There’s something different about entrepreneurs. In some respects, we are gluttons for punishment. We will get back up and try again as often as it takes until we’ve finally succeeded at whatever we have set our minds to. While others might see such behavior and think that we’re crazy, I see it as noble and admirable. As a financial planner with years of business planning and growth, I work with fellow entrepreneurs often. I know where you are… you have a BIG IDEA, and you are excited about it. But removing the emotion, implementation begins with assessing your business idea. In this series, we will start here as the first step to getting your business running.
Just because you have a great idea for a business doesn’t mean you will be a good businessman or woman. In fact, your personality traits could exclude you from successful business ownership altogether. Before you jump into creating a business around your idea, take a moment to evaluate yourself. Do you have an entrepreneurial personality? Do you have the type of personality to make it in a cut-throat marketplace?
As an entrepreneur and someone who has worked with hundreds of other entrepreneurs over the past nine years or so, I’ve observed certain common characteristics of successful business owners. I’ve seen these traits in the people I have worked with and in ones I have studied. Of course, having these traits does not guarantee success in the business world. “Normal” people often share some of them, but thriving leaders often have many, if not all. So, what are the common characteristics these entrepreneurs have?
As an entrepreneur, coming up with BIG IDEAS is easy. However, putting that idea on paper to determine it’s viability in the business world is a different matter. Most go-getters don’t really like to stop when they’re on their way to success. But the path to success requires patience and discipline. Simply having the personality traits of a business owner doesn’t mean you’re ready to be one. Therefore, I have listed ten essential questions for you to answer before starting your business.
Perhaps the most difficult and lengthy section of a start-up business plan is conducting a market analysis. You can describe your products and services all day long. I’m sure you can even forecast the future financial success of your business. Yet, when it comes to completing a statistical overview of your industry norms and the customers you intend to target, you get hung-up. By understanding your industry, though, you will gain a better understanding of who your target market is and how you can make an impact on your industry’s current marketplace.
Entrepreneurs with a BIG IDEA tend to charge hell with a water pistol. You have a product or service, you see an immediate need, and you don’t want to waste a second to meet it. That’s just who you are, as an entrepreneur. But it’s not time to start the battle just yet. It is senseless to brandish water pistols without a reservoir of water to refill them. You need to build and fill a financial reservoir in your personal life so that you have enough to sustain your business life. Therefore, I invite you to sit down on a cushy couch and learn from my “Grandma’s Wisdom.” I’m going to help you prepare your personal financial assessment as the first step in building a financial plan for your startup. So let’s get started, crunching the numbers and seeing how they affect the financial plans for your startup.
When preparing your personal financials for business ownership, you need to do a personal financial assessment. Determine whether you are asset-rich or asset-poor, then make the adjustments that are needed to increase your net worth. While you’re examining and increasing your net worth, you will also need to increase your personal cash flow. Not only do you want to increase your assets and decrease liabilities, but you also want to increase income while decreasing expenses. Don’t simply prepare your financial statement. Build your personal budget. Then, use what you learn to decide what changes you’ll need to make to your personal finances before starting your business.
I know you’re excited to start your business. You’re probably thinking, “Come on, Justin! Enough is enough. I’m tired of this prep work. Let’s get down to business.” Well, time out. Before hitting the hardwood, you need to assemble your team… a professional advisory team of players to help with technical matters. You will need to establish your business as an entity, get advice about tax issues, seek loans from investors, and so on. You will need expert help from these highly educated and professional business advisors.
When starting a company, the business structure you pick can be vitally important. Choosing among the different business types will affect your day-to-day workings and how you pay taxes. Your choice can positively or negatively affect how you are protected as an owner and even your business’ future sellability. While I will provide you with an overview of the five different business types, lean on your “Dream Team” of attorneys, CFP’s®, and CPA’s to know which entity is the best fit for your company.
Many start-up founders who are looking for funding run out and pitch their opportunity to anyone who will listen. I get it. They’re willing to do just about anything to make their business succeed. However, unless they are strategically targeting the right type of money lender, their fundraising efforts may be in vain. When deciding where to spend your time—deciding between an investor vs a bank loan—it’s important you know how each works. Having a solid understanding will allow you to go to the right one—the one who is the best bet for getting the startup capital you need for your new business.
When you start a business, you can see the good your product or service will provide a marketplace. But to be able to make a difference, the business must get off the ground first. However, you’ll need money to make that happen. The good news is, you can start many businesses with very little capital. On the other hand, I’ve worked with many clients who needed millions of dollars as a startup. They needed money for equipment, employees, marketing, retail space, and more. So if you’re like them and need money, where do you get it? Knowing that banks are hesitant to loan money to new businesses, you’ll have to get creative. Therefore, in today’s article, I’m going to discuss twelve types of investors that you might be able to go to when funding a startup.
As your big business-idea becomes a reality, it’s time to start thinking about the structure of your business. What types of software systems do you need in place to work efficiently? How will you process phone calls, work orders, purchase orders, sales, deliveries, etc.? Eventually, every business will develop and utilize operational systems. However, your goal should be to establish certain operational systems BEFORE you open your business. Why? Because in business, efficiency matters. The more organized you are when you open, the fewer problems you’re likely to have after you open. Creating workflow systems in your company can streamline your processes and increase business efficiency.
