What’s Your Passion? If you are thinking about starting a business, it should be something you enjoy. Since a lot of time and energy goes into running a business, it is smart to look at your hobby or professional experience as a potential business idea. For example, if you are good at sewing, consider a tailoring shop; or an accountant could look at bookkeeping or tax service. Now, imagine what your life would be like if you spent the majority of your day actually doing what you love. Do you have what it takes to be an entrepreneur? To improve your chances, here are 10 Extremely Important Tips for a Successful Business Launch.
Tip 1: The Name Game
Now that you’ve narrowed it down to ONE ‘business idea,’ you’ve got to figure out a name. A major challenge in starting a business is the process of searching and choosing the right business name. Choosing the right business name can mean success while a poorly thought out name could doom your business from the start. Three smart business name tips:
- A smart business name must be unforgettable. It is imperative that potential clients be able to remember your business name. I’m sure most people have heard of Nike, Walmart, Target, Home Depot and McDonalds. Like these household names, your name should be easy to pronounce and memorable.
- A smart business name must describe what your business does. When you create your business name, potential clients should be able to understand what products or services your company offers. For example in ‘ Browder Consulting Group,’ the word “Consulting’ is a clue that I provide specialized advice; or as in Lynn’s Styles & Cuts,’ the words ‘Styles & Cuts is a clue that this is a beauty salon.
- A smart business name should be as short and sweet as possible. As you advertise your business, it is important that your name display well on your marketing material, such as business cards, ad campaigns, domain name and email. As potential clients search for you on the internet, you want it to be an easy spelled and searchable name.
Tip 2: On a Mission
A mission statement is an important tool that tells others who you are, what you do, how you do it and why you are superior than your competition.
- It identifies and clarifies the business’ vision, purpose and direction.
- It provides the path and focus needed for making and implementing decisions.
- It helps define to your future employees what they are doing, why they are doing it and where they are going.
Tip 3: Make it Legal
Be diligent in choosing the best Legal Form for your business. This is one of the first important decisions that you will have to make. This decision can have long-term implications, so here are a few things to consider when deciding which business structure is best for your business:
- Scope of business you plan to attain
- Size of your business
- Business’s vulnerability to lawsuits
- Tax implications based on the different ownership structures
- Level of control do you wish to have
- Expected profit/loss of the business
Tip 4: Surround yourself with a Progressive Team
Who do you need to know or collaborate with as a part of your external team? Having the right people on your team will allow you to focus on your business and help you to avoid costly mistakes. For example, you might need the following:
- Certified Public Accountant: best form of ownership, establish bookkeeping, record keeping procedures and tax planning, etc.
- Business Attorney: reviewing lease contracts, determining the right business structure, etc.
- Computer Information Technician: set up systems, repair issues, etc.
- Human Resource Management Consultant: assess your current HR processes for compliance, navigate through delicate labor issues, set up hiring processes, compensation and benefits and create employee manuals, job description and Standard Operation Procedural manuals.
Tip 5: Research Licenses & Permits Needed for Your Industry
As you can see, there are many steps involved in starting a business. With the daunting task of figuring it all out, it’s easy to overlook the important legal requirements associated with permits, licenses and registrations. Here’s a list that your business might need:
- State Requirements: Business licensing requirements may vary from state to state.
- Business Licenses: Depending on your state, county and city, a business license may be required for tax purposes and to conduct other basic business functions.
- Occupations and Professions: Depending on your profession, state licenses may be required for occupations such as, appraisers, accountants, barbers, building contractors, cosmetologists, funeral directors, physicians, private investigators, private security guards and real estate agents.
- Tax Registration: Some states carry a state income tax. If you establish your business in a state that does, you’ll have to register and obtain an employer identification number. If your business engages in retail sales, you will need to obtain a sales tax license.
- Trade Name Registration: If you plan to run your business in your local community only, registering with the state may be adequate.
- Employer Registrations: Are you planning to hire employees? If so, you’ll probably be required to make unemployment insurance contributions.
Tip 6: Know Your Clients
A common mistake that I encounter with new business owners is that they don’t know who their customer is… possessing a poorly defined target market. Most want to sell their products or services to ‘everybody’ instead of narrowing their targeted customer base to a manageable size. You must do your homework… i.e., market research. I’ve created a business resource guide to assist you, Resource Guide for Women.
Tip 7: Got Marketing?
In business, marketing plays a key role in getting the word out to your prospective clients. You must create an image and be consistent! It’s important to mold and hone your business image to successfully appeal to your prospects and customers. By choosing a relevant company name, answering your phone professionally, creating a professional and clear elevator pitch, investing in professional business cards, logos and brochures, etc… all are key in marketing your business.
Tip 8: Don’t forget Uncle Sam
Understanding tax obligations is one of the most important issues facing small businesses. The local, county, state and federal agencies does not care that you didn’t know or you forgot to pay your taxes. You will be subject to penalties for not paying on time. Here are some resources to assist you:
- For a list of state agencies: business.gov/states/
- For a SBA resource guide by state: smallbusiness3.com/magazine
- For IRS business information: irs.gov/businesses/index.html
Tip 9: Don’t forget the ‘B’ Word… Budget!
Create a start up budget. Because businesses are different, each will have its own specific cash needs at various stages of development, so estimating your start-up costs may vary. Some businesses can be started on a shoestring budget, while others may require considerable investment in inventory or equipment. It is imperative to know that you will have enough money to launch your business venture.
A few ways to prepare:
- Create a list of anticipated expenses for your first three years
- Projections are fine, be realistic
Have a tracking system
QuickBooks, Quicken, Ledger, Excel spreadsheets, I don’t care which you use…. It’s important to put a system in place that works for you. Personally, I use QuickBooks. I can send files to my CPA, easy to work with. In addition, as the treasurer on the board of a non-profit organization, I also use Quick books to reconcile the organization’s bank statements and to bill our member’s annual dues.
Open a business checking account. The worst thing you can do is run your business from your personal account… it is an accountants nightmare. Open up a business account so that you can separate the two… plus it tells others that you are serious and professional.
Tip 10: Put it all together… in a plan!
Last but not least, you must write your business plan. By failing to plan, you are planning to fail. If you can’t take the time needed to plan for the success of your business, then don’t waste your time starting one. Statistics show that 8 out of 10 businesses fail within the first three years. This is staggering but true! Invest your time in researching and writing a business plan. Many prospective entrepreneurs think that a business plan is very hard and tedious. The truth is it’s a powerful tool that can help you plan and achieve business success.
So, what is this thing called a business plan? Well, a business plan is your blue print or what I tell many of my clients, it’s your bible! A business plan defines your business, identifies your goals, and serves as your company’s resume. It will help you arrange strategic alliances, obtain financing and attract key personnel. By planning for success, you will be able to overcome many hurdles that may arise.
A closer look at why a business plan is important:
- To secure funding, your lender will request your business plan with completed financials. DO NOT approach a lender without having a completed business plan. In his/her eyes, you will look unprepared and too risky. By being prepared, you will have a better chance at securing funding for operations or expansion of your business.
- It is a great way to test the feasibility of your business idea. By the time you complete your market or competitive analysis, you will have a clear picture of the viability of your idea.
As you can see, there is a lot of work involved before starting a business. To ensure success, it is important to research thoroughly, take advantage of the resources available to you and learn as much as you can. Preparation is key to a successful start!
Sylvia Browder is Founder of National Association Women on the Rise, a virtual membership community for aspiring and established women entrepreneurs. For more about NAWR or resources and information for women entrepreneurs, visit us at http://www.nawomenrise.com.