Advice About Operational Aspects When Starting A Small Business From Scratch
At this point in the journey, you have established what you think it will cost to launch your new business and have identified where the funding will come from as well as conducting some market research to establish that there is a market willing to pay for what you are offering. Now, we need to consider some of the operational aspects that will put your business on the map.
You need to create a Business Identity which includes a good business name, logo and a website so that your prospects will have a positive reaction to you.
When it comes to a business identity, the most recognizable attribute is the business name. Here are 13 rules you can apply when choosing a good business name.
After the name, the company’s logo is the next most recognizable attribute to consider. Here are 5 rules to consider when choosing logos.
The color of your business identity can convey a message to the customer. Here is what you need to understand about color when it comes to your business identity.
These days, most buyers will look up your website before doing business with you. However, there is a harsh reality, particularly for small business owners, when it comes to a website.
Many business owners who are just starting out have more time than money and usually think about doing everything, from their logo to their website design. I, personally, believe this is a bad idea and think it is far better to leverage offshore experts who can do a better job for little money while you work on the more important aspects of your business.
At this early stage of creating a new business, some owners have very high expectations of success. They also have personal values that have no place at this point in the journey of starting a new business if they hope to be successful. Businesses at this stage need to preserve as much startup capital as possible by outsourcing elements to experts even if it goes against their personal values.
Below is a post that covers the 10 elements you should consider when designing your website.
Business and Legal Entity Selection
Now it is time to consider the proper legal entity for your business such as an LLC, S-Corp, etc. The first concept to understand when it comes to regulatory compliance is related to the truth about the limits of liability protection.
Another concept businesses need to understand that is often misunderstood is why you even need to register an entity with the Secretary of State.
Another misunderstood concept is related to obtaining a business license which is very different from registering an entity with the Secretary of State. Here is a video that explains why sometimes you also need a business license.
Here is a link to the Colorado Occupational Database which is where you would go to see if your industry requires you to have a business license. Of course, every state has its own similar database.
The next concept related to an entry selection is what is known as a pass-through entity for income tax purposes. Here is an excerpt of a video lesson from Boot Camp: Steps to owning your business, which explains what a pass-through entity is and how it will affect your income taxes and the kind of investors you could attract.
When it comes to selecting the proper entity for you, there are pros and cons for each entity. This post from SCORE does a pretty good job at describing the pros and cons of most common entity types.
Once you register your entity with the Secretary of State, there are several common formation errors that you need to avoid.
Getting Paid as Owner or Manager
The way you get a return as an investor and/or employee of your business varies by the entity type you selected. Choose an entity from the following list to see a post on how owners and managers are paid:
The final topic related to business entities is the creation of a non-profit. Many times, the founder thinks they want to create a non-profit but non-profits are often not necessary or even recommended. Below is a post that looks at what you need to know about non-profits.
Also, if creating a non-profit is the right entity for you, you should pay particular attention to the makeup of the board of directors as outlined in the following post.
Dealing with Risk
Starting a business is about managing risk and reward. Insurance is just one way to mitigate risk to the business, however there are many other ways to assess and deal with risk. The following section will take you to a section devoted to ways to mitigate risk. The link will open a new tab that will take you directly to the Assess and Managing Risk section of the navigator for you to review. When done, you can simply close that tab and resume the discussion in this section.
At this point, if you are service related business, you are done. But for some other types of businesses, here are a few elements you may want to consider.
However, there as few more items worth covering if you have a brick and mortar establishment.
By definition, a hobby is something you spend money on, and a business is something that makes you money. If you have a hobby that you think could be converted into a business, you will want to listen to the podcast series Going Pro: Hobby to Business that are available here as well as on iTunes and Stitcher.
Getting Paid By The Customer
When you are a service provider, here is what you need to know about getting paid.
Does the business have an invention they want to patent and bring to market? Below are several posts that deal with the limitations of patents as well as some of the challenges the business will likely face trying to be successful.