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September 1, 2008
Publicity
Since a new company usually has limited working capital, new entrepreneurs must learn how to handle the business marketing themselves. One aspect of a marketing plan is free publicity, which can involve newspaper, magazine, and other publication articles depicting an interesting slant about a new business, segments or mention by the media (radio or TV), and press releases. You do not need an expensive Public Relations firm to contact these PR resources or prepare and distribute press releases to them.
A new business owner can type a couple of concise paragraphs and mail them out. Also, direct phone calls to writers and editors can result in a publicity release or a story. In addition, establishing a relationship with a few editors by calling and writing can produce frequent mention or articles on your business and, in some cases, a business can become a resource for the editor's information on business topics.
To be effective advertising, even if free, should produce sales. Your press releases and other publicity content should include, to the extent possible, your business name, street address, phone number, website address, and product pricing. A lot of press releases only talk about an owner or a product or service and are not worth the time, money, or effort unless they communicate enough business information to adequately inform the reading or listening consumer and translate into sales.
March 17, 2008
Equipment leasing
Raising capital for a new business venture is generally a challenge and a business owner should always evaluate equipment leasing for furniture, computers, copiers, manufacturing equipment, vehicles, and other business equipment. Equipment leasing can offer many advantages - 100% financing (or preserves working capital); can permit a better grade of equipment than a purchase; fixed interest rate; terms from 2 to 7 years; lower documentation fees; easy application and approval process; various end-of-term options; minimizes risk and obsolescence; ability to add on or upgrade equipment after or during the lease; tax savings in some states; cost of leasing can often a larger tax deduction than a depreciation expense; often does not effect your business line of credit; and may not increase your balance sheet liabilities. Lease rates vary based on the size of the transaction, credit rating, and other factors; however, the leasing industry, like the banking industry, includes a large mix of companies with varying interests in customers and lease transactions which means most companies can find equipment lease financing to suit their needs.
February 11, 2008
Recordkeeping
While customer management, inventory control, and other required operational systems may be considered, recordkeeping is one of those things that most beginning entrepreneurs overlook. Recordkeeping elements vary by company and can include customer billing, accounts receivable, accounts payable, property accounting, payroll, cash receipts, credit cards, checking, investment, and merchant bank accounts, customer and vendor contracts, and corporate records. Record keeping and access to information is important not only for tax return preparation and researching business transactions; but also, for the efficient day-to-day management of a business.
Building records and trying to analyze information after weeks or months of operations is generally inefficient and can result in wasted clerical wages, professional fees, and owners time away from running the business.
Therefore, recordkeeping systems should be planned as part of a new business startup. Often a small company can operate with manual accounting systems; however, computer software packages are much more efficient and are affordable for most companies.
December 31, 2007
Fictitious Business Names
Business trade name registration is important for a new business. Corporations and certain other business structures are required to be registered, including an approved entity name, with the state. However, these businesses often elect to operate the entire business, or offer certain products or services, under other trade names, which are referred to as fictitious, or Doing Business As (DBAs), trade names. For example, Smith Motor Company may elect to operate under fictitious name "SMC".
Also, sole proprietors and general partnerships that do not use the owners' surnames must register a fictitious trade name for the business. For example, Joe Smith Consulting would have to register a fictitious name to operate as JS Consulting. Some states require fictitious names to be registered on a state level; however, fictitious names are generally registered with the local county and/or city government.
December 17, 2007
Employer Identification Number (EIN)
Every business should have a Federal Tax ID, or Federal Employer Identification Number (EIN). An EIN is required for corporations, multi-member Limited Liability Companies (LLC), and other types of business entities. The Internal Revenue Service (IRS) does not require a sole proprietorship or single-owner LLC to obtain an EIN unless the business has employees; however, these business structures should have an EIN in order to establish a credit history for the business separate from their personal credit records. An EIN application, Form SS-4, can be obtained from the nearest IRS office, by phone, or over the Internet.
December 3, 2007
Patent Protection
In addition to product inventions, certain unique business method ideas can be protected by patent. Inventions and business ideas are easily copied. Therefore, before discussing your new business product or idea with potential customers, manufactures, investors, or other outsiders, be sure that you have researched the availability and applied for a patent with the United States Patent and Trademark Office (USPTO).
November 19, 2007
What Not To Do
Starting a new business involves a long list of things "to do"; however, there are also several common mistakes, or things "not to do", including:
Education or training. You will likely be too busy to spend time learning the required technical and operational skills of a business after you commence operations.
