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How to Start a Business in 10 Steps

A little less than two-thirds of Americans want to start their own business. Perhaps surprisingly, this is true among both younger and older workers. Like the drive to write a book ( 81% of Americans) or work as a full time freelancer (soon to be half of all workers), starting your own business is a widely shared dream.

For good reason. People who work for themselves tend to love it. Although it comes with the complexity of having to manage every piece of an operation, as well as the stress of knowing that success rides completely on your own shoulders, there’s nothing quite like being your own boss.

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It’s also very possible. Here’s how.

1. Research Your Market

This guide will assume that you already know what your business will do. If not, we have an excellent guide to coming up with your small business idea here.

Once you have your idea set, you need to do your research.

Starting your business will inevitably be a learning experience, but you want to get as much information as you can beforehand. So take some time to study your planned market. Ask questions like:

• What kind of competition will you face?

• Who is your target consumer?

• Where will you locate your business?

• What are the logistical and practical concerns about that location?

• What do consumers like and dislike about the existing market for your product?

• What do consumers say they want right now?

• What kind of spending power does your target consumer have?

Your market will be different depending on the nature of your business venture. A corner store has entirely different demographics and challenges than a web-based service vendor. In both cases, though, it pays to know your audience. Literally.

2. Write a Business Plan

The business plan is the blueprint for your company. It’s where you’ll apply your research and planning into one document that describes in detail the who, what, when, where, how and why of your new business. In it you will address issues such as:

• Who you will market to;

• What you plan to sell;

• When you anticipate hitting certain benchmarks, your timeline for development;

• Where you will locate this business, whether online or brick and mortar;

• How you will operate this business day-to-day;

• Why this business, what opportunity did you see in the market.

Your business plan should also address critical issues such as:

• Monetization and cash flow. How do you anticipate making your money and turning a profit?

• How much will it cost to run this business? Don’t miss the details.

• When do you expect to become profitable?

• Specific challenges you anticipate and how you will overcome them.

• What will it take, step by step, to operate this business and create this product?

The business plan article linked above goes into more detail, and the Small Business Association has a template here. Both are worth reading in further detail, because starting a business without a business plan is like setting off on a road trip without a map or GPS.

And, of course, don’t forget to pick a terrific name.

3. Get Feedback

Now stop.

Writing your business plan should be exhausting. This should be a detail-oriented document that takes a hard look at your planned venture and how, precisely, it will work. If you’ve done it right, by now you should be ready to tear into the building phase of your new business.

Instead, take a step back and solicit feedback. Call friends, family and colleagues who might have some knowledge of the industry you’d like to enter. Seek out mentors or professional guidance if possible. Get their opinion of your business plan. They might have questions you didn’t think of or notice something that slipped by you.

Hopefully this business will be around for years to come. You can afford a small delay while you get a few more eyes on your proposal.

4. Find the Money

Cards on the table, this is the hardest part for most entrepreneurs.

Not every business needs a lot of startup capital, but you will almost certainly need some. How much will depend a lot on what you want to do. A web-based services firm might require very little in the way of funding, while a retail store can require a substantial amount of cash to pay for rent, inventory and staff.

Regardless of how much, now is when you need to find this money.

This is something every entrepreneur faces, and small business owners turn to a variety of sources for startup capital. No matter where you get funding, expect to invest at least some of your own money. Lenders and investors will want to see that you have “skin in the game,” to use industry speak. Beyond your personal accounts, called self-funding, small business owners also rely on:

Bank Loans

Many businesses start with a small business loan from local banks.

You will need to have all of your paperwork in order to pursue a loan. Expect the institution to ask for details from your business plan, including monetization strategy and financial projections. If you have trouble securing a loan, you can turn to the Small Business Association which runs a loan guarantee program to help make this type of financing more accessible.

Personal Loans

While not an option for every entrepreneur, many people do rely on loans from family and friends.