At this point in our Starting a Business series, let’s assume you’ve found funding and you’re ready to get your business going. However, from the moment you open the front door, you open yourself up to risk. Accidents could happen. Employees could become disgruntled and sue. Your building could burn down. A computer hacker could steal your customers’ personal information. Almost any bad thing could happen. So how do you protect yourself and your business? By purchasing good insurance policies. That’s why, in today’s article, I’m going to cover the seven types of business insurance startup owners MUST have to protect themselves from harm.
As you’re building your BIG IDEA into a business, you’ll probably need to hire employees. Most likely, you’ll even experience some form of employee turnover or volatility throughout the course of your business. So how do you hire “good” employees? How do you know who’s capable, loyal, trustworthy, and dependable? Do employees like that exist? Can you weed out the unmotivated, unqualified, and unreliable? Well, in my years as a business owner, I’ve developed my own hiring practice based on expert advice and what has worked for me. Therefore, I’d like to share the requirements for how to hire the right employees for your startup.
In many businesses, vendors and suppliers are common. Many times, you can’t operate a business without them. In spite of the fact that you may become friends with vendors and suppliers, you’ll still have to negotiate pricing, warranties, and service with them to keep your costs down and your profit margins high. Ultimately, the relationships you have with vendors and suppliers can help drive the success or failure of your start-up business. Therefore, you want to master the art of negotiation. You want to know how to get the best prices from suppliers and vendors in a way that is honorable and above reproach. You want to do so without burning bridges or harming anyone. So let’s jump right in and learn nine ways you can negotiate pricing.
In the start-up of a business, unless you’ve just invented the cure for cancer, you’re going to need to market or advertise. Truthfully, even if you’ve invented the cure for cancer, you’re probably going to have to market and advertise, possibly even more than normal. After all, you’ll have to convince the skeptics that you’ve invented the cure for cancer. Yet, to advertise effectively, you’ll have to develop strong marketing. Therefore, let’s analyze the difference between marketing and advertising. Then, I’ll dive into how to develop a marketing plan.
One of the coolest things I know is this – every one of us, while we’re alive, has 24 hours in a day. Not 26. Not 30. No one is blessed with more time. We all have 24 hours in a day. Now granted, each of us has different abilities, talents, and gifts. Some are able to achieve more in 24 hours than others. Yet truthfully, we control our time. To me, Zig Ziglar explained this concept best when he said, “A lack of direction, not a lack of time, is the problem. We all get 24 hours in a day.” That’s why time management for the startup business owner is so vital. To help you, I’m going to give you a list of 7 ways small business owners can manage time.
As you’re trying to establish a name and niche for your new business within the marketplace, you’ll eventually encounter quality control issues. Whether you offer physical products or services, I dare say that all business owners, even new ones, need to come up with plans to control the quality of their goods or services right from the beginning. So I’ve created a list of my top 5 ways to establish quality control in a startup business like yours.
Most likely, you began your business to meet a need in your marketplace. If you didn’t think people wanted or needed your product or service, then you wouldn’t have opened your business. However, how can you meet consumer needs if no one knows your business exists? You can’t just open a storefront and expect buyers to flock through your doors. No, you have to “sell” your products and services. They don’t talk, walk, or sell themselves. You and your team members have to convince customers they need what you’re offering. You’ve got to market and advertise to get customers into your sales funnel. Then, you’ve got to train your team to successfully close the sale. Ultimately, you must sell your company and its products or services to get and close sales in a startup business.
Selling products or services brings revenue into your new business. It’s your bread and butter if you will. Without income, your company can’t pay its expenses, and you can’t pay yourself. However, the more money you make, the more money you will owe to the government. So how do you hang on to your hard-earned dollars? How do you lessen your tax burden? Or, at the very least, how do you prepare for it? Well, there are a few tax planning strategies for startups that you could consider. To protect the money you make in your business, I’ll give you five strategies I encourage my clients to use. But I challenge you to work with your tax professional to know if these are right for you… you never know, he might help come up with a few more.
Consumers are searching for solutions to their problems. Twenty years ago or so, they’d research products or services at brick-and-mortar retail stores. Or, they’d search for business names that caught their eye in a phone book. Now, with the Internet and its 24-7 availability, consumers are going online first to find information about the products and services they need. Therefore, having a good website that clearly communicates who you are, what you can do for them, and how they can reach you is vital for developing brand equity. Yet, simply building and having a website isn’t enough. Just because you put a website online doesn’t mean you’ll be found. You have to use online marketing to bring people to your business.
Small businesses are the backbone of America, however, carrying so great a load means carrying a great deal of debt as well. In fact, 49% of small businesses are in some sort of debt. Yet, unlike most personal debts, business debts can sometimes be necessary. As a business owner, you may have experienced the need to take on and use debt for many different reasons.
If you plan to accept debit cards or credit cards in your business, you’ll need a company to process those bank card payments. Unfortunately, many cut-throat merchant service providers have given this service a bad name. When I talk to business owners about credit card processing, I inevitably hear groans of confusion and frustration. However, you don’t have to leave your business at the mercy of a few greedy processors. Let me give you a crash course on credit card processing.