Startup Capital. Starting a business on a shoestring is very risky. Make sure you have the capital in place to get through the projected startup phase.
Contingency Plans. You always plan for success; however, you should have contingency, alternative, or fall-back plans in case sales do not materialize as projected, the economy goes into recession, or other unexpected events affect your business.
Spending carelessly. Overspending on new office furniture or committing to office rent that is too expensive can burn working capital the may be needed for marketing or pay future salaries as you build the business. You want to project a professional image and attract customer traffic, but be realistic and conservative with your financial resources.
Low Energy. Don't start a business unless you are prepared to devote the time and effort to make it successful. Business ownership can offer many perks and benefits in the long-run, but starting out you will be working very hard. Without this energy and enthusiasm, remaining may be better business choice.
Product testing. Don't start a business without market testing and confirmation of customer demand for your products and services. Many businesses have failed because they were based on product or service success in another market or other subjective reasoning or assumption of consumer interest.
November 5, 2007
Finding Customers
Entrepreneurs may have great products or services and the technical the planning, management, and technical skills to run a business, but they still need customers to succeed. Just hanging sign or launching a website will not be enough to attract customers. A new business marketing plan should identify the alternative techniques to reach your target customers. Customer and prospect referrals, personal and professional networking, print, TV, free publicity, billboards, direct mail, and other methods may be required to find customers for your business.
October 22, 2007
Trademarks
Trademarks protect words, phrases, symbols, or designs, such a business names, products, or logos, and can be an important consideration of a new business. You do not want to invest years developing brand recognition and goodwill in a business and then, when you are ready to expand to other markets, find out that someone else has the registered trademark on the name. The U.S. Patent and Trademark Office (USPTO) provides all of the information, search tools, and forms necessary to file for Federal trademark protection.
October 1, 2007
Banking Relationship
A local banker is a typical professional resource for an entrepreneur along with an attorney, accountant, and insurance agent. Though many service businesses do not require borrowing startup capital, every business needs a business bank account. Selecting a bank that can serve your business needs and developing a long-term relation can be very beneficial. While there are numerous local, regional, and Internet banks and lending criteria can be ridged, a good business banking relationship generally facilitates borrowings and, in some cases, can overcome certain loan underwriting deficiencies.
September 10, 2007
Business Site Selection
Selecting the location is an important decision for all new business owners; however, the right, or good, location varies by type of business. For a personal selling over the telephone and by visiting customers, a home office is a good location, whereas a sandwich shop needs a high traffic location like a strip-mall. Some of the major considerations in site selection are customer traffic, visibility, zoning, signage, parking, competition, and appearance. Also, new business owners generally have limited capital budget which means they should be conservative when committing to a location rent and furnishing. In many cases, the business location can be upgraded as the business, profits, and number of employees grow.
July 15, 2007
Credit Cards
Customer convenience and cash flow are important considerations for any new business. Though merchant accounts, credit card processing, and other forms of electronic payments involve transaction and other fees, the business benefits generally outweigh the costs. Today, individuals and businesses commonly use credit cards, debit cards, and other forms of electronic payments that retailers and other types of new businesses should evaluate in their business planning.
April 23, 2007
Positive Attitude
You often hear discussions and advice on maintaining a positive attitude about your personal life; however, this principal also applies to your business. As a new business owner, your company leadership should include a positive attitude that will affect you, your employees, customers and suppliers. A positive, "yes", approach will overcome that lost sales contract, a resignation of a valued employee, or other business obstacle and result in your ultimate success. A positive attitude enables new business owners to continue learning and achieving their goals.
April 2, 2007
Business Insurance
Some new business owners are under the impression that if they operate from their homes they do not need business insurance. This is inaccurate. Even businesses operated from home generally require homeowner's and personal vehicle insurance policies to be amended in order to reflect the commercial or business. As a new business owner, you should discuss your planned business activities with your personal insurance agent or a qualified business insurance broker or agent to assess your business risks and obtain the appropriate business coverages.
March 12, 2007
Business Licenses
Most businesses require a business license. There are two basic forms of business licenses. Professional licenses (insurance agents, hair stylists, contractors, etc) managed on a state level and general business licenses managed on the local city county government level. Penalties for operating without a license can be severe; therefore, this step in starting any new business should not be overlooked.