If possible this is typically better than securing a loan through the bank. You’ll likely pay little interest and will have more generous terms in case of default. However, it also depends on knowing people who have that kind of cash lying around.

Grants

While not lavishly funded, programs such as Grants.gov operate small business grants for entrepreneurs.

Investment

Professional investors typically look for potentially large-growth business opportunities. Depending on the nature of your intended company, this could be a good fit for you.

A venture capital firm is unlikely to sink money into a small legal practice or restaurant. These tend to be low-growth relative to the returns that they seek. However, someone looking to launch a new product or web-enabled service, something with high potential scalability, might be a good fit for the private investment model.

Local angel investors, such as those found through AngelList, are more likely to invest in a regionally focused business. While beyond the scope of this article, you can learn more about finding private investors here.

Crowdfunding

Crowdfunding has become an increasingly common source of startup capital for small businesses. This model tends to reward retail style projects (someone looking to create a specific thing that catches the public’s eye). It can also be an excellent way to hone your sales pitch to a general audience.

For more information on financing, the SBA has a comprehensive information sheet on common sources of funding here.

5. Choose a Location

Where you locate may determine some of your legal obligations and paperwork, so it’s best to get that done at this step.

As much as possible you should try and do this with specificity. While you’re not ready to sign a lease just yet, the closer you can come to a specific address the better. Meanwhile, if you’ll be starting this company online, now’s the time to pick up your domain if you haven’t already.

Pay attention to local laws! We cannot overemphasize this. The best location can be killed off by a zoning ordinance that makes your business illegal on that particular street corner. Municipal laws can be petty and confusing, so make absolutely sure your business is street legal.

6. Establish Legal and Tax Structures

If at all possible, at this step you should retain the services of a lawyer and/or accountant. You will absolutely want professional advice. Otherwise, you run the risk of missing details that come back to bite you down the road. We also must note that nothing here constitutes legal advice. This is just a general primer on what you need to know.

Now is when you’ll actually begin forming your business and filling out the necessary paperwork with federal, state and local governments. This can involve (but is not limited to):

Choosing Your Corporate Structure

There are many types of businesses you can form, including LLCs, S-Corporations, partnerships, sole proprietorships and more. Those listed here are the most common corporate forms for a small business. The right one for you will depend on issues like cash flow, number of participants and how you want to structure potential liability. You can read more about this issue here and here.

Register Your Business

How you have to register, and with who, will depend on your specific corporate form. However, if you have formed a corporation of some sort you will have to file articles of incorporation to create this legal structure. For more information on registering your business, see this resource.

Register With State and Federal Tax Agencies

You will need a tax number and may need an employer ID number. The SBA has a guide to finding and filling out your appropriate tax forms here.

Determine Any Licenses and Permits That You Need

Depending on the nature of your business, you may need a license to operate. The SBA has a database of federal and state licensing requirements here.

Be certain to also look up zoning and location-based regulations. You may need additional permits based on where you’ve chosen to operate your business. These are typically a city-level concern.

7. Open Bank Accounts and Sign Leases

Once your business has been properly formed you can begin to act in its name. Now is when you can start actually executing on many of the opportunities you’ve already lined up.

Open bank accounts in your new business’ name. Take out a corporate credit card and, if your bank offers it, work to pre-establish a line of credit. You will find this easier to do now that your company exists and has established funding, although it may not become an option until you have operated for some time.

Go out and actually get the funding you secured earlier, because now you have someplace to put it. You should have already gotten the “yes” by now from someone, but you don’t want to deposit corporate seed money into your personal checking account. This may technically constitute a felony that rhymes with “schmembezzlement,” and is poor form either way.

With the money in hand and a functional checkbook, now is when you sign the necessary leases on real estate.

8. Take Care of Little Details

Once again step back and take stock, because the best ideas can be broken by the smallest details.

