Starting a business is a fantastic experience, one that’s filled with opportunity and excitement. To be successful, there are a few significant things you need to focus on – including making some core decisions that could make a big difference in the way you manage your business.
Doing this now, at the start of your business, enables you to create a clear path forward, and it may help you save money, reduce liabilities, and even enhance the success you have early on. They allow you to put in place a few valuable structures to help you carve out success with your business. It doesn’t have to be a challenge or take a lot of time.
Where do you get started? With such a wide range of things running through your mind as you start up, focus first on these six tips.
#1: Plan ahead with the right business structure
The legal structure of your business ultimately defines how it operates, its ownership, liability, and taxes. That’s why it’s critical to establish a business now that’s on a solid foundation.
If you start up with few assets and risks, operating as a sole proprietorship could be a solid option. There’s nothing to formally do to establish this, but it also provides you with a basic level of business formation.
For many companies, it is best to start a limited liability company (LLC), as this legally recognized business structure helps to shield you from personal liability. For example, if your business is sued for any reason, having an LLC in place ensures those making claims against your business cannot go after your home. In an LLC, you can pay taxes as you would a sole proprietorship, reducing the risk of double taxation and helping you to potentially qualify for tax credits.
As your business grows, it may become necessary to become a corporation, either an S Corp or a C Corp. This move is often beneficial when the company is larger, carries more risk, and plans to have shareholders.
#2: Build a business plan
One of the most common reasons businesses fail is their lack of an organized, clear focus. Sitting down and thinking how to create a business plan alleviates that problem. It provides you with a way to clearly define what your business is, how it operates, and what it offers. It can provide plenty of additional tools to you.
Your business plan should:
- Offer a clear description of the business, including what it offers, including outlining your products and services
- Provide a structure of the ownership and management of the business – who does what, and why are they skilled to hold that position?
- Outline the product and service pricing as well as the profit margins on these items
- Determine what the competition is and clearly outline what your business’s advantage or competitive edge is over them
- Clearly describe your business’s target customer and market, including a good understanding of what your business’s ideal customer looks like and their pain points
You will find a business plan is a necessary investment for a number of benefits. That includes applying for loans, working to establish your business’s physical location, and helping you to build your business’s online presence. A business plan operates like a roadmap to help you know where you are and where you are going.
#3: Launch your online presence
While opening a physical location is necessary for many businesses, an online presence is a bigger and more impactful investment than many small business owners realize. Today, most people go online to determine whether they will work with a business long before they actually visit a location.
Many times, your online presence will define the success of your business early on for several reasons.
- It helps you create a brand for your business. Everything from the way your social media pages look to the functionality of your website can help your business to build a brand.
- This is one of the best low-cost ways to start marketing your business. Good content and social media posts can help you draw customers into your business.
- Your online presence helps people find you, no matter if they are using their smartphone to find your physical location or want to place an order, or schedule a meeting with you right away.
You can use your online presence to make a statement, talk about your products and services, and connect with your potential customers. This is also one of the easiest ways for you to build your business’s engagement with customers. How else can you talk to your would-be customers and share what you have to offer them?
#4: Set up the professional help you need
There are a few pros you will want to include in your business from the start. Depending on the industry and what you have to offer, you may want to expand this to include others. The key here is to have a team available to answer your questions and support your business as you grow.
A good starting point is an accountant. Early on, you’ll need to start keeping track of financials, including revenue, taxes, and reporting requirements. You also will need to get some help with taxes and legal processes once you start to hire employees. An accountant can help you to get bookkeeping as well as tax strategy in place.
You may also benefit from an attorney. Having an attorney to call on to help you with contracts, as well as any business challenges that occur over time, is a must. You can also get help with permits and business licenses if you’re having trouble doing this on your own. Legal guidance could help you create a strong business model going forward that reduces challenges and increases opportunities.
#5: Create a budget
Your next task is to build a business budget. Often, this is a challenge for business owners because they have no idea where what they need to spend money on and what their budget may look like in the coming months. Start with the basics and work up from there – and know your accountant can help you with this process, too.
Define what your expenses are as a starting point. This should include inventory purchases, paying employees, the need to cover costs for marketing, rent, and so on. Be as detailed as possible using the most accurate information available from your recent purchases.
Then, do the same with your revenue. What amount is coming in? What do you need to come in to meet your financial obligations? It is often necessary, especially at first, to have a clear understanding of where your cash flow is at all times, ensuring you don’t find yourself in a place without the funds you need. Many small businesses need to borrow capital to get started.
When making decisions about how to spend money and grow your business or market, your budget can work as a guideline for you, creating a tool for you to know where you stand at any given point.
#6: Work to build your brand
Your online presence can be the foundation of your brand and promoting it, but you also need to have a brand game plan, one that outlines every detail of your business. This should outline who your business is and what your mission statement is. It should also provide insight into what makes your business different.
Build your brand image through logos, color schemes, and the types of language that you wish to use. Having a catchy slogan can help, but make sure there’s a visual component to your brand that people can remember. You’ll want to develop a brand that’s unique enough to stand out from others but clearly defines what your business has to offer nonetheless.
Then, incorporate the same brand and messaging across all platforms. This should include your print materials – from flyers to shopping bags – to your online social media and website platforms, and even the emails you send out. Keep everything consistent so as to help customers remember your brand.
From there, put your business to work. Create a newsletter that allows you to bring people back to your website and email messaging that helps give new customers an idea about what you have to offer. Build your brand through engagement opportunities on social media, create an interactive website that lets people get to know your company, and even build some videos to help showcase who your company is.
Building a Strong Foundation for Your Business
Each of these steps can help you to create a strong base from which you can build your business. Without a doubt, the process will take time and hard work. You’ll need a good idea and a reliable product, too.
The more work you put into the process now, the clearer this path can be for you. Take a few minutes to create a plan and a list of the steps you still need to accomplish. Then, go to work with confidence.