Developing a brand new business is an exciting and rewarding endeavor, but it also can feel challenging and time consuming. Following these simple steps will not only keep you organized, but will also help you achieve success with your startup:
Select a strong business idea: Many entrepreneurs jump into a business without completely considering its potential, as well as thinking about the numerous pros and cons. To avoid this costly mistake, it is important to ensure you are choosing a strong business idea. The best way to do this is to consider the following questions:
-Will this new business leverage your strengths and interests?
-What problem does your business idea solve?
-Are other companies already solving this problem?
Choose a business name: Your business name must be available for registration as a business name in your state or local government. Consequently, you must check whether the name you want is available as a business name. It is important to keep in mind that a company’s business name is a very powerful branding asset. As a result, it is a smart idea to protect it so that other companies cannot use it. To do this, formally register your business with the secretary of state as an LLC or a corporation.
Decide on a type of business structure: The business structure you pick will dictate the legal and tax requirements your business needs to satisfy. It’s a good idea to consult with an attorney to determine the appropriate legal structure for your new business. And because each structure has different tax requirements, you may want to consult a tax professional before filing your business entity. Most small business owners choose one of the following structures:
–Sole proprietorship: This is the simplest form of business structure, but it provides a lack of limited liability.
–Partnership: If you intend to develop a business with a partner, your liability is unlimited, like a sole proprietorship.
–Limited liability company (LLC): An LLC provides limited liability without the complexity of incorporation, which makes it one of the most popular small business structures.
–Corporation: Similar to an LLC, a corporation provides limited liability; however, it can be more complicated to setup and maintain.
Develop a business plan: Every new business needs a written business plan. This roadmap—which provides direction and attracts investors and potential business partners—is vital to an organization’s success. Even if you don’t plan on obtaining funding for your new business, it is important to create a business plan to help you strategize for future growth and profitability. An effective plan will help you to clarify your objectives and develop a marketing roadmap, which can help you achieve success.
The Small Business Administration recommends that every business plan include the following:
–Executive summary – a snapshot of your business
–Company description – describes what you do
–Market analysis – market research on your industry and competitors
–Organization and management – your business and management structure
–Service or product – the products or services you offer
–Marketing and sales – how you will market your business and your sales strategy
–Funding request – how much money you will need for the next three to five years
–Financial projections – financial plan and information, such as balance sheets
–Appendix- an optional section that includes credit histories, licenses, résumés and permits
Apply for a business credit card: Business credit cards offer benefits and rewards programs that are more helpful to business owners than the features or rewards on a personal credit card. In addition, a business credit card will allow you to keep track of every business transaction via the year-end summary. And business credit cards help protect you from identity theft since the card does not link to any personal information.
Use an EIN: An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique number assigned to a business so that the IRS can identify the business, and the business can report its taxes. Whereas a Social Security number identifies individuals, the EIN identifies businesses with a 9-digit number. And this EIN can protect your identity because it uses an identification number instead of your Social Security number.
Open a business bank account: Most business accounts include a checking account, savings account, credit cards and a merchant services account. Business accounts are very helpful because they provide personal liability protection by keeping personal and business funds separate. In addition, they allow customers to pay by check or credit card—instead of paying you. A line of credit is also part of your business account, which can help prepare you for a business emergency. And credit card accounts not only enable you to make large business purchases, but allow you to keep track of all business activity.
Understand the numerous legal obligations: You must file the appropriate business formation paperwork to ensure your new business has a solid legal foundation. This includes:
–Registering your business with the appropriate government authorities
–Obtaining the required permits and business licenses
–Meeting all federal and state tax requirements, such as applying for state and federal tax ID numbers
Grasp the importance of marketing your business:
To attract consumers in a crowded marketplace, it is vital for your target audience to understand why they should choose your business. The purpose of marketing is to educate current and potential customers about your business and how it serves a need they might have.
-Marketing your business does not need to break the bank. In fact, it’s easy to promote your company and spread the word without spending tons of money. Below are several strategies to successfully promote your business and develop a marketing plan:
-Email Marketing: Email is a very effective strategy when it comes to nurturing relationships, developing a loyal following and sharing information with customers. Email is valuable because it is used by more than half of the world’s population; it’s cheap and cost effective; emails are read everywhere; and you can tell who is opening your messages.
