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Home » Business And Finance Articles » Your Own Business The First Steps

Your Own Business: The First Steps

What an exciting feeling you must be having at this time. You have finally made the choice to "chuck it all" and go into business for yourself. You dream of the freedom from your unreasonable boss and the wonderful feeling of writing your own paycheck. It's a lifelong journey that has to start at the first step â€" the very beginning.

It is my goal to take everything all those books say and boil it down to a real action plan that is a simple as it can be. Basically making it like a recipe. You really don't need all that filler; you just need to know how to get started. A bunch of fluff isn't going to help; in fact it slows you down. Instead of reading, you should be doing!

This section will be those most difficult first steps of just getting started. Effectively launching your business and then growing it for success are their own unique steps in the future. For now, I'll have to assume you have an idea already and have researched it enough to know that it is a good idea and has a bunch of customers clamoring for your product or service. Please be sure you have a good quality product and/or superior service. You are not trying to make a quick buck; you want to have a business that lasts.

I also have to assume that you already have some sort of support network in place, trusted friends, professional advisors like accountants and/or lawyers, and a maybe a mentor with excellent opinions. If you don't have them, you can pick them up along the way. But you'll need them all at some point.

You probably want to know what qualifies me for writing about this. Academically, I have an MBA in Entrepreneurship and Marketing. Professionally, I have been a consultant for many entrepreneurs, I worked at a home business franchise company for several years, and I have a few successful entrepreneurial ventures of my own. I even helped my own family launch a very successful online business, www.ThePashminaStore.com, selling premium pashmina and cashmere products. I'm not a super rich entrepreneur, but I'm successful and happy. My key expertise is online ecommerce, but the following ideas are relevant to starting any type of business.

How to Establish Your Business

This first part is really what most people don't know how to do. It's the fundamental process of actually setting up the business. All the good ideas in the world have to start at the beginning. It's not the fun part, but it has to be done.

It may seem elementary to you, but why haven't you done it yet?

So, let's start from the start.

1) Giving Your Business a Name

Your business' name is important. It is your customers' first impression and your public identity. You probably want to choose a name that is professional, but also may hold some meaning to you and your potential customers. My personal and professional opinion is to not get too elaborate with your name. Make it simple and direct so you don't have to waste a lot of time branding or explaining to your customer just what it is you do or sell.

For example, for my family's business selling pashmina products, we decided to go with The Pashmina Store. There is no question what the business is. Simple and direct...and the URL was available (which is very important).

Most people have a desire to name their business after themselves, using something like their family name, their first name, or their initials. This is a perfectly acceptable; as long as you get the idea across about what it is you are selling. For example, if you are selling raincoats and your name is Smith, you may call your business Smith's Raincoats or even Raincoats by Smith.

Take the time you need to select on a business name that you're happy with, says what you do, and has a good URL for a website. You should run your name choices by your friends and family to gauge their reaction and to get their thoughts.

2) Register Your URL

I know, you just decided on a name and have nothing close to a legal business yet. But I suggest snapping up the best available URL (or web addresses) as soon as you can. In this day and age, your website and the URL will be a large part of you business identity. It will also be the source of your email addresses, so getting a good URL matters. We were lucky enough to get www.thepashminastore.com for the pashmina and cashmere business, I hope you are as fortunate for your venture.

It is best to investigate available URLs even as you decide on a company name. Try to get the URL of your exact business name, or as close as possible. I suggest getting a ".com" rather than ".net" or other since that is what most people know.

You can research names and register at websites such as Register.com and GoDaddy.com. There is a small fee, but it is worth it if you are serious about your business. These two services even will help you inexpensively set up and host a website and email service.

3) Your Business' Legal Organization

Next, you will have to determine what legal structure is best for your new business. Early in a business' life, a sole proprietorship is most common. However, it is beneficial to know the different types of legal business structures before you decide for certain. You'll need to know all about them as you grow, in any event.

You'll most likely want to discuss the options with your accountant and/or attorney as well. To get you started, here are the three most common forms of business.

1. Proprietorship. As mentioned earlier, this is the most popular structure when starting a new small business. It is also the easiest to start. In most states and cities, all it typically requires is a D.B.A. ("doing business as") and a tax ID number, which would likely be your Social Security number.

A proprietorship provides you the maximum amount of control over your business...but it also leaves you the most potential liability. In short, you are personally accountable for your business and all of its debts and legal issues.

2. Partnership. This form of business is common if your business requires you to take on a business partner for expert knowledge or financial needs. A partnership is a legal definition of your business relationship and defines which party is responsible for what aspect of the business venture.

