Starting a Business: What to Know
Starting a Business: What to Know
You have a great business idea and lots of enthusiasm, but like most new entrepreneurs, you may not really know what's involved in starting a business, or even where to begin. Learn the basics about what you need to get going, including business plans, branding and trademarks, financing, and where to go for help.
Your Business Plan
A business plan is a roadmap for your business goals and how you intend to reach them. It's a great tool for finding out if you have a viable business idea and it can help you identify obstacles and determine how you'll overcome them.
A business plan should answer these sorts of questions:
- What will your business do?
- What is the demand for your product or service?
- Who are your customers, and what will you do to attract them?
- Who are your competitors, and how will you be better or different?
- How much will it cost to start and run your business?
Establishing a Unique Identity
As you develop your business plan, think about how you will brand your business, or establish a unique identity, that you can market to customers.
Your business name is a key component of your brand, but choosing a good one can be trickier than you'd think. You must consider the marketing angle—but there are also legal concerns. A comprehensive name search can help you eliminate names that present legal issues BEFORE you spend money on marketing materials.
Other ways to establish your identity include getting a website address, and developing a short “elevator pitch" that you can use to quickly explain your business concept to anyone that you might do business with.
Finding the Money
Your business plan will help you determine how much money you need to get off the ground and to sustain the business until it makes a profit—but you can't get started without access to cash. Some possible sources of funding for a new small business are:
- Your own savings or a home equity loan
- Friends or family. This might be a gift, a loan, or an investment in exchange for a share of your business
- Small business loans through a bank or credit union
- Microloans through a special microlending program
- A crowdfunding campaign using a service like Kickstarter
- Future employees or outside professionals who might work for free in exchange for shares of the company
- Venture capital or angel investors. This gets a lot of press, but is not realistic for most small businesses
Your business plan and elevator pitch can help convince family members or lenders that you have a strong concept and a viable business idea that is positioned for success. There are risks and rewards for each type of financing, so it's wise to get legal and tax advice before signing any financial paperwork or agreeing to give others a share in your business.
Starting a business raises legal, financial, marketing, and intellectual property issues. You shouldn't expect to be able to figure out everything on your own. Here's who can help:
- A business lawyer can advise you about choosing a business entity type and a name, registering a trademark, and various legal issues relating to shared ownership of a business.
- A tax professional can advise you on the best type of business entity from a tax standpoint, as well as the tax consequences of various financing options.
- A branding consultant can help you decide how to name your company and position it as a distinct brand.
- A trademark lawyer can help you find out if your business name, logo or tagline might be eligible for trademark protection.
Deciding to start your own business is an exciting time. Taking things one step at a time and asking for help will keep you on track and allow you to make the best decisions possible.