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Starting a Business
A Business Is More Than A Job
A business is much more than a job. There’s more to it than just showing up and working hard. In order to succeed, you have to develop skills in areas that are probably new to you. Few of us are good at all of these skills, but you need to learn about them anyway. First, you need to learn what all these skills are, then discover which of them you already know and are good at, and which ones you can learn to be good at. Equally important, you must learn which of them you’ll never be good at, so you’ll know what skills you’ll need to find help with. That help can come in several guises: a partner who has those complementary skills, or people you hire to do specific tasks.
Not taking this first vital step will likely mean your business will fail, and you will join the 80% who never make it to their 5th anniversary.
Don’t worry. Remember. You don’t have to learn this on your own. You have help.
Let’s examine the major areas that you will need to pay attention to:
Record Keeping means keeping track of your sales and expenses, supplies, orders and appointments. It means getting your monthly statement out on time. It means making sure you have enough money set aside to pay your sales taxes, and remembering to get the form in on time.
It’s balancing your check book, raised to the next level.
Accounting is more than record keeping. It uses the information that you collect with record keeping to build reports that shows you how you are doing.
At a minimum you should do a Cash Flow Report before you start so that you can see how long your startup money is likely to last before you need to borrow.
Then, update it every month so you understand how much is coming in and going out, and when your bank balance could go negative. It can also help you plan for a big future purchase or for a seasonal slowdown in business.
Banks and investors may also want to see your Balance Sheet and Income Statement.
Sales skills are needed by all businesses. Yes, even yours. Even if you don’t need a dedicated salesperson, you should know the basics of how to close a sale – the point where you stop talking and wait for your customer’s answer.
This skill also covers being able to present yourself well to customers, bankers, and suppliers.
If you are in retail, then knowing how to present your products most effectively can make a significant difference in monthly sales figures.
Marketing is not the same as Sales. Marketing is how to make the customers aware of you in the first place, then want to try you out, and then want to come back for more.
Marketing includes advertising, packaging, branding, connecting with your customers online, answering the phone with a smile, being the area expert in your industry, being helpful and useful to your customers. Anything and everything that makes your customers smile when they think of your business.
Pricing is an area that confounds many entrepreneurs. You want to charge enough to cover your costs and make a profit, but not so much that it keeps customers away. Knowing when to charge less for some items and more for others is an important part of the game. Wal-Mart does it well. So should you.
For consultants and others who sell their time, it’s more complicated because only a portion of your time is available for sale. The rest is needed for office work, marketing, sales, and for keeping up with the industry.
Legalities don’t usually use up a lot of time, but a mistake can weaken or even destroy your business. Should you be a sole proprietorship, a partnership, or an LLC? What is the difference between “S” and “C” corporations?
If you hire employees, what are your obligations under the law? Is Workman’s Compensation a requirement? What about withholding taxes? Even if you don’t hire others, what do you need to report on yourself?
An accountant can answer some of these questions for you, but did you know that you need to ask about them? What might you be missing?
Funding is always an issue with entrepreneurs. Where can you go for loans, or better, for investments or, the ever popular grants? What do you have to do or know to qualify for any of these?
Supervision will be an issue as soon as you have your first employee or contractor. How good are you at keeping your workers on track and motivated?
Management at this level is a nebulous term. It really means stepping back and taking a look at the big picture, making sure that you are addressing all aspects of your business, and looking forward to see what threats and opportunities loom in the near and far future.
All these factors are addressed in a Business Plan or Feasibility Plan. Some businesspeople will say that it is all in their head and they don’t need to put it down on paper. That may be, but there is something about writing it out that solidifies a plan, making you flesh out the details as you think about each piece in detail.
The very purpose of OzSBI is to help people like you with issues like this. We periodically offer a 12-session class, Operation Jump Start, that teaches most of the above. In addition, we have monthly workshops on specific topics - watch the Events section of this website for details. Perhaps most important is that we offer one-on-one counseling through the Small Business and Technology Development Center located in the OzSBI building and from SCORE volunteers. Or just come in and ask how we can help you.