Starting a Business?
You’ve been thinking about starting your own business but you just can’t seem to take the first step. It may be because you don’t know or maybe you’re afraid of something. It could be a little of both, fear and not knowing what to do. Starting a business isn’t a one step process but it is easier than you think. You could already be doing it without really knowing it. You may have wanted to start a business making pies because your pies are the best. People around the office are always asking you to bake one for them because they just can’t get enough. And you do, you bake several, collect your fees and continue working your 9-5. Knock, knock, you’re already in business! Just concentrate on putting a plan in motion and take it one step at a time.
First though, I’d like to give you some friendly advice on starting your business:
Be prepared for rejection
You will hear a lot of no’s during your starting phase. There will be so-called friends trying to bring you down because there is a pie factory right down the street. Do not, I repeat Do not let this discourage you. Acknowledge their comments, step around them, and continue. Just remember to say hi from the top!
If you fall, get right back up
There will be times where you will feel like the whole world is against you. Where you can’t make a sale for the life of you but at this point it is KEY to continue plowing through. It only takes one small break to make it big. If you stop when you fall, you are limiting yourself to finding out what really lays ahead; what your potential truly is.
If someone is already doing it, do it better
Just because there’s a pie factory down the street doesn’t mean you can’t start your own successful homemade pie business right next door; just do it better! Offer something unique, you’re already baking homemade pies, I’m sure you can think of something.
Just do it!
Yes, Nike said it first but it applies to all! What’s keeping you from just doing it? Fear… fear is our own worst enemy. No, let me clarify; WE are our own worst enemy. We allow fear to take over and paralyze us to the point of no return. Why? Because we are constantly second guessing ourselves. We sabotage our own beliefs and start thinking that we just can’t do it. Then we stop. Put those thoughts out of your mind and focus on just doing it! Some of the wealthiest men and women out there live by this rule and so should you! Now, what’s stopping you?
So now on to what you need to do to start a business:
Clearly define your idea or product
This is where a business plan comes. It doesn’t have to be too elaborate or over 100 pages. It just has to be clear. Start off by defining your business name, objectives, and goals.
What will the name of your business be: Pie Bakers Inc.
What your business will do: Pie Bakers Inc. will bake homemade pies and desserts. We will only use organic ingredients to ensure the quality of our pies.
What will your business accomplish and when: Pie Bakers Inc. will produce 100 pies a week for the first year and increase by 5% each year.
How you will gain customers: Pie Bakers Inc. will go door to door seeking customers that do not have the time or energy to bake homemade pies.
Your business plan is a living document. You will need to change it as your business grows. This is where you will look to for help if you feel you’re straying away from your original idea. It will also help you get the financial assistance you need from banking institutions because they will rely on your plan to help them decide how much to give you.
By the time you have your business plan ready, you should have figured out your business structure. This is very important because it will define how you pay taxes, employees, etc. The most common structure for a one owner business is a sole proprietor. But this may not be the best option. It is important to review the alternatives a sole proprietor has to legally register his/her business so that they are able to better deal with the liabilities any structure brings with it. Depending on what structure you choose, you will have to register your business with your state. Registering certain structures incurs fees. For example, in Texas corporations, limited liability partnerships, and limited liability corporations each pay a $300 fee to register; check your state’s website for exact fees.
A sole proprietor only pays $14 to register with the county clerk’s office. Once your business is registered you will have to apply for a sales tax permit with your state (check your state’s website). This will help you avoid having to pay sales tax twice, once when you buy your materials and again when you pay your state taxes.
Once you’ve chosen your structure, it is important to request an Employer Tax Identification Number from the Internal Revenue Service, any business that sells a product or service must have one. The ETIN is used to identify your business by entities such as Federal, State, Local, and other agencies the regulate businesses. These numbers are free, you DO NOT need to pay to get one; simply request one by completing the online form on the irs.gov page. Certain types of businesses require licenses. For instance if you are opening up a restaurant you must have food handling permits, pre-opening inspections, and require all employees to obtain an individual license to handle food as well. Check your local and state licensing facilities for specific information pertaining to your business.
I cannot emphasize this enough! Keeping track of your income and expenses as you incur them will save you many headaches come tax time. Depending on your business structure there are certain tax regulations you must abide by in addition to your government taxes. As you are trying to decide what type of business structure you will adopt, you should also be looking at the different tax obligations each structure demands. Keeping track of your business shouldn’t be a tedious task. If you set it up correctly at the beginning and you take some time to enter all of your receipts and invoices; this should be a breeze. The most common accounting software is Quickbooks. By no means am I promoting any of the brands I write about. They are simply stated here because I have tried them and I feel they may help you better manage your business. With that said, Quickbooks is the most popular by far BUT it is not the only one. If you are starting a new business the first thing you DON’T want to do is spend hundreds of dollars on an accounting system that is somewhat difficult to learn (very good but difficult to learn); nor do you want to spend the time of getting to know it just enough to effectively manage your business. There are plenty of free, yes, free accounting software programs out there. I’ve tried a few but have come to the realization that, I don’t want to spend a day and a half a) learning a new system and b) entering receipts and trying to figure out if they are right or wrong.
Just recently I found one that is very easy to understand, simple to use, and offers free support. Oh, and did I mention it was free? It is! When I signed up for this cloud (online – no need to download a program and accessible anywhere you are!) based program I thought I was going to review it then delete my account as I had done with so many others. I was surprised at how easy it was to handle so I stayed. It was extremely easy to add invoices, expenses, and even link my business bank account to it so I didn’t have to spend too much time on reconciliation. Within 10 minutes I was able to enter all of my invoices and expenses and see just how much my business was really working! The best part is that it comes with the ability to send your invoices via e-mail AND the system tells you if the vendor actually saw your invoice or not! No more “I didn’t get your invoice, can you send it again!” The program is called Wave Accounting and is super easy to use, check out their tutorials! Like Wave Accounting, there are plenty of free accounting programs out there that you can use to help you manage your business more effectively. This one just happens to be one I use and really like.