Many people dream about becoming an entrepreneur. A life of controlling your own finances, creating your own schedule and running your own business seems much more luxurious than working for someone else. Especially now with more and more companies laying off employees, there’s no real security anywhere. Although lots of people try new ventures, many of these initial ideas fail due to a number of reasons. The biggest one is improper planning for your future financial stability.
Analyzing the Competition
Any way you start out, you really have to know what you’re up against. Understanding the difference between your business and everyone else provides the foundation for marketing your product. Think about how your service compares to other companies offering the same type of thing. How will your business be different in the way it serves its target market? Write these answers down— make a Venn diagram chart if you have to. Just make sure you know where you stand in the market. It means everything to how you will advertise and pitch your product or service.
Business Plan Basics
What kind of values do you want to embed in your company? This is the creme of your morning coffee. A brand that knows what it stands for adds a sultry attraction to your product. Ever call a company 15 times and never get an answer or a return call? Ever deal with crooked “professionals” who abscond with your money? That type of service chases new business away. Understanding what values you want to present to your potential clients helps set the precedent for business building.
Finding the Perfect Name
The name of a business is the first thing new customers and clients see. Make sure it stands out. To begin, do a brainstorm of all the words that represent what you’re selling. If you’ve been writing thoughts down from the last two paragraphs, you’ll already have words to chose from. Pick descriptive words from the business product itself and from the morals and values the business represents. Write as many words as you can. Ask friends and family to help, too. More brains are better than one. Then start piecing words together. Eventually you’ll find the perfect match.
Types of Business Ownership
Choosing what type of company you register as depends on your particular situation. The 4 main types of ownership are:
- Sole Proprietorship: The easiest form of ownership. There is no difference between the individual and the company. Both are equally responsible for the business debts and income.
- Partnership: Two or more people who share in the responsibility and income of the business. There are different types of partnerships as well, such as a General Partnership, Limited Partnership, a Limited Liability Partnership. In a General Partnership, everything about the business is equally shared. A LP has one main partner with unlimited liability and others with limited because they don’t have equal interest in the business; a LLP protects every owner from the mistakes of the other partners.
- Limited Liability Company (LLC): A LLC provides protection to the business owners by bearing the brunt of any legal action while offering the flexibility of a general partnership.
- Corporation: This is the most complex form of ownership, yet provides many tax perks while acting as a completely separate entity from the owners. There are different types of corporations such as an S Corp and a C Corp. A C Corp is pretty basic; it operates as a business separate from the owners, and can be extremely large with owners internationally. An S Corp is a smaller corporation, with finances passing through one or more owners like a sole proprietorship. There is a 100 person limit on ownership and all owners must be citizens of USA.
Filing a Fictitious Business Name
Do a search for fictitious business names in your county. If the name is taken, it’s back to the drawing board. If not, shoot over to Legal Zoom and register your business with the state easily.
Create an Elevator Pitch
At any given moment you may be called on to explain what it is your company does. Having a prepackaged 30 second pitch that encompasses how your business can help a potential client is key to maintaining interest.
- Begin with your overall goal: For the sake of this post, let’s say it’s someone who can benefit from what your new company offers. Your goal, then, will be to show value in doing business with you.
- Tell them what you do: And tell them specifics. Anyone can make bath bombs and lotions. But making SLS free bath bombs, hemp lotions, or a type of specialty is more succinct to the brand.
- Identify the unique selling proposition (USP): This is the item that sets you apart from the competition.
- End with an engaging question: Avoid “yes” or “no” answers. If you’re selling a line of soaps, ask what soaps they use and what their experience with it is.
Price your product or service correctly
Many new entrepreneurs low ball their pricing and undercut themselves and their product. You don’t want to make your business seem less valuable than others or come off like you don’t know what you’re doing. People are vultures who can smell weakness. It seems to be human nature to take advantage of people when they obviously don’t know any better, so get some quotes, find a happy balance, and push your product with confidence.
On the Cheap
Conduct your business for cheap as long as you can. Too many new entrepreneurs think they have to be all in, spending money they don’t have or offering too many products when they don’t have a demand yet. Unless you absolutely need a storefront location, don’t sign a lease anywhere until you know the customers will come. There are plenty of ways to get your services or products out there without spending thousands of dollars unnecessarily.
We all know of the person who jumps right into a business venture without a plan or a system in place. It’s great if an opportunity presents itself! Always accept a good offer, and always be prepared to protect yourself. When doing business with anyone, make sure there is a business contract drafted to plan out clear guidelines of the service offered and how you’ll get paid. Rocket Lawyer has free trials where you can get some pre-made templates!
Now that you have an idea of where to begin, get out there and make some boss moves.