There are many steps to complete before starting your own business, including careful consideration of your customers' needs and how to effectively market.
If you are an entrepreneur looking to launch your own business, 2019 is likely to be an exciting year. Knowing how to plan for your launch is an important part of the process.
In this entrepreneur’s startup success guide for 2019, we take a look at how to prepare yourself, your business structure, your product or service, and your employees. Here is a deep dive into the many steps on your path to entrepreneurial success.
If you are about to embark on an entrepreneurial career, it is important to understand what it means to be working for yourself. There are many changes that are likely to come to you, your family, and your day-to-day time spent thinking about and acting on behalf of your business.
Here are a few key points to remember about your personal well-being when starting a business:
- What are your greatest skills and passions?
- Where is your expertise?
- What kind of a lifestyle do you expect for you and your family?
- Are you ready to do what it takes to find and hire great employees and fire bad ones quickly?
- How much work are you expecting to do at your new business? Are you efficient in how you use your time?
- Are you ready to be responsible for making all the big decisions, shouldering the responsibility, and operating independently?
- Can you make the sacrifices it will take to work hard as you are starting your business?
- Can you handle rejection from customers, vendors, wholesalers, and potential investors?
- What will you do to maintain stamina while working hard?
All of these questions point to setting and managing realistic expectations about your business.
Forming the Business
There are some important structural decisions you need to make about starting your business. First, you need to protect yourself and your assets by establishing the business as a legal entity, whether as a limited liability company, an S corporation, or the most common choice, a C corporation. Each legal structure has important legal and tax consequences and you should research your options closely.
Once the business structure is filed, you need to use the formal name in all legal documents and abide by other guidelines, including:
- Issuing stock properly
- Forming a board of directors, holding meetings, and taking minutes
- Keeping your funds separate from corporate monies
- Keeping tax payments and records separate
- Completing all corporate transactions separately from those of directors and employees, especially for yourself
A federal tax ID is an important consideration. You need an Employer Identification Number (EIN) from the IRS to open a bank account and to pay employees. Certain states – California, New York, and Texas – also require a state tax ID.
You also need a great name. The right name should say who you are and what you do. Business names should follow these guidelines:
- Make it easy to spell and pronounce.
- Be sure it isn’t already in use by doing a trademark search.
- Find a domain for your company, ideally with a .com suffix.
- Don’t choose a name that will be limiting as your company grows.
You might want to come up with 3-5 possible names and do some test marketing with potential customers, family, friends, and advisors.
Your business likely will need to secure permits, licenses, or registrations to operate legally. There are many different types of documents you may need, including:
- Sales tax permits or licenses
- Zoning permits, including those allowing for a home-based business
- Business permits (at the city, county, or state level)
- Permits for regulated businesses, such as those that sell alcohol
- Health Department permits for businesses like restaurants
Considering Your Product or Service
Understanding what you’re selling is critical. No matter what you’re thinking about, it’s important to ask the following:
How do we bring customers something unique?
The product/service needs to be something that customers want and need. Your unique selling position needs to deliver high margins and separate your version from all the others out there.
Instead of offering a multitude of products or services, instead, consider focusing on one thing and doing it exceedingly well. Offering high-quality products and services with exceptional customer service goes a long way toward building goodwill and customer loyalty.
How do we deliver our product/service economically?
Profit margins are driven greatly by how much it costs to produce, market, and deliver on the product/service. The focus, however, should not be on your side of the profit margin, but by thinking about the consumer experience.
You want to make sure you are delivering quality and value to your customers. Make sure that your employees are consistent with how they deal with customers, the service they provide, and the non-price value you can offer to customers. Sure, you can reduce prices, but offering guarantees, warranties, exceptional customer service, and other nonfinancial perks are another way to improve the value proposition.
How can we deliver this product/service to the marketplace conveniently?
This may seem like an unusual question to ask, but it really goes to the heart of being customer-centric in your approach. Customers are looking for convenience in the way they use and experience products and services. Think about the success of Uber, which has dramatically disrupted the way people think about transportation.
How did Uber succeed? By looking at the pain points that customers were experiencing (long, uncertain waits; lack of predictability; inconvenient payment processes) when traveling. Uber learned about those pain points and created a service that directly addressed those points.
Look at your business model and develop the services and products that will add convenience, simplicity, and value to the customer experience.
Getting the Support You Need
While it may feel at first as though you need to be all things to all people, the reality is you cannot do it all. You will need a team of trusted business advisors to help with legal, accounting, and financial issues.
Consultants and freelancers are a great option to get insights, talent, and results without paying for full-time staff.
Insurance is another important consideration that often requires outside help. You want to protect your business and yourself with the right general, product, and professional liability. You may also need other insurance products, such as:
- Business interruption insurance
- Commercial auto insurance
- Cybersecurity insurance
- Directors and officers insurance
- Employee health insurance
- Property insurance
- Worker’s compensation insurance
You should also consider outsourcing services such as payroll management, payment card processing, and retirement fund management to companies with experience helping small businesses with these tasks.
Protecting Your Property
If you have a great idea, process, product or service, you want to be sure it is legally protected to keep it out of the hands of those who could steal it and profit from it. There are many intellectual property protections to consider, including:
- Patents which prevent others from using your idea, formula, product, as long as it is new or novel
- Copyrights that protect works of authorship, including books, art, software, music, and movies
- Trademarks to protect symbols, logos, words, names, and other visual items that distinguish your company
- Service marks which act like trademarks on services
- Confidentiality agreements that employees sign to prohibit them from disclosing product or business ideas, processes, and trade secrets under severe financial penalty
- Terms of service and privacy policies that limit what online users can do on your website and information contained there
Pitching Your Business
Marketing is an important part of any business. To market effectively, you need to understand the different options available, including digital marketing, print, TV, radio, billboards, and influencers. Understanding who you’re trying to reach helps inform which media to use for your marketing work.
Your marketing will be an ongoing part of your business management. One place to start is thinking about your website, which is important obviously if you’re an online business but is just as critical if you’re a brick-and-mortar company.
How can you think about what to include on your website? Consider the following:
- How competitor sites are structured
- Five or six sites to show your designer what you like
- The user experience, meaning how visitors will navigate your site and where you want them to end up
- Search engine optimization, fresh content, reviews, and design that works great on mobile devices
- Visually compelling, clean, and clutter-free content
There are two other parts of the pitch to consider. The first is the elevator pitch. This is a brief (60 seconds or less) distillation of your business, why it is unique, what it offers, and what problems it solves. The pitch takes practice to get right and can be modified based on the audience.
The slide deck is another key tool. This deck of 15-20 slides is often used to show investors key elements of your business plan. Its intent is to persuade investors and others of how the investment opportunity is ideal.
Financing the Business
You have many options when it comes to small business financing. At Benetrends, we offer an innovative alternative to commercial loans and using personal savings.
With Benetrends, you can use your own 401(k)/IRA retirement funds to start or expand a business, all without incurring the expensive interest on standard loans or giving up equity stakes to venture capital investors.
Benetrends also helps with providing core business support services, including payroll management, retirement plan management, and credit card processing.
To learn more about how Benetrends helps entrepreneurs like you, read a few of our Benetrends funding success stories.