003.
The best thing you can do in the early stages of your business is to create a timetable for how you'll take care of the basics. "Things are always thrown in our path to take us off our timeline," Cohen says. "But if you can stick to it as closely as you can, you're guaranteed success. And success breeds success."
Do's & Don'ts
Cover your bases and get these decisions right the first time:
- DO consult with an accountant and an attorney before your business opens to choose your business structure and take care of any necessary papers.
- DO get your state licenses and ID numbers before taking care of mechanics such as setting up your business bank account and seeking insurance coverage.
- DO protect your company from product liability before you start selling. This is particularly important in the technology field.
- DON'T sign a lease before you've secured financing and done your due diligence on a location's demographics and foot traffic.
- DON'T assume banks will finance debt you've run up on your personal credit cards in starting your business. Banks aren't keen on financing credit card debt.
- DON'T staff up with expensive employees, such as a full-time human resources, marketing or accounting person, before you can afford them. Outsource this expertise.