7 Tips on How to Get Started with Your New Business
When you are starting your business, there is excitement, apprehension and a few unknowns. I am sharing tips on how to get started . Many people get caught up in the details and wait, never taking action on what their vision is. I’m here to say, just jump in. You can do it. I’ve laid out 7 things I personally did before my business launch. Doing these simple things will enable you to grow with more ease and flexibility.
1. Determine Your Business Offering
Whether you offer products or services, it is important to map out all the details of what you will offer to your customers.
The #1 questions to ask is, ‘What problem do I solve’? Determine what you uniquely do, and who do you do it for. Clarify your offering for customers by talking to your customer about your product and service, the cost, and how it can make their life better.
MY TIPS: There are a few exercises that are worth exploring as you dig into your business offering. The first is Start with Why, and the other is Design Thinking Methodology. I’ve done both in-depth, so feel free to reach out with questions!
2. Understand Who Your Competitors Are
Research your market, competitors and get clear on what your value proposition is vs. your competitors. You might sell something that is better quality, or more competitively priced, or if you are selling the value of ‘you’ - you’ll want to position why your story is more compelling than others. As you build your brand and evaluate competitors, make sure to refine messaging and marketing strategies so that you stand out!
3. Create Your Strategy
I think of strategy as the vision, roadmap and plan that the company will execute on. All strategies should be tied to goals and objectives of the business.
Creating KPIs or OKRs and simple goal setting structures will help you convert strategic objectives into actionable plans for you and your team to carry out. It’s important to have the BIG vision for the long-term, but create tactical and measurable short-term goals so that you can scale effectively and be aligned with your team.
MY TIPS: Check out these strategy frameworks to see if you can leverage ideas on how to lay out your business strategy.
4. Set up your Business Entity
Establishing a business entity will ensure that your business is set up to operate legally and efficiently. Even independent freelancers, bloggers, and consultants can benefit.
The LLC (Limited Liability Company), S Corporation and C Corporation are the three most common types of business structures in the U.S. These structures have unique differences and advantages.
LLC is great for small businesses that want liability protection, and minimal paperwork.
S Corporation is a pass-through entity for federal taxes and is great for small businesses that can qualify.
C Corporation is a standard corporation which files its own tax report. While not ideal for freelancers, the C corp is optimal for businesses who seek funding from a VC.
Note: I have seen several businesses shift from LLC to C Corp when unexpected growth or funding was on the horizon; this is not uncommon.
MY TIPS: I set up an LLC, and used Bizfile services to facilitate the process. A few reasons I did this (even before having clients):
DBA Name: Filing a DBA "Doing Business as" name for your company is a simple and necessary step. Going through the process of verifying my legal businesses name was important to me, because I wanted to make sure I owned the business name legally before buying a domain.
Personal Liability and Asset Protection: When you set up a separate business entity it limits the liability of the business owner. The LLC acts as a corporate shield.
Tax Benefits: When you form your LLC, your business will have a Tax identification number, but as an LLC, you may also file on your personal taxes which is less cumbersome in the beginning.
Separating Business Finances: Having the separate entity also allowed me to easily set up a bank account so I could isolate my business expenses from my personal. I set up my account and deposited my 'Startup Investment'. That was money I allocated to pay for upfront business costs.
If you need a little hand-holding, I suggest walking through Legalzoom or Bizfile questionnaires and setting up this service.
5. Create a P&L.
Create a spreadsheet to track your revenue and expenses. You don't have to use expensive software when you are first starting out. I suggest doing this in excel.
What does a Profit and Loss worksheet track?
Net Sales
Gross Margin - Expenses = Net Operating Profit
Net Operating Profit + (Other Income - Other Expenses) = Net Profit Before Taxes
Net Profit Before Taxes - Taxes = Net Profit (Or Net Loss)
MY TIPS: Keep it simple. Here are a few examples of what to track:
Monthly Expenses:
Office Supplies: Furniture, Computer, Paper, Pens, Folders, Printer, Ink.
Office Expenses: Rent, Utilities: Electric, Wi-Fi, Phone.
Travel: Flights, Transportation, Meals related to business.
Cost of Goods: If you are creating or manufacturing goods, document all costs of materials and production.
Licenses & Fees: Software subscriptions, business license etc.
Marketing Expenses: Promotions, Advertising, Branding, Website Development, Printing.
Professional Services: Fees to Consultants, Accountant, Legal.
Salaries: Full-time and Part-time employee costs.
Monthly Income:
I personally like to bucket income into categories so I can track where the business is earning the most.
An example:
Hourly Project Fees
Monthly Retainer Fees
Commission Fees
Referral Fees
Speaking Engagements
eCommerce
I also like to track the source of my income, for instance whether it was a Referral from Client, Web-to-Lead, PR etc.
6. Get Legal Contracts in Place.
Getting legal contracts set up is easier with great online templates and tools. It’s important to have a few contracts in place as you get started with your new business.
Mutual NDA (non-disclosure agreement) to protect all parties' confidentiality.
MSA (Master Services Agreement) - this is a contract outlines responsibilities of both parties in the partnership. It typically includes services, rates, and terms of services.
SOW (Statement of Work) - this document specifically outlines the work and responsibilities.
My TIPS: Download templates online here or here and/or ask friends in your industry to share a template. You don’t need a lawyer for this (yet).
7. Get Your Website and Social Set Up
Getting your website url, setting up your social profile, these are simple steps in the process and will help you bring your business to life. Before you share it with the world, you have to get the domain on GoDaddy, make sure you can come up with a profile name that aligns with your business, on Instagram and then you’re off to the races with getting your website set up.
For your website. you can utilize Squarespace, Wordpress or Wix. I’ve used them all and they all have various benefits depending on what type of business you have. The good thing is, no matter what platform you choose there are design templates, tutorials and DIY guides to help you set your site up on a budget.
After you sign up for the site, and choose your template, create a document for all of your content and copywriting. We’ll talk about brand positioning in more detail on the blog. But first start with Who you Are, What you Do and How to Engage with you or How to Buy Your Product.
Once you've accomplished these steps, you'll be on your way!