For example, you may be the engineering type who can make the product. Another person may be the talkative type who can sell sand in the desert. Yet another person may be the main financial backer. Whatever your circumstances, a partnership allows you to define each person's part in the business and put it down on paper in a legal manner.

3. Corporation. This is the most official and potentially complicated legal form of business. This is also the most expensive type of business entity, but it does provide everyone involved the least amount of liability.

It is very common to start as a proprietorship or partnership and then change to a corporation after the business is established and growing.

4) Business Registration

Again, most likely you will start as a sole proprietorship. The process is very simple and inexpensive. But the process can vary a bit between states and even cities and counties.

The goal here is to get your business name registered as a D.B.A, or "doing business as". You will need this in most areas to open a business checking account. The fees are typically minimal, but vary on your location. Your County Registrar is most likely to be the office you will need to contact to ask about what the process is to get your D.B.A. The methods will vary by location and in some rare instances you may not even have to register. Just be sure to ask about all of the steps to make sure you're covered.

After you have made some calls or used the Internet to find out the steps in your area, you will most likely need to go fill out paperwork at the government office that handles the registration. The good news is that the paperwork is generally light and the wait is not too long. They or you will be responsible for checking to make sure the DBA name is not already taken, and in many cases you will be able to check on the Internet before you even go.

After the paperwork and name check, you will have to pay a fee, which is generally small. Once it is all done, be sure they give you a notarized copy of your registration as you will need it at the bank to open a business bank account and possibly for other things.

I wish to remind you that what I offer are general guidelines and information to help get you started. It is always a good idea to discuss your options with an accountant or lawyer to determine what is best for you and your individual circumstances.

5) Obtaining a Business Address

This is a step that you can skip if you simply plan to use your home address or an existing business location as your address. But in most cases, you'll start working out of your home and probably wish to protect your privacy and create an aura of having a larger business by getting a new business address.

This process is as simple as going to the post office or a private mail box center (PMB) such as The UPS Store. I suggest a PMB over the post office because you can usually use a street address and list your box number as a "suite" to help create a more positive image versus having your address be a P.O. Box number.

6) Your Business Phone Numbers

Like the business address, you can skip this step if you plan on using an existing phone number. But you should consider adding a second phone number to your home or office to be used just for your new business. You can even get what is called an "overlay" and put a new phone number on top of your existing phone. It will go to the same phone as you have now, and in most cases you can assign a different ring tone so you know it is for the business.

A toll-free number is also an important item to have, but you don't have to have it right out of the gate. But studies show that customers are more likely to contact you if you have a toll-free number. They are not that expensive to set up and the charges are based on usage, so if you use it a lot you should be getting more than enough business to cover the expense.

Remember that you phone voice is important. Talk with a smile â€" the customer can hear that smile. Be sure you have a pleasant and professional sounding message for your voice mail as well. And call back your customers who leave messages as fast as you can. Your competition probably isn't taking care of them fast, so you should.

7) Business Banking Account Formation

Having a separate business banking account is advised since it will help you keep your financial records straight. It will save you a lot of time during tax season to keep your business and personal spending separate. I suggest using a larger bank, such as Bank of America or Wells Fargo, which serves the business community. They will offer a wider range of services and possibly be a good source of business loans to help fund your growth.

You may want to call several banks in your area to compare their small business service options and the associated fees. Once you decide on the right bank for your needs, make sure you know what paperwork to take when you open the account. In most cases they will require at least your notarized D.B.A certificate.

8) Logos, Business Cards, Letterhead and Such

Some people may tell you to invest lots of money upfront to develop a great logo and then put it on expensive letterhead. These people have never started a business on a budget. While you do want to appear professional, you can do just fine with your own computer and printer while you wait to grow big enough to afford such materials.

Most likely your word processing program or other such program already has a letterhead template. That is fine to use for now. Choose a nice font for your new "logo" and use some color for it, if you wish. Do purchase some nice paper to put it on. Then simply print out as needed.

On your letterhead, make sure you get all of your important information across in a professional way. In general, you'll want to include your business name, mailing address, phone number, fax number and email address.

The same goes for business cards and envelopes. You can buy nice envelopes and business card stock and use your existing program templates to create professional materials as needed.

Having a designed logo or company motto on your letterhead is a personal choice. Make sure it looks good and reflects the business. Also make sure it looks good when it is made very big or very small since it will be used in various formats.