Make sure your business has comprehensive insurance for issues ranging from fire to property damage and legal liability. Many business owners overlook that last issue, and it can be a career killer if someone slips and falls or even just decides they don’t like you.

If you will hire employees put a documented process in place for hiring and firing. Have your workers compensation and unemployment insurance paperwork filed and in order.

If you haven’t already, talk to both a lawyer and an accountant. This is especially critical if you will employ people. Even if you don’t formally retain an attorney, buy a few hours of an employment lawyer’s time to make sure you have your bases covered. Figure out how your business will do its accounting and have that system set up and operational, whether you’ll do it yourself or have hired a professional.

9. Start Making Things

Now, at long, exhaustive last, we get to the fun part. It’s time to start actually making things.

You have the money, you have the location. You have all of your paperwork filed and are legally bulletproof. Now begin making your product.

How you do this will, obviously, depend entirely on what you specifically do. A manufacturing company will need to source suppliers for raw materials and the necessary machinery. (Because you took our advice and checked out all the local laws you won’t need to worry about any noise complaints from the neighbors.) A retailer will source vendors and set up an inviting, fun storefront. A consultant will finish making her office look tasteful and professional.

A restaurateur should stock the kitchen, buy appliances and write out a menu.

The details of getting to work depend entirely on your industry and profession. Fortunately, you’ve got a well written business plan for figuring out what those details are. Whatever you do, though, now’s the time to start actually doing it.

10. Scale and Hire

Your business is operational. Now’s the time to think about how to keep the lights on.

Some businesses will require employees from the very beginning. A cafe, for example, is almost impossible to run alone. Those employees are part of your startup costs and will be with you from the very beginning. As your business grows you may have the luxury of hiring more people to take some of the work off your plate.

Now is also the time to begin marketing.

To be fair, this is something you should be considering all along. You should always think about how to get your business’ name out into the community. Don’t let up once the doors open. Look to social media, advertising, foot traffic and local networking to get people in. Talk with other businesses in the area about collaboration efforts.

This is where you get to be creative. This is the fun part of being an entrepreneur. If you’re at step 10 you’ve earned it. So enjoy, because this is your business.

Source: How to Start a Business in 10 Steps – TheStreet

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You’d Be Better Off Just Blowing Your Money: Why Retirement Planning Is Doomed

Between interest rates and poor financial planning, the comfy retirement you may have dreamed of is most likely to remain a dream.

I know this is a bold, and possibly controversial title, but retirement planning is broken and leaving people broke.

The destructive narrative is, “work hard, save money in a retirement plan, wait and it will all work out in the long run.”

The reality is, without the ingredients of responsibility and accountability, there is no easy solution for retirement. Meaning, if we just work hard and set money aside, we are putting money into a market we have no control over.

The institutions are winning though. Taking fees along the way. Convincing us to separate ourselves from our hard earned money, encouraging us to take it out of the business we know and put it into investments we don’t.

Low interest rates are great for those borrowing money, but terrible for those wanting to take income from a retirement plan. Those low interest rates are not providing enough cash flow, so that even if you’re a millionaire on paper, you still may be living like a pauper. For example, if you could find 4% interest in a fixed income account, that is only 40,000 dollars a year per million in your retirement account. Oh, and that income is taxable if it isn’t coming from a Roth IRA.

The concept of retirement has robbed the public of the responsibility and accountability required with personal finance. It has become too easy to hand money over to so-called experts due to the busyness of business, kids, hobbies, and other obligations competing for our time.

The reality is, we have more opportunity for time now than ever. For thousands of years people were limited and constrained with the monumental duty of providing for their family by having to hunt, farm or provide shelter with less technology, efficiency and access to resources. We have become addicted to saying yes to things less important than financial stability and freedom…..

