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Tuesday, June 28, 2022

What You Need to Do to Start a Business

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When you start a business there is a lot to do. No question about it. But the truth is, you can only do one thing at a time. That being said, your best approach is to create a list and timeline and just do each item one by one.

Assuming you’ve already decided which business to start, here is a checklist you might find very helpful:

1. Business Plan

Before you do anything, create your business plan. In this document, you’ll spell out exactly what you’re planning to do. It will help you think through how much money you’re going to need, who your customer is and how you’re going to get your product or service to your customers (and why she’s going to buy from you as opposed to the business next door). There are software packages that can help you create your own business plan, or you can hire someone to do it for you. If you decide to hire someone, you can find plenty of great candidates on hiring sites such as guru.com.

2. Raise the Money

Almost every business requires money to launch and run. How much will it cost to open up the business that you are interested in? If you don’t have enough working capital and start-up capital, you run a very high risk of crashing and burning. Understand that if this is a new venture for you, there are many surprises that lie ahead. Have plenty of cash set aside to help ride out the uncertainty you’re sure to face ahead.  So make sure you know how much you need to start your business, and then have 30% more than you need.  Never hurts to play it safe.

3. Facilities

Hopefully, you won’t need to rent an expensive warehouse or office. Try to start your business while keeping your expenses as low as possible. And a great way to save is to have low-cost facilities. Never sign a long-term lease if you are starting a new business. You might have a great plan, but you don’t know how sales are actually going to turn out. As a result, it’s impossible for you to safely lease a space long-term. Sublet or work out of your home. If you are launching a professional business, find an office that will allow you to rent month-to-month. You are far better served to sacrifice a little on the quality of the office if that’s what it takes to get into an easy month-to-month situation.

4. Licensing and Insurance

It goes without saying that you have to protect yourself when you start your business. Check with your local city government to make sure you have the proper licenses. While we’re on the subject, check with your accountant. Make sure you are forming the company correctly. For example, most people don’t think about it, but if you can qualify to form a Professional LLC, there are many reasons to do so and it could be an excellent decision. The best way to know how to set up your company is to check with your CPA first.

Business insurance is another crucial issue. The last thing you want to do is start your business without the proper coverage. This is something you should look into at the business planning stage, to be frank. One reader told me that after she spent a ton of money setting up her business, she couldn’t open the doors. Why?  Because the liability insurance for her particular business was way too expensive. Keep in mind that she learned this after she spent a good deal of money. Clearly, she would have been far better off had she determined that the cost of insurance was prohibitive from the get-go.

5. Staff

I believe in hiring staff before you absolutely need to do it…but just barely. You are walking a tightrope here. I say this because if you wait too long to hire people, you’ll be giving up opportunities and sales. But if you hire people and all they do is sit there and warm a chair, it’s a huge waste of time and money. Look for opportunities to hire contractors instead of staff if possible.

6. Marketing

This is another item that your business plan has to clarify. Without marketing, your business won’t bring in sales. Without sales, there won’t be enough revenue, and soon you’ll be back at your old job but minus all the money you spent setting up your company.  Have a marketing plan before you spend money setting up shop.

7. Confirmation

It’s great if you take the prior six steps.  Just remember not to stop there.   You need to confirm your plan is working. How?  Sit down with your accountability partner along the way – including after you’ve opened your doors. Go over how things have gone so far. What’s working? What has surprised you? What challenges are you still facing? What are the unforeseen challenges you didn’t expect?

Starting a business is a wonderful journey. I thoroughly enjoy being self-employed. If you take the time and go through each of these steps methodically, I’m sure you’ll feel the same way.


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