February 26, 2007
Research Sources
New business research can involve the industry, local or national competition, population and economic demographics and trends, and other considerations. This information is available through the local library, federal and state government statistical reports and business development agencies, industry associations, published competitor information, and other resources. Also, the federal Small Business Administration (SBA) offers free professional business planning services.
February 12, 2007
Business Planning Checklists
Starting a business venture involves many steps and business considerations.
One of the best and simplest tools to organize and manage your new venture is the checklist. Business entity formation, staffing, accounting systems, and an overall plan can all be reduced to checklists that will help you
through the start up process.
January 22, 2007
New Business Research - Beware of Scams
Many individuals want to buy or start a business, but are uncertain about a business, franchise, or industry. When researching business opportunities, you will discover many that offer significant return on investment and income potential. All new business ventures must be thoroughly researched to confirm feasibility; however, be particularly cautious in those situations requiring large upfront fees or advertising investment returns that appear too good to be true. Business background and credibility can be researched through various resources including customer/franchisee referrals, the Better Business Bureau, state consumer protection services, the Federal Trade Commission, and professional investigative services.
January 8, 2007
Business Contracts
Many businesses require some form of contract in order to deliver product and services to their customers. When a new business opens the doors and begins marketing to customers, it should be prepared to close business sales and contract for services with a legal document - Sales Contract, Service Contract, Warranty Agreement, Financing Agreement, Tenant Lease, Construction Contract, Bill Of Sale, and Real Estate Sales Contract etc. In addition to customer contracts, many businesses utilize employment, non compete, confidentiality, independent contractor, and distributor agreements in their operations.
The Internet provides easy access to samples of most business contract forms. Also, today's computer software products are very efficient tools for new business owners to use available samples to draft legal documents applicable to their operation. However, drafted documents and overall legal contract requirements for a new business should be reviewed with business' local lawyer.
November 27, 2006
Target Marketing
To be cost efficient and effective, your marketing message must consistently reach the target audience for your business products and services. The business environment is very competitive with constant consumer solicitation. To understand the magnitude of marketing clutter, the 294 million people in the U.S. are being solicited by 23 million businesses over 100 TV channels, 7,000 radio stations, 10,000 magazines, 2000 newspapers, 55,000 call centers, and 3,500,000 e-commerce websites. Only large companies like McDonalds or Ford Motor can afford and benefit from broad, network advertising. Small and most other businesses must focus their advertising towards their target audience.
A new business should have a marketing plan to reach it target market. The first step is to define and prioritize by sales opportunity the target market. The second step is to identify the marketing and advertising methods (referrals, print, TV, radio, etc) that will effectively reach the target customers.
November 13, 2006
Small Business Failures
Small Business Failures
Federal Small Business Administration statistics report that 80% of all small businesses fail within the first five years, which equates to several hundred thousand business closings annually. Proper planning may be the basic tool, but there are several elements to consider when starting a new business venture. Following are the more common reasons that small businesses fail or, in other words, the more important new factors in planning a successful business:
1. Lack of experience or vision
2. Failure to set goals or unexpected growth
3. Lack of management systems
4. Lack of product or service quality control
5. Poor location
6. Insufficient capital (money)
7. Poor inventory management
8. Over-investment in fixed assets
9. Poor credit arrangements
10. Personal use of business funds
11. Competition or lack of market research
12. Low sales
October 30, 2006
Partnerships
All entrepreneurs wear several "hats" to implement, manage, and grow a business. A new business owner may have strong sales, engineering, or computer technical skills, but must rely on others for accounting, human resources, and other business management support. In some cases the outside professionals can provide support; however, in other cases, a business partner with complimentary business expertise and skills is the most effective solution.
Many new businesses have been successful operating as partnerships. The important elements are proper partnership selection, planning, and documentation. An entrepreneur should select a partner who is compatible in various areas - personal level, work ethic, and income and business goals.
Partners should consider and plan both the new business operations and the personal issues. New business partners should have written management, ownership buyback, and other agreements in place to minimize disagreements and provide solutions for certain controllable or uncontrollable events.
October 16, 2006
Financial Statements
Operating results and other financial information are critical to managing a business. Every new business owner should design the financial statements and reports that are necessary for managing the business. Income Statement, Balance Sheet, and Cash Flows are the three basic financial reports, but certain businesses require additional reports on other financial aspects such as Sales, Accounts Receivable, Cash activity, and labor costs. Monthly is the typical timing for most financial reports; however, some businesses require daily, weekly, and other interim reports. Today's accounting and management software packages provide business owners will considerable flexibility in financial report design and frequency.
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