Source: https://www.forbes.com/sites/garrettgunderson/2019/07/16/youd-be-better-off-just-blowing-your-money-why-retirement-planning-is-doomed/#18c0d351302d

This Hedge Fund Superstar Thinks Climate Change Will Impact All Your Investments—And Soon

Robert-Gibbins-by-Levon-Biss-for-Forbes

Since November, Robert Gibbins has crisscrossed the globe attending scientific conferences, traveling from his home in Geneva, Switzerland, to Arizona, Spain and Austria. The events had a common theme—climate change—and were well attended by academics, bureaucrats and politicians. One group was conspicuously absent. “I didn’t see any other investors there,” he says.

That boggles his mind. “Climate change is something we have to include in every single analysis, every investment,” he says. Most people think—or hope—that global warming is something their children or grandchildren will have to reckon with. Gibbins disagrees. The 49-year-old founder of Autonomy Capital ($5.5 billion in assets) thinks that climate change is happening suddenly and soon.

He structures every bet his hedge fund makes around his belief that the world is skidding toward a future that’s overheated and underwater—and that carbon will be treated as a costly waste product that needs to be captured and stored. Gibbins has already made good money betting on European carbon-futures contracts and expects richer plays to come.

Gibbins has an impressive track record making big calls. His fund, which places large bets on sweeping economic and political trends, is an industry standout, returning an annualized 12.85% net of fees since its November 2003 inception, compared to 8.9% for the S&P 500 index.

The ski-happy, outdoors-loving son of a Vancouver real estate agent, Gibbins made stops at the University of Pennsylvania and the trading desks of JPMorgan and Lehman Brothers before starting Autonomy. For many countries, he believes, climate change will be a major stress on economic stability. If a country is a basket case now, it’s only going to get worse as the seas keep rising and other fast-paced changes hit. “It’s not enough anymore to create a cheap T-shirt, car or semiconductor,” he says. To that end, Gibbins recently shorted the debt and currencies of Turkey and South Africa. He views both countries’ governments—led by Recep Tayyip Erdogan in Turkey and the ANC party in South Africa—as totally inept. “You can choose to be ruled by the ANC or Erdogan, or you can be a modern industrial economy,” he says. “You can’t have both.”

By contrast, he’s going long on Argentina. On recent trips there, Gibbins found people were exhausted after a decade of economic hardship and failed policies, convincing him the country won’t return populist Cristina Fernández de Kirchner to power (she last held the presidency in December 2015). The country’s debt is priced for disaster. “My view is, in Argentina, the society has had enough. It doesn’t want policies that are designed for the next three days,” Gibbins says.

As he sees it, all sophisticated investors these days have access to the best government and economic data. He travels 150 days a year in the pursuit of an edge and expects the 24 investment pros and economists working for him to do the same. He meets with local bureaucrats, journalists and business executives to gauge how decisions are made and how well local institutions function—and whether they can handle chal­lenges like climate change.

What about individual stocks? One obvious thought is to avoid property insurers like AllState and Travelers, which seem likely to get clobbered by rising costs, paying out more as weather-related damage piles up. Gibbins doesn’t buy it. He thinks insurers could fare just fine because much of their business is writing coverage for short periods, giving them the chance to reprice their products. Gibbins says REITs have a lot more risk.

You want even more against-the-grain thinking? Despite President Trump’s decision to pull out of the Paris climate accord, Gibbins anticipates the U.S. will eventually take the lead with Europe on a global deal to limit carbon emissions and penalize countries that don’t comply. So Gibbins thinks big oil stocks, like Exxon, or the currencies of oil-addicted nations, like Nigeria, are vulnerable.

I am a senior editor at Forbes who likes digging into Wall Street, hedge funds and private equity firms, looking for both the good and the bad.

Source: This Hedge Fund Superstar Thinks Climate Change Will Impact All Your Investments—And Soon

He Sold His First Business To Google And Just Raised $120 Million For His Next Startup

Ray Reddy

Ray Reddy has raised millions of dollars in startup funds, sold a company to Google and is taking on the local business gauntlet in an innovative new way. Yet, he chose to exit Google and Silicon Valley to launch his latest venture.

