11 Keys to Starting Your Own Business
The prospect of starting your own business can be appealing and even exciting, but oftentimes new business owners or entrepreneurs aren’t sure where or how to start. It can become overwhelming and even paralyzing when trying to wade through the resources and options available. We’ve broken down 11 of the most vital components every business needs to follow to start off in the right direction.
1. Nothing Without Purpose
Every business owner, regardless of the amount of revenue made, the size of the business or how long it’s been in existence, needs to have a purpose behind what they do. There is something that needs to exist in them that will drive them to work hard on the days that running their business is hard or frustrating. Money, although often a good motivator, can only sustain someone for so long if they hate their job or have no purpose behind it. The purpose could be anything meaningful, whether it’s providing for your family, giving back to others, helping the environment, or even just a fun side gig that involves something you enjoy. People with purpose beyond themselves will have a greater chance of meeting their goals because they will put the work in, even on the days it’s hard or unenjoyable.
2. Whatcha Selling?
This may seem like a no-brainer, and it is in a way. But oftentimes it’s easy to get ahead of ourselves and have too many ideas or one that hasn’t been properly fleshed out. It’s important to really hone in on what you plan to provide with your business and what sets your product or service apart. If it’s expertise, a product or service not currently offered or even one that’s already one the market, be sure to understand the ins and outs of the industry, conduct research on your competition and determine what makes your business appealing.
3. Know the Customer
Equally as important as your product or service is knowing and understanding your target customer. You could be offering a great product, but if you don’t understand who you’re marketing to, it will be difficult for the product’s potential to be realized. Knowing your customer isn’t about limiting who you can sell to; rather, it means tailoring it to fit the needs of your target customers to yield the most successful outcome. A new business owner must take everything about their target audience into account, including age, income, marital status, life stage, interests and even what they do for a living. If you can determine what’s important to the ones you are selling to and how they spend their money, you’ll be a step ahead when you launch your business.
When starting a new business, it’s important to outline your goals for your business. It can be easy to get caught up in the view down the road rather than the present, which is why it’s important for both short- and long-term goals to be laid out. According to psychologists across the globe, people who regularly write out their goals are 42% more likely to achieve them. Breaking down daily, weekly, monthly, quarterly, and yearly goals can keep you on track, and as time goes on, they can be adjusted according to the progress being made along the way.
5. Location, Location, Location
Where your business is located may seem only applicable to brick and mortar establishments, but location is very important for any business entity. Where your business is run determines how accessible it is to customers, overhead costs, competition, taxes and other regulatory laws that you may run into. The state you live in may also determine how you intend to incorporate your business (see the entity section for more), so keep this in mind as you research. Even if you are planning on running your business out of your home, looking into all of these aspects in advance is advised, as location may be a deciding factor on the direction your business goes.
6. Time to Incorporate
This may be a confusing aspect for many new business owners, but every business needs to incorporate into an entity. There are a number of options, so you need to decide which applies best and is the right choice for you. Some of the more common options are sole proprietor, LLC, LP, C-Corp and S-Corp, and each provides varying advantages and protection, along with different tax procedures. Deciding on which is right for you depends on the kind of business, whether you have partners, and the state in which you decide to incorporate. The best way to determine the right one for you is to do some research, seek advice, and talk to an accountant. The more information, the better off you are and the easier it will be to start your new business off right.
7. Capital is Key
The common refrain “You have to spend money to make money.” isn’t far off from the truth. Every business needs an initial influx of cash, and the amount needed to start out depends on the kind of business you plan on running. Startup fees can include equipment, website costs, supplies, rental space, employees, credit card processing, accountants, and other costs that most people don’t think of when deciding to start a business. Business loans are relatively common, but before taking out a loan it’s important to lay out a plan, define what costs are fixed or variable, estimate how much money you will be bringing in, and the kind of financing options available to you. There are a multitude of companies, banks, and other investors that offer business loans, so it’s best to find out what options are available for your specific situation before pulling the trigger.
8. Be Online
In this technological era, establishing an online presence is key. It’s important to not only have an easily navigable site that’s attractive to customers, but also informative, stable and easy to find. If you have a site that is constantly crashing or confusing to look, you’ll be hard-pressed to keep customers coming back. If you are selling goods on your site, you’ll want to ensure your shopping cart feature is secure and functional. Virtually all credit card processing companies offer online virtual gateways that are easily integrated into your site, are stable and will provide the security and fraud prevention needed while customers shop.
9. Banking It
An aspect that is vitally important for the health of a new business is the creation of a separate bank account and use of a business credit card. Keeping your business account separate from your personal one not only helps you keep track of your cash flow, costs and expenditures more easily, but also prevents some major tax or legal problems that could potentially arise in the future if personal and professional accounts are combined. Additionally, business credit cards connected with the account can provide many advantages when used, including higher credit limits, earning points and perks, and, if applicable, keeping track of employee expenditures. Nearly any sized business will benefit from both an account and card.
10. Always Accounting
Alongside a business account comes the need for bookkeeping, specifically bookkeeping software. It may not be the most glamorous component needed when starting a new business, but bookkeeping software such as Quickbooks, FreshBooks, Xero or OnPay provide the structure needed when it’s time to file taxes, speak with investors or buyers and pay the bills. The software available is typically cheaper than a good accountant and the headache saved from getting bookkeeping software is worth every penny. As your business grows, the software can grow with you, providing the organization you need with increased business and all that comes with it. Many bookkeeping systems can be integrated with your online virtual gateway or POS systems, so ask your provider about the options and how to add on one of the systems for your business.
11. Get Paid
Finally, every business will need to have the means to receive payment in various forms. Some businesses can get away with receiving checks from clients, but with credit card and online payment at its peak, businesses of any size need to have a way to receive and verify these payments. Being able to process credit card payments is especially relevant in service or retail industries or businesses that plan to sell products online exclusively. There are a number of credit card processing companies to choose from along with processing fees that may or may not work for you and your new business. A more comprehensive outline of how credit card processing works can be found here, but it’s vital to do your research to decide the best options for your business, or else you could be paying an arm and a leg just to get the payment into your account.
No business gets every decision right immediately or starts off completely flawless, especially not without help and time spent learning more about what to do. It can be easy to become intimidated, frustrated or discouraged, but if you can start off on the right foot with your purpose and goals at the forefront, you will have a much greater chance of succeeding in the exciting venture of starting a company of your own.