Starting a business can be the most exciting career move in your life. You’re passionate about your ideas, and you can’t wait to share them with the world. The urge to move forward fast can be your biggest mistake, though. Every successful business owner will tell you: there is a lot you need to research and understand before starting your business.
This point was made clear a while back when I had a quick chat with Jack Peterson, a former CFO with Kraft and U-Haul and the current owner of BLD, a restaurant in Chandler, Arizona. As you know, I love asking business owners what advice they have for their peers. Jack’s advice for new business owners started with a thought-provoking quote:
“You’re starting on a long journey. Make sure the first step is in the right direction.”
This quote touches on the importance of planning before you actually start the business. You can listen to Jack’s advice by clicking the video below. I’m also exploring the topic today with 7 things you need to know before starting your business.
7 Things You Need to Know for Starting a Business
1. Name Availability
Your business’s name is crucial to marketing. We’ve been told that it should be short, memorable and creative, but as you’re wracking your brain to come up with the perfect name, don’t forget to do the research to make sure it is available. Is the trademark available? What about the URL and social profiles? Researching the availability of your desired business name will help you avoid legal troubles and facilitate your online marketing down the road.
2. Licenses, Regulations, and Taxes
Before you dive in, you also have to know your other legal requirements for starting a business. For example, you should research if there are any special licenses required to sell in your area, if there is any special insurance you need to purchase, and how much tax you must charge.
3. Target Market
We’ve heard it said that if you’re trying to sell to everyone, then you’re selling to no one. Before you start your business, you should define your target market and study this group, so you know how to reach them.
4. The Competition
Studying the competition is an ideal way to plan out your business from the beginning. Who are their customers? What do they charge for their products or services? What are their strengths and weaknesses? What are customers saying? Knowing the competition will help you define your own unique sales proposition – how you stand out from competitors and why customers should choose you instead.
There are many finance-related topics that you should explore before starting your business. This includes:
- Exploring the financial viability of your product or service. Can you make money on this idea? What are your financial projections?
- Researching funding sources. Loans and grants can come from a variety of local and online resources, including the Small Business Association.
- Hiring a good accountant who can help you keep track of finances and give valuable advice.
- Creating a separate business bank account so your business and personal finances are separate.
No one can do it all themselves; even solopreneurs hire out for specific tasks. Before you start your business, evaluate your staffing requirements. Will you be hiring employees? How many? Will you be using freelancers and independent contractors for specific jobs? Where will you find them? It is important that you develop a strong team from the start.
7. Marketing Plan
Marketing is your pathway to sales. If you’re just starting out, you probably won’t have a huge marketing budget, so it’s important to plan your marketing strategy to get the biggest impact for your time and money. Website? Blog? Social media? Advertising? Launch party? Loyalty programs? There are plenty of low-cost marketing strategies to explore before you start out.
These are some of the main things you should know before starting your business. You also should write a solid business plan and never neglect the importance of mentors in building a successful business. Your enthusiasm is great, but you need more than passion to start a business. Planning is a crucial part of the Smart Hustle.