Before diving into a new business venture head-first, entrepreneurs must carefully consider all aspects of business ownership, from startup costs all the way down to the motivation behind running a business. Owning a business may seem like an appealing option when faced with unemployment or dissatisfaction at work, and those can be great motivators, but starting a business as a last resort or purely out of desperation is rarely a good plan. Launching a new business takes a ton of commitment and, over time, a lot of money. A bad business venture may not only be unsuccessful, but could be completely devastating for your credit and your savings. The best businesses are formed when motivation and drive meet demand. For a business to be successful, several elements should be firmly in place.
Getting funding for your small business can be a big hurdle when trying to cover startup costs. The Small Business Administration (SBA) is a government agency dedicated to helping small business owners succeed, and is the best first stop for entrepreneurs ready to get their business off the ground. You'll find resources for funding, writing your business plan, and even managing your business.
Should I become incorporated or operate as an LLC?
Deciding how to structure your company should not be taken lightly. While most people immediately jump on the LLC bandwagon, the right choice for you will really depend on your business, assets, goals, and personal preference. Your best bet is to talk to your attorney or financial adviser to find out which structure will be best for your new company.
Can we exchange business services?
Holding onto cash is always a plus for new businesses. A great way to save money is to offer exchanges of services from other business that could provide goods and services you need. For example, if you're launching a bed and breakfast but you need a Web site, offer a young Web designer a free weekend of relaxation in exchange for free Web design services. It's a win-win exchange that keeps money in your account.
How can I market my new business on social media?
Social media marketing can help you reach out to potential customers, and if you know what you're doing, you can get started for free. However, effective social marketing means more than just launching a Facebook page. You should definitely have a presence on social media, but you should learn about the basics of social marketing before attempting to do it yourself. The key thing to remember is that in addition to posting information about your business, you also want to engage people and attempt to build your online brand.
Who are my competitors?
Market research is essential when starting a new business, and a key piece of market research is knowing your competition. Who provides the service that most closely resembles your service? Is that business more or less accessible to your customers? Should you improve what you're doing to provide a superior service? Do you have reason to believe your customers will go elsewhere? Learning about your competition will help you answer these important questions which could shape the growth of your business.
Will you endorse me on YELP and other Web sites?
People put lots of faith in Web sites like YELP to help them separate the good businesses from the bad, and the last thing you want is for a single disgruntled customer to end up driving away more potential customers. When starting a business, get some friends and family members who will be ready to endorse you on these Web sites as you get your business off the ground. These endorsements could result in more customers through the door.
Can my business survive without profit for a year?
On average, a startup company will not become profitable for a year, at minimum. In fact, many entrepreneurs don't even draw a salary for the first year of business, sometimes more.
Can my business share office space?
Recently launched businesses with few employees can save money on overhead by sharing office space with more established businesses. It's easy to find offers for shared office space online. This is a great way to build a professional environment, and workers are often more productive when working in an actual workplace as opposed to being at home.
What are the tax laws in my jurisdiction?
Don't even think about starting a business until you've talked to a financial professional about the tax laws where you live. In addition to federal taxes, each state has its own tax laws dictating how much businesses need to pay. These tax laws need to be factored into all revenues and expenses from the very beginning, or else you could get in trouble with the IRS later.