BEFORE STARTING A BUSINESS

7/20/2022

By Kelly Bagla, Esq.

Thinking about starting a business?  If you are – Brilliant!  Congratulations on taking control of your life and being part of the 31.7 million small businesses in the USA.  Before jumping in with both feet, it’s important to research your industry, find competitors, understand risk and map out your finances before starting your business.  

Starting a business can be stressful, but having the independence of being able to provide for your family is beyond security.  Starting a business does come with work, often feeling like there are a thousand things to work on all at the same time.  There’s no avoiding this reality for new small business owners, but with planning, it’s possible to manage expectations and take actions with a sense of purpose toward building your business.  

Many people who have started businesses usually take these steps:

DO YOUR RESEARCH.  You should understand the industry you’ll be involved in so you can dominate it.  No matter how unique you might think your business idea is, you should be aware of what your competitors are doing.  What’s worked for them and what’s not so you can avoid their mistakes.  

DETERMINE YOUR AUDIENCE.  Spend time considering who your target demographic will be.  This audience will be the driving force in each decision you make.  Understanding who needs your product or service can help fine-tune your offerings and ensure your marketing and sales strategies are reaching the right people.  Part of this decision is understanding if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise.  Within those parameters are multiple categories, including but certainly not limited to age, gender, income, and profession.  You cannot earn a profit without your customers, so understand who they are and make them your priority.   

HAVE A STRONG MISSION.  Standing out is no easy task and no one magic formula guarantees results.  However, knowing your business’s purpose is central to guiding these decisions.   By spending time on what’s important to you, what your business’s strengths will be, what differences you want to bring to your target market, and what purpose will those differences serve, you can create a strong mission statement that will reflect your business beliefs.  Staying true to yourself will show your audience that your business will be consistent and your customers can rely on you for the same professional quality of goods and service.  It’s only appropriate to mention that one of my favorite quotes is “Why Blend In When You Were Born To Stand Out.”  

MAP YOUR FINANCES.  Starting a business requires money that you likely won’t have right away.  This is why you need to seek out ways to acquire capital.  Most entrepreneurs start a business with a very limited amount of capital.  However, there are plenty of options available to an inspiring business owner.  The first and most common place to seek capital is from friends and family.  If that is not enough, expand the search to angel investors and then venture capitalists.  Should these options not provide the amount needed, then apply for business loans through banks and small business associations (SBA).

UNDERSTAND THE RISK.  Of course, there will always be a level of risk involved with launching a new business venture, but calculating, understanding, and planning for risk is an important step to take before you start working on your business.  This means assessing your industry’s risks before moving forward with a business plan.  Risks can come in many forms, as mentioned, industry risks, financial risks, loss of customer interest, and most importantly, being sued and losing everything.  Planning and preparing as much as you can for business-related risks could save your business from going under and save you thousands in hard-earned money.  

HAVE A BUSINESS PLAN.  Business plans come in many forms, for example, business plans to raise money, business plans to expand operations, and business plans to start a business.  The latter one is the type of business plan you want to start with.  Keep in mind a business plan is a live document that will change when your business needs to change or expand.  It can be tedious drafting a business plan but it’s essential to keep your business on track.  Start the business plan by first outlining the steps you need to take for a successful launch and continued growth.  Include the following: your mission statement, a description of your business, a list of your products or services, an analysis of the current market and opportunity, a list of decision-makers in the company, along with their bios, and finally your financial plan outlining how and when the money will be used.

By becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion.  Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you.

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