In his exclusive interview on the DealMakers Podcast, Ray Reddy shared the pros and cons of the valley and his fundraising strategies.

The Art of Business

Always curious, Ray wondered if business was like math and science.  He attended the University of Waterloo to study computer science, then a Masters of Business and Entrepreneurship and Technology.

He says he learned some good foundational principles, how to approach complicated problems, and how to learn quickly. Yet, when entering the business world he found that very little of what he learned had any practical knowledge of applicability. He says “it’s much more about common sense and experience than it is about definitive approaches and how to solve some of these problems.”

After school he went straight into corporate strategy at BlackBerry, doing M&A and venture investments. Yet, he has always not only had a lifelong craving for learning, but a passion for building something and building something that he found had a purpose.

What Google Gets about M&A

The mobile phone was starting to consume other portable electronics. It quickly began to absorb portable navigation, portable GPS, handheld units, and portable media players. Yet, no one seemed to be addressing it. Ray Reddy decided to go solve it himself and built a team of people to go after it.

That startup became PushLife.

Prior to the iPhone, they focused on building an experience that made it very easy for people to move content back and forth between their phone and their computers, specifically music. It took normal phones, and it gave them an iPod-like experience on Android, BlackBerry, and Nokia. PushLife ended up licensing software to major carriers.

It was so successful it was acquired by Google. After the acquisition, he was at Google for four years. First in the Canadian Google office in Waterloo. Then out in Mountain View at Google‘s headquarters.

He ended up running the mobile commerce team for one of their products. Then towards the end, Ray was actually part of the launch team for Google Shopping Express, which was their same-day delivery effort in retail.

The difference with companies like Google, according to Ray, is that they do hundreds of acquisitions a year. They really turn it into a mass production factory. It’s very organized. There are no games. They are very straight-up. From Ray‘s perspective, it doesn’t feel like anyone is trying to overly optimize a negotiation. It makes a lot of sense because the transaction is the beginning of the relationship.

Ray‘s opinion is that Google‘s M&A process is designed in a way to get a group of people that are energized and that deliver a lot of value over the upcoming years. Contrast that with some other acquisition approaches and the result is quite different.

Eventually, Ray found a big new problem to solve. He ultimately concluded that structurally, a big company wasn’t set up to solve this problem, even with all the resources a company like Google has.

Toronto vs. The Valley

Ray moved his founding team to Toronto. Not that the Valley isn’t a really interesting place. He says “On one hand, it is the capital of technology worldwide, but I think there’s also some really weird dynamics there.” The biggest one being that you’ve got a very high concentration of very wealthy people, and they’re all early adopters.

He points to the collapse of the entire on-demand space, everything from on-demand valets to cleaning services several years ago, and a massive false-positive from the Valley.

Because when you have places like Palo Alto where average household incomes are north of $2 million, you can fool yourself into thinking that there are enough people who will pay a big premium for convenience.

As Ray states, “the types of investors living in the Valley are not at all sensitive to paying a $10 delivery fee for having a $10 item brought to them.“ That doesn’t seem weird to them. When you look across average neighborhoods and cities in North America, that’s not necessarily true. You lose sight of that in the Valley. You lose sight of the average person.

Ray says “So, if you’re trying to build a mass market consumer product, you just have to be very careful of false-positives that can come from something working in the Valley“

Then the team went and looked at the reality of building talent there, and hiring, and cost, and a lot of those other things. They decided to move to Toronto instead.

Fundraising Strategy

Ray’s latest startup is Ritual which is a social ordering app that taps into networks of co-workers and colleagues for fast and easy pick-up and pay at a wide variety of local restaurants and coffee shops.

He has already raised $120 million in capital. Greylock led the Series A out of the Valley. Insight did the Series B out of New York. Georgian Partners led the C round out of Toronto.

Rather than waiting until funds are imminently needed to close a round, he says “I think about it differently which is you should always be talking to investors. Always having an ongoing conversation with investors.”

