How to Start a Business
So you're thinking about starting a business and although it may seem like a challenging task, the Lewisville Area Chamber of Commerce is here to help! Along with networking events and SCORE, the chamber staff has put together a couple of helpful resources that can assist you in building your entrepreneurial dream. If you have any questions feel free to email us at [email protected]
Research and Planning
Starting a business is a huge commitment and consumes significant time, resources and effort. New business owners should research and plan for the following:
- A unique product or service.
- Development of a strong business plan (SCORE). While a business plan is incredibly important, business owners should not become paralyzed to develop a “perfect” plan as circumstances frequently change with new businesses.
- Securing sufficient capital and cash flow.
- Building an employee team.
- Research which permits, licenses, or registrations your new company will need to conduct business. Possible documents include sales tax license, home based business permits, zone permits, seller’s permit, health department license, and state or federal tax identification.
- Purchase insurance for your business to protect the investment, your staff, and customers from claims.
- When leasing office space, consider the following:
- Length of lease
- Provisions for tenant improvement
- Rent prices and future escalation
- Repairs, improvements and replacements
- Use of a tenant broker
- Prior to taking any concrete action on your new business, ensure that all necessary research has been conducted.
Businesses thrive when they create an in-demand product or exceptional customer service. Differentiate the company’s product or service from competitors. Ensure the market does not possess a good or service similar to the new product. Business owners should bring their product or service to market as soon as it is good, not necessarily great. Customer feedback will fine tune the product or service. After developing your product and gaining initial customer feedback, business owners should consider the best means to protect their product or service. The protection of “intellectual property” can be achieved through a variety of measures including:
- Patents protect a product from others making, using or selling the product without benefit of ownership of the patent.
- Copyrights cover original works like art, music, books, movies and software.
- Trademarks are employed to protect symbolism identified with a company through a slogan, logo or other readily identifiable feature of the business.
- Service Marks are similar to trade marks and apply to services rendered.
- Confidentiality Agreements, or non-disclosure agreements, require employees and former employees to maintain confidence about business products and services.
- Terms of Service and Privacy Policies are similar to usage contracts which define how the product or service may be used by a purchaser to protect the business.
New business development should consider legal needs including:
- Legal formation of the business as a C corporation, S corporation or Limited Liability Corporation. Following formation of the above, always use the corporate name on legal documents and sign all documents accordingly.
- Early on, business founders should clarify legal ownership of the company formally to address equity division, business responsibilities, compensation, decision-making, removal, sales decisions, vision, mission, and goal setting, and other topics of concern.
- Obtain a tax identification number from the Internal Revenue Service. Also known as an Employer Identification Number, the tax identification number is similar to a Social Security number for your new business. Ensure that your business clearly understands taxing requirements.
- Carefully review all business contracts to understand obligations, liabilities, parameters of operation, and responsibilities.
- Consider hiring a startup attorney to assist you with the business process.
Marketing and Sales
Promotional effort focused on the product or service is critical to promote sales and drive profit for the business. Marketing and sales are the lifeblood of any business and may be attained through numerous measures including the following:
- Brainstorm a great name for your product, service and business. Avoid hard to spell names and the name of your competition, and conduct a trademark search.
- Commit the time and effort to create a great website for your company. Review competitor sites, ensure the content on your site is search engine optimized, produce high quality content and make sure the site is visually appealing for users.
- Develop an evolving strategy to drive traffic to the website. Businesses should have a strong social media presence, produce high quality content, and consider online advertisements from companies like Google to promote their business digitally.
- Develop your elevator speech. Craft a strong, enthusiastic, 60 second speech to introduce people to your new product, service or business. The ability to effectively communicate with numerous and diverse audiences is critical for new businesses.
- New business owners should produce an accompanying presentation to share with investors, business partners and customers.
- Enhance your sales ability to build business success. As a new business owner, your ability to sell your product or service is paramount and must be refined.
- Market, market, market! Advertising your business through a number of means—person to person, traditional print, social media, networking and more—will build product and service awareness to interested customers.
Staffing may be the most challenging aspect of your business. Great staff will make you successful, while poor staff members will cost your business. To get your hiring decisions correct, consider the following recommendations:
- Widely post all positions for hire and include an up to date job description for the job.
- Perform a comprehensive background check on all candidates considered for hire.
- Conduct interviews with behavior-based questions focused on how the candidate has performed in past similar circumstances.
- If your business is not yet large enough for full time staff, consider employing consultants or freelancers to assist.
- Employ good offer letters to extend jobs, to clarify roles, set salary, and other critical conditions of employment. Consider using an employment agreement.
- If your business is built around a proprietary product or service, employ confidentiality agreements to protect your company.
- Consider measures to retain good employees including stock options, bonuses, and work-life balance approaches to business.
Gathering funds for a new business is challenging with a range of available options. Once the business makes money, accounting for expenditures, paying vendors, and receiving sales compensation, must be accounted for in an orderly fashion. Owners should consider the following business finance options:
- If the business needs capital, consider seeking a partnership with a venture capitalist or other investors.
- Establish a solid accounting and bookkeeping system so your business always has financial data to drive decision-making. Numerous software systems for accounting and bookkeepig exist and businesses should also consider a trained bookkeeper or certified professional accountant.
- Business owners must understand financial statements and budgets. Expense and income statements are a necessary part of business and understanding cash flow into and out of the business is critical.
- Ensure that your company books and records are correctly maintained so all financial needs are completed.
Satisfied customers are the lifeblood of any new business. Creating a great product or service only becomes effective when an individual or group wishes to purchase the item for consumption.
- Stress great customer service in your company from the start. Word of mouth advertising is extremely effective and satisfied customers are an extremely critical piece of any new company’s success. Customer service research illustrates dissatisfied consumers spread their message far and wide while satisfied consumers share good news at a lesser rate. Successful new businesses work to build satisfied customers.
- Create a customer acquisition strategy for your new business.
- Satisfied customers are your best marketing plan.