The Next Steps

Once you finish Step 8, you're in basic business shape. It is difficult to tell you what to do next since there are so many types of business and different ways to go about it.

In general, you'll need to start letting people know about your business and getting customers. This may mean developing a website that sells products or promotes your services. It can be as simple as handing out business cards to everyone you meet. Or maybe it is "pounding the pavement" and meeting people to tell them what you are doing.

But there are a few things to keep in mind that relate to any business. The Nike slogan has it right when they proclaim "Just Do It." Nobody is coming to you, so you have to reach out to them. And it takes time and effort. Yes, you do have to "work" and "sell" no matter what those advertisements may promise for their wonderful business opportunity.

Here's the "secret" to success: You will have to work harder than your competition, treat your customers better than your competition, offer a better product and or service than your competition, just plain be better than the rest. Yes, that is the secret!

My first job out of college was as an executive recruiter, a headhunter. I was successful at this job. In fact, I was one of the tops in the nation. It wasn't because I was naturally better than anyone else, it was because I worked harder and I worked consistently. Have a plan for the day, the week, the month, the year...and do it consistently. Get into a routine and stick to it. You'll get sidetracked along the way, of course, but keeping your efforts consistent will pay off. You'll make you own "luck."

Since you are your own boss, you do have a little luxury to make a schedule that fits your lifestyle. If you want to start at 10:00 AM, or play golf for lunch, or work late at night, that is fine. But stick to the schedule and make it your routine. This will help you get over the initial feelings of being scared and overwhelmed and start getting you comfortable with your new professional life and on your way to success.

Along the way, you'll start to discover what your strengths and weaknesses are. You don't have to be an expert at anything really; you just have to be average to above-average at a lot of things as an entrepreneur. If there are glaring weaknesses in you business skills, you simply have to work at them. You can read a book, take a class, whatever...but you'll naturally get better each and every day just by doing your business.

Finally, do not get so frustrated in the beginning that you quit before you even get started. Depending on what you start with and what (or who) you already know it is going to take some time. Even minimal success is probably going to take several months and maybe a year or more. Make sure you are mentally and financially ready for at least a year.

If you're not ready now, don't worry. You now know the steps and what to expect to even get started. It is better to take you time and be well-prepared than to rush off and make a mistake that you will regret for years to come.

Launching and growing your business are the essential main steps 2 and 3. But those are whole other beasts that are best discussed at another time. Until then, I wish you the best of luck and hope that your new business is an incredible success.

And here is another random article you might be interested in...

Real Estate Margin Calls

Have you ever heard of a real estate margin call? You know about stock market margin calls. That's when you have bought more stock than you have money and borrowed from your broker to buy extra shares. You bought $10,000 of stock, but only have $5,000 in your account.

It is great as long as the shares continue to advance. If the stock declines by a certain percentage the broker will call you to send in a check to cover the shortage. Hence, a margin call. If you don't send in the money he will sell out your position and you will have a loss which you must pay. Many people send in money and continue to do so if the stock declines.

All professional traders will tell you, "Never meet a margin call. Sell."

In real estate we all (most of us) have that thing called a mortgage. We bought that house on margin. As long as you send in the money every month you may remain in the house.

Today there are many people speculating in real estate as they did in the stock market. Buy something and wait for the market to go up and then sell. Just like buying AT&T stock at $40 and selling it at $100. You could have done that. Today it is around $20.

Condominiums are being bought with a small deposit of five percent or less before the ground is broken. Speculators will sell as soon as the building is completed or before to another speculator and he sells to another speculator until he runs out of greater fools. It has been a speculator's dream and many have made large sums doing it. It's like the kid's game of musical chairs.

Private individuals are re-mortgaging at larger amounts to take out equity to spend on their home, invest in other real estate as a speculator or for other purposes. They are increasing their monthly payments and ARM rates are increasing. This will work as long as the borrower continues to have income. Many count on the incomes of both spouses.

If and when the economy slows down (and it seems to doing that now) it might be difficult or impossible to meet the margin call, make the mortgage payment. History has shown that there are 2 declining economic periods within any 10 year period and there are longer 16 year cycles of good times and poor times.

To maintain the investment in property the mortgagee must keep up the payments. It has been recorded in recent history that when the home values fell below the mortgage amount many folks walked away. That is not allowed any more as the new bankruptcy law does not forgive mortgage obligations. The borrower must repay any loss to the lending institution.

Mortgage payments are like margin calls. Failure to meet the call every month means the loss of your equity. This is a margin call you will want to meet.