He’s always talking to the next stage of investors and trying to build that relationship. Fundraising comes down to trust, and do they trust your judgment? Do they trust that you can do what you say you’re going to do?

For Ritual, it’s never been about the investor that gives the highest valuation. It has been about who do you want to work with and who do you want to build this company with and spend time with.

He’s had a relationship with each one of those investors for about 9 to 12 months before the round. When it came time for fundraising, it was a no-brainer each time.

Today Ritual has a team of about 300 people globally.

Listen in to the full podcast episode to find out more, including:

  • The process of selling your company to Google
  • Benefits of launching in cities outside of Silicon Valley
  • Ways to build relationships with investors
  • Success factors behind marketplaces
  • Retention as the critical factor for ultimate success in business

Alejandro Cremades is a serial entrepreneur and author of best-seller The Art of Startup Fundraising, a book that offers a step-by-step guide to today‘s way of raising money for entrepreneurs.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley

Source: He Sold His First Business To Google And Just Raised $120 Million For His Next Startup

Where You Want To Be: The Meaning Of Mentorship

Slightly more than a decade ago, I welcomed my second child into the world, while waiting to hear if I had been selected into a dermatology residency program. After five grueling years at the country’s top medical school—while raising two babies, and continuing to accrue debt—I was more than eager to start my life as an actual doctor. Today, I am a board-certified dermatologist and dermatologic surgeon specializing in hair restoration, ethnic skin care, and skin cancer surgery in Kansas City and New York City. The immense amount of unwavering determination and hard work that was necessary to arrive at this point in my career cannot be understated…….

Source: Where You Want To Be: The Meaning Of Mentorship

Meet The Billionaire Who Defied Amazon And Built Wish, The World’s Most-Downloaded E-Commerce App

On a sun-filled San Francisco afternoon, Peter Szulczewski is climbing the stairs to the top of a Sansome Street skyscraper, past floors filled with Wish data scientists and engineers, pool tables and DJ equipment. Large windows give way to a stunning view of the city. But most of Szulczewski’s customers don’t work in offices like this or live in Northern California coastal enclaves. In fact, most of them don’t have much money at all. Wish’s customers are typically working-class Americans from places like the Florida Panhandle or East Texas, Dollar Store shoppers who find Amazon Prime’s $120 annual membership too rich for their blood……..

Source: Meet The Billionaire Who Defied Amazon And Built Wish, The World’s Most-Downloaded E-Commerce App

The Business Case for Positive Company Culture

Carin Taylor, chief diversity officer at Workday, shared some of the results during a Business Leader Forum at the most recent Workday Rising. Nearly 40 percent of all respondents indicated that unfairness or mistreatment played a major role in their decision to leave a company; 30 percent of women of color felt they had been passed up for a promotion; and a large percentage of Asian and Caucasian men and women felt they were treated unfairly by leadership and management…………

Source: The Business Case for Positive Company Culture

11 Websites That Will Make You Smarter About Money

Not everyone has a financial adviser, and not everyone has the time to read a personal finance book. Luckily, there’s the internet. We’ve made learning about money easier for you by compiling a list of some of our go-to websites for money advice……..

Source: 11 Websites That Will Make You Smarter About Money

Take Control Of Your Life

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Life is full of ups and downs. What’s important is you do not know how to give up. Instead, you try to see the bright side of light and perceive life in a positive way. You have to understand that your perception about life has a great impact in your well-being and health.Being positive will help you eliminate negative self-talk and take control of your life. You will be able to see life with all the possibilities instead of the obstacles and worries that it offers. Let this program provides you with everything that you need to learn about being positive.This powerful tool will provide you with everything you need to know to be a success and achieve your goal of positive thinking to a successful place. With this product, and it’s great information on being positive it will walk you, step by step, through the exact process we developed to help people get all the info they need to be a success.

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