So, you’ve made the decision to start your own business? Great news! That’s already half the battle in the war to achieve professional (and sometimes personal) freedom. What comes next? Probably an “OMG what do I do next?” moment (or 20). Don’t worry, that’s to be expected. You just took a major chance, but you’re not alone. In fact, according to the Small Business Administration, there are more than 23 million small businesses in the United States, providing more than 55 percent of all jobs in the workforce.
The small business sector is continuing to grow, and while corporate America still continues to reduce its workforce, the rate of small business “startups” has increased. It’s also good news that the rate of small business failures has declined over the years. So hold your head high, be proud of yourself for taking the chance, and get to work building your dreams! Having spent the last two months launching a brand new small business myself, I just might be able to save you a few steps, or at least point you in the right direction of how to make your start up process a little less cumbersome.
Make a checklist
Any new business should generally start with a solid business plan. But, depending on your circumstances, how quickly things happened for you and what kind of business you’re starting – a full business plan may not even have been considered yet, much less finalized. That’s OK; don’t get overwhelmed by the thought of putting together a major plan for your startup business. Start small – make a checklist of all of the things you think need to do to get your business going, and begin making your way through it a little at a time. Some key things to consider right away include:
- Equipment needs
- Office/retail space lease
- Bank account, business checks, credit card for company use
- Business cards, website, marketing materials
- Staffing plans, payroll, benefits
- Accounting, invoicing, taxes
Get your finances in order
Be sure to separate your personal finances from those of the business. No matter how innocuous it may seem to “comingle” your money, not separating business from personal can end up being a real headache later for you or your accountant. Not only will it be difficult to truly assess what your financial situation is as your business grows, but you run the risk of an audit down the line. It’s simple: open a company bank account, use one credit card to track all of your business expenses, and keep all of your receipts (be sure to mark on them what they are for). Look for a bank that doesn’t charge a lot in fees (or offers ways to waive them) and where you’ll feel comfortable. I recommend looking into a smaller, local community bank. It’s nice when you walk in and they remember your name, this personal contact goes a long way in easing the stress. You can always upgrade later if they don’t offer the services you need as your business grows.
Another way to improve your odds of business success is to really understand what your financing needs are from the beginning, as well as the options that will be available to you. Be sure to visit SBA.gov where there’s a wealth of information about estimated start up costs, what impacts business finances will have on your personal finances, and how to find out if you qualify for a small business loan. Even if you don’t need to apply for one now, it’s good to know what your options are for later.
Hire a professional
Starting a new business doesn’t mean you have to, or should, do everything yourself. Even when you’re working on a limited budget, it might be smarter and more efficient for you to hire a few key professionals to help you get your business off the ground. The more time you spend blindly navigating through things related to starting a business that you simply don’t know about, or don’t understand, the more time you’ll spend away from doing the things you’re good at and that can truly help your business – building relationships, meeting new clients/customers and developing the strategy for the growth of your business. Plus, hiring an expert to help you set up various aspects of your business could save you a lot of hassle later. Your time is more valuable than ever now, so plan to invest some money and hire some help early. A few key consultants who can make your first few months much easier include:
Attorney: If you haven’t sought the advice of an attorney, you should consider it. While it may seem like an expensive startup cost, it can end up saving you a lot of money in the long run. An attorney who specializes in small businesses can help direct you on things such as required business licenses and permits, and what kind of business structure you should establish (sole proprietor, partnership, corporation, etc.) Do you need any specialized insurance, such as Errors & Omissions Insurance? Are you at any legal risk for any other reason you may not have previously considered?
CPA: If you’ve never seen an income statement, think a balance sheet has something to do with a well made bed or have only ever used Turbo Tax to do your own taxes– then you should get some help from an accountant, better yet – a California licensed CPA. Tax laws are confusing enough for employees. Becoming an employer adds a whole new level of complexity to your tax situation. Hiring a trustworthy, reputable CPA can help you navigate tricky tax requirements, make it easier to identify tax-savings and help protect you from making a mistake that could result in an audit (or at the very least, help you through one if it happens).
Commercial real estate broker: Looking for office space or commercial retail space can be an exhausting experience. What’s the “going rate” for the space you need? Should you ask for tenant improvements, or take the space as is? How long of a lease should you sign? These are all things that a broker can help you with, and it doesn’t cost you a dime to hire one (their fees are covered by the owners of the space you rent). Before I opened my own company, I was responsible for identifying and negotiating four different leases for my previous employer, and for three of them I used a broker. Knowing that I had someone looking out for my best interest gave me peace of mind, and let me focus on the bigger picture. And now – well, I’m using that same broker again to find space for my new company, too.
There’s a lot that goes into starting a new business. With some organization, focus and purpose, getting off on the right small business startup foot might be labor intensive, but it doesn’t have to be unbearable. Stick to it and keep looking forward because as a new small business, every day is an adventure.