5 things every new and existing business owner should know.
Everyday individual's contemplate starting a business. Generally someone will have an idea of what service(s) and/or product(s) they would like to offer to consumers, but often lack the proper structuring within the business necessary for its healthy operation. Below are 5 must-dos that will ensure your business ideas become a successful reality.
Tip 1 - PUT IT DOWN ON PAPER
The first and most obvious step is drafting a business plan. A well executed business plan should not only address the idea and purpose of the business, but also detail the operational, financial, and legal structuring of the business. If your business has multiple members that wish to help manage the business, then it is important to define the roles of each party. If you wish to have investors in your business, then it is important to establish a scope of these investor's involvement; for example, you may wish for some to be able to vote in matters concerning the operations of the business. At minimum, every business plan should outline its strategy for producing revenue. This strategy may include marketing techniques, identifying potential clients within the market, or creating processes from which referral sources might be created.
Tip 2 - PROTECT YOURSELF
After drafting a business plan, it is important to analyze the plan and determine which legal entity would best suit the needs of the company. Many times individuals will operate under a sole proprietorship or partnership and not realize that they may actually be exposing their own personal assets to the liabilities of the company. In order to ensure personal protection from the liabilities of the business, often times individuals will choose to form a limited liability company or corporation. The type of entity one may choose to create this insulation from personal liability will largely depend on how the business is owned and operated.
Tip 3 - MAKE IT LEGAL
Once a legal structure is selected. The next step is to file the required documents with the Secretary of State and other necessary authorities. These filings will ensure that the business is recognized as the proper legal entity and begin to afford the business the protections associated with the entity type. After recognition from the State the business must obtain a tax-id number. If the business has employees, additional tax filings will be necessary concerning their employment. Depending on how the accounting is set up within the company, payroll withholdings and taxes incident to having employees may need to be expected.
Tip 4 - PROVIDE VALUE THROUGH STRUCTURE
After the company/corporation is in place, refer back to the business plan and start delegating roles and responsibilities to individuals within the business. One major reason that businesses struggle in early stages is due to a lack of clarity regarding the duties of employees. The benefit of having clearly defined roles for employees is two-fold. Employees will be more productive by following a designed process whereby avoiding wasting company time and resources by using the "learn as you go" method. Likewise, employers will benefit by having specific criteria for which to evaluate the productivity of employees within these processes and will be more easily able to correct any troubled areas.
Tip 5 - BECOME SELF-SUSTAINING
The goal of any business owner should be to create a self-sustaining business model. One part of becoming a self-sustaining business is to have consistent and dependable sources of revenue. A business owner must wear multiple hats, they must work both "in" the business as discussed in previous sections and also "on" the business. Working "on" the business involves the crucial process of creating a brand that consumers both recognize and trust. Depending on the profession or industry of the business, working on the business may require constant interaction with professionals and consumers. Part of building a brand is establishing platforms for the business to explain and educate others on what services and/or products it provides. These platforms may include traditional forms of media, i.e., television, radio, etc., or modern social media outlets, i.e., facebook, youtube, etc. In some cases, these marketing expenses are not in the budget of the business, in which case there are typically social groups or associations owners may join. In any event, a constant presence with clients and potential clients is a good rule of thumb for marketing the business.