-Company-branded email address: A company’s web address can be used as an email address. A company-branded email address gives your business a professional channel for communication with customers, as well as free marketing for your company.
-Referrals: Don’t be shy about asking happy customers for referrals. These allow you to get your foot in the door with new customers. During or after every job or sale, ask your satisfied customers if they know anyone else who would be interested in your products or services. Most satisfied customers are more than willing to provide a referral for a service or product. Not asking for one is a missed opportunity.
-Blog posts: Blogs not only provide free advertising, but these articles can position you as a knowledgeable leader in your field. This not only builds a customer base, but also spreads the word about your business.
-The key is to make your blog relevant and informative—and always provide answers to the questions that readers are asking. Post engaging and readable content, and be sure to add in trustworthy links and credible sources.
-Customer feedback: Gather feedback from customers via interviews, surveys, phone calls and emails—and act on it. This feedback can improve your services/products and show your customers that you are committed to a strong customer experience.
-Develop a website: A website is one of the best tools to grow your business because it provides numerous marketing opportunities and credibility. It is a crucial tool on strategizing an effective seo plan. Today, easy do-it-yourself tools enable business owners to create their own websites or ecommerce platform.
-Social media channels: Promote your business through Twitter, Facebook, Instagram and YouTube. Consistently post videos and photos—and try to be creative and unique. This creates a strong connection with customers, which translates into happy customers and brand ambassadors. For example, if you are trying to market your tamale and burrito catering business, consider posting photos every time you cater an event. Be sure to include pictures of happy customers and great-looking food. Nobody likes to feel as if they are missing out.
-Free giveaways: Offer coupons to attract new customers and entice returning customers. Give away free samples, so customers are able to try out your services/products before actually purchasing. Consider donating to school or community auctions as a way to “hook” customers. Not only are you helping other organizations, but you are attracting prospective customers at the same time.
-Penetrate your existing market: It’s easier and more cost-effective to get people who are already buying from you to buy more—instead of seeking out new customers and persuading them to buy from you. So focus on getting your customers to come back.
Using these inexpensive marketing tools will allow you to build relationships and connect with customers—a necessity for any small business on a limited budget. While you may not experience growth immediately, you will see progress eventually. The ultimate goal is to successfully transform your business into everything you want it to be.
Build a strong team
Developing your team is another important step in the business-building process. To help you find the best people, keep this advice in mind:
–Consider every skill needed to launch a successful business
–Think about the costs of hiring talent, as well as the time involved in finding and onboarding each employee
–Begin by hiring from the top—and expand your team as your resources allow
–Always keep your company culture and values in mind when filling every position
Additionally, some roles can be outsourced to contractors. Several common roles that experts suggest outsourcing include accountants and financial advisors; administrative workers; attorneys and legal advisors; content writers and digital marketing freelancers; human resources and payroll specialists; and web developers, designers, and programmers.
Consider business insurance
Business insurance helps protect your business and personal assets from anything that could wrong. To help you decide which insurance to get, you must fully understand the risks of the industry that you are in. In addition, It is vital to reassess your insurance as your business grows because you will probably need to update your policies as your expand. Common types of business insurance include:
–Liability insurance: Covers your business from any legal actions due to accidents, injuries, or negligence.
–Commercial property insurance: Helps your business if any property is damaged or destroyed due to fire, storm, or theft.
–Commercial auto insurance: Covers any damage caused to/by any vehicles you use for your business. It pays for medical expenses, legal bills, and property damages if one of your vehicles causes an accident.
–Workers’ compensation insurance: Pays for the medical care and lost wages of any employees who are injured on the job.
–Professional liability insurance: Protects from liability for negligence or malpractice. It is also known as errors and omissions insurance.
–Product liability insurance: Protects manufacturers, wholesalers, distributors, and retailers from liability if a product they make or sell turns out to be unsafe and injures someone.
–Business interruption insurance: Covers your operating costs if the business has to shut down or move.
–Cyber liability insurance: Provides liability coverage to businesses that experience a data breach.
–Umbrella insurance: Offers extra coverage to help pay for anything that may have exceeded your policy limits on other types of insurance.
There is no question that growing a business takes a tremendous amount of time, energy, and perseverance. But the rewards can be great. In the words of Dave Thomas, the founder of Wendy’s: “What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.”
Still have questions? Our Business Formation Experts are ready to assist you and provide you with peace of mind that your business needs are in the right hands .
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