a freelance writer and business consultant, a lot of people come to me with a
business idea and want my help with writing a business plan.
to what many aspiring entrepreneurs think, writing a business plan isn't the
first or most crucial step to start a business. For most people-especially
those who have not yet started a business-this is one of the last things you
want to do in the start-up and get-off-the-ground phase.
article is specifically designed for those brave souls who have never started a
business, have a burning desire to do so, but don't know where to start. Here
are 10 practical, learned from the school of hard knocks, tips that will help
you avoid common pitfalls and get started right. (And keep in mind that these
are intended for businesses that need little to no start-up capital.)
you do anything else, read these four books in order: Cash Flow Quadrant by
Robert Kiyosaki, The Art of the Start by Guy Kawasaki, Burn Your Business Plan
by David Gumpert, and The E-Myth Revisited by Michael Gerber.
time to create your business "spiritually" before you create it
physically. See it in its best, most perfect state, as a world-class operation.
How does it look, feel, taste, smell, and sound?
is one of the hardest things you will ever do, and your business must
invigorate and excite you consistently, otherwise you won't last through the challenging
these dreams down--this is not a business plan, just written dreams, plans,
goals, and brainstorms. The formal business plan will come much later.
you invest a lot of time and money in your dream, do adequate research to find
out if your idea is viable and sustainable.
this step, you basically want to ask and answer a lot of questions, such as
these: Will the market support your idea? What evidence do you have to support
this? What discontentment exists that your idea solves? Will it unleash an idea
virus? Who else is doing it, and how successful have they been? What will you
do differently? Do you have a readily identifiable market? Do market trends
support the idea, or will the idea be obsolete in a few years? Do you need
funding? If so, how much and by when? What technology can be leveraged in the
business? What skills do you lack necessary for the business?
also that hands-on experience can be the most useful form of research--you may
want to implement your business on a small scale at this stage to see what the
market tells you.
you're convinced that your idea will work, now it's time to make it real and
form a business entity. You need an entity for four reasons: to be legal, to
maximize tax savings, to decrease liability, and to maintain control.
basic business entity options include a sole proprietorship, LLC,
S-Corporation, and C-Corporation. Meet with an attorney and a CPA to discuss
the differences between them and choose the appropriate entity for your uses.
This will cost about $125 if you do all the paper work yourself, or between
$200 and $500 if you use a professional or an attorney.
addition to your entity, you must also ensure that you are legally compliant in
all other areas. For example, if you have employees, you probably need Worker's
Compensation Insurance. A good attorney will help you safely navigate all the
legal issues you will face.
step is critical. Too many newbies try to do too much at once, and are so
concerned about things like image that they spend tons of money, time, and
effort on logo and branding work, marketing brochures, advertising, etc. While
all of those have their place, they should be paid for BY the revenues
generated by the business.
that you've had your time to research the steps, it's time to be extremely
pragmatic about applying them. Do whatever it takes to generate revenues, even
if it means door-to-door selling. No dream, however inspiring, will ever be
realized unless you can pay for it to materialize.
that you have cash flow, it's imperative that you manage it wisely. Account for
EVERY income and expenditure, no matter how trivial, and maintain impeccable
records. You'll be glad you did come tax time.
most common accounting software programs are Quick Books and Quicken. Or, you
can use a quality bookkeeping service, which can help you with payroll and
quarterly taxes in addition to keeping your records.
Begin Writing an Operations Manual
Operations Manual gives you the ability to leverage your efforts and duplicate
yourself by providing simple, step-by-step directions that anyone can follow to
perform any task.
your business is the most important thing you will ever do, and you can never
start soon enough. Systems, of course, will be refined over time, but it's
critical that you get them down in writing and keep them updated.
may also consider using a professional writer to write your Operations Manual.
novices want to immediately start spending money on advertising, without
knowing the costs and/or benefits. It's been said that advertising takes a lot
of money, while marketing takes a lot of time.
start-ups, stick with marketing; in most cases, you have time, but you don't
have money, and marketing is generally more effective anyway. Advertising is
costly and relatively ineffective. Start-ups should be obsessive about managing
finances wisely, and very cautious about spending money.
would include things such as billboards, radio and TV ads, flyers, yellow page
ads, etc. Marketing usually boils down to direct selling of some kind, whether
it be telemarketing, door-to-door sales, customer referral programs, etc.
your idea and delivery systems are good enough, the business should market
itself viral anyway. In any case, find something that gets results, stick to
it, and create and document systems in your Operations Manual.
Refine Systems, Replace Yourself, More Refining, & Document Religiously
the first year or so, you will most likely be performing most, if not all,
tasks yourself. This gives you the opportunity to learn and work out necessary
details, but it won't be sustainable when it's time to grow.
an Operations Manual in place, you can now begin hiring and training others to
replace you. Once they're replaced, then continue to oversee and refine the
you must be religious about documenting every aspect of your business. For
example, if your business does door-to-door sales, all salesmen should document
how many doors they knock, how many people they talk to, and how many people
time, this data will prove to be invaluable as you seek to refine your systems;
without real numbers you have no idea what's working and what's not.
Write a Business Plan
last step in the start-up process is the one that most people think they should
start with. Here's why it should come last: if you want it to secure funding,
investors will want to see a proven track record before they invest anyway, and
if you do it after the first nine steps, you can now do it right, with actual
numbers, facts, and statistics rather than unfounded assumptions.
this gives you an opportunity to reconnect to your dreams after wading through
a lot of trials.
For a free gift to help you get started, click here.
For many small businesses, the “S” corporation is the business entity of choice. The “S” in S corporation refers to a tax designation. All corporations are created the same way under state law. A small business must then choose a tax status, such as, “C”, “S” or non-profit. Important issues concerning S corporations are covered in this article.
C Corporation v. S Corporation
Federal tax laws automatically consider every corporation to be a “C” designation. A small business, however, may elect to be designated as an “S” corporation by filing IRS form 2553. The election must be made prior to the tax year in which it is going to be effective. All shareholders must sign the election.
A C corporation stands alone for tax purposes. It must file tax returns and pay taxes on profits. Profits and losses are reported on the corporate tax return and do not pass through to shareholders. C corporations can elect any calendar month as the end of their fiscal year.
Of late, the topic of succession planning has sparked much concern. However, it seems few organizations have heeded the warning. According to a Human Resource Planning Society and Hewitt Associates study, fewer than 60% of companies have a succession plan in place.
Below are some of the most common myths about succession planning.
Myth #1: If there are no imminent retirements, succession planning does not need to be a top priority.
According to a survey conducted by Capital H, nearly 22 percent of respondents expect to lose between 10 percent and 25 percent of their top performers to retirement within the next five years. These top performers play a significant role in a company’s success, often serving in high-level, supervisory roles. For successions to progress smoothly, the people chosen to fill these roles need to be prepared and adequately trained. That process takes time.
Myth #2: Succession planning is only an issue for big companies.
Effective business networking is the bringing together of like minded individuals who, through relationship building, become walking, talking advertisements for one another.
Keep in mind that networking is about being bona fide, building trust, and seeing how your relationship can genuinely help others.
1. Always figure out before you even walk into a room, what your specific goals are in attending each networking meeting. This helps you to pick groups or associations that will help you get what you are looking for.
2. Ask open-ended questions during your networking conversations, questions that ask who, what, where, when, and how. Try to avoid questions that require a simple yes or no response. By using this line of questioning you can open up the discussion and show listeners that you are interested.
3. Become a walking resource center. When you become known as a strong resource, others remember to turn to you for suggestions, ideas, names of other people, etc. This keeps you at their…