How Do I Get Started? Start Your Business With These 10 Steps

Business Start-Up

 

How Do I Get Started? Start Your Business With These 10 Steps

It finally happened. The lightbulb in your head has gone off: “I have a business idea that will change the world!”.

While many of us have been in this situation before, it’s important to not get carried away in the moment. To be a successful entrepreneur and business owner, it is vital to think ahead, develop a business plan, consider a launch strategy, and think about your business trajectory. It’s also important to have a plan for the less glamorous tasks of securing funding, registering with the government, and buying insurance.

This sounds like a lot, and it’s definitely not something to brush over. Here are a few recommended steps to take to ensure that your business venture is set up correctly and can become successful in all stages of the business lifecycle.

Business Plan

1- Solidify your Business Idea and Plan

You have an idea for a business. Now what? In order to make it as successful as possible, you will need to outline the purpose, main goals, and mission of your business. This stage is extremely important, as it will inform a lot of the decisions you make as a business owner.

There are a few key components of every business plan:

  • Executive Summary:  Explain the purpose of your business, what you sell/offer, and a brief overview of the company structure
  • Mission and Vision Statements:  These statements describe your objectives as a company and the desired future position. They should be meaningful, specific, and motivating
  • Situation Analysis: A breakdown of any successful competitors in your industry with insight into their strengths and weaknesses
  • Financial Goals/Objectives:  Explain the benchmarks you want to achieve within the first few years of existence

Once you feel comfortable with your business plan, you’re ready to move forward in financing your business.

2- Securing Business Financing and Funding

You now have a set plan for how to bring your business to life. However, most new business ventures need money up-front to cover things like renting a location, purchasing relevant supplies or equipment, payroll, and more. Being able to estimate your costs at the beginning, especially factoring in additional funds for any unforeseen expenses and challenges, will help you avoid running out of money.

New business owners need to be aware of multiple types of costs in order to optimize their cash flow:

  • One-time vs. ongoing costs: An example of a one-time expense would be purchasing a new pizza oven for a pizzeria. By comparison, ongoing costs could be rent, labor, utilities, etc. which need to be paid out continuously throughout the life of the business.
  • Essential vs. optional costs: Essential costs are expenses that will need to be paid in order for the business to continue to survive and grow, such as labor, insurance, and rent/utilities. Optional costs can be made after essential costs are paid with any remaining money not allocated in the budget. Some optional costs might be capital upgrades, advertising/marketing expenses, or bonuses for employees to encourage retention and raise morale.
  • Fixed vs. variable costs: Fixed costs are expenses that will repeat every month, like rent. Variable costs scale with business output and can be dependent on different factors, such as the processing rates for credit cards or the cost of goods necessary for production.

Knowing how to navigate these costs will greatly benefit you and your business as you move forward in the business lifecycle.

3- Choosing the Right Bank

If you need to borrow money to help start your business, there are many options available to you. Sifting through business loans and trying to entice investors can be stressful, which is why choosing the right bank is so important. Marcus Anwar, co-founder of OhMy Canada, recommends smaller community banks because they are in tune with the local market conditions and will work with you based on your overall business profile and character.

Whether your company requires funds for day-to-day operations, seasonal cash flow, expansion, or other business needs, you can count on your local community bank such as Katahdin Trust for specialized help getting your business off of the ground.

4- Determining your Legal Business Structure

This step will determine what kind of income tax return your business will file every year. There are a few common business structures that are used today. This can be a sole proprietorship, where you own the business by yourself; a partnership, where two or more people share responsibilities; a corporation, where multiple shareholders contribute towards the capital stock; or a Limited Liability Company (LLC).

For help determining what structure would be best for your business, reach out to us at Katahdin Trust today at 1-800-221-2542. We’re happy to help.

5- Register with the Government and IRS

To ensure that your business pays taxes and is officially recognized in your state of operation, you will need to register your business. This will include gathering licenses and permits from your city or county government, as well as other legal documents. For more information on this process, resources from the U.S. Small Business Administration (SBA) are available.

6- Purchase an Insurance Policy

Insurance policies are designed to ensure your financial security should something go wrong during the course of your business operation. These policies fall into a few different categories:

  • General Liability Insurance:  This will protect against financial loss from damage to your property, pending lawsuits, etc.
  • Product Liability Insurance: This insurance policy will help recoup losses from defective or unsafe products
  • Professional Liability Insurance: This will protect against losses from negligence and malpractice
  • Commercial Property Insurance: This protects against damage to company property from natural disasters to vandalism
  • Home-Based Business Insurance: This can be added to homeowner’s insurance for business equipment and any third-party injuries
  • Business Owner’s Policy: This is a combination of all coverage options, which can often save business owners money

Take the time to research the best and most relevant policy for your business based on your perceived risks and business structure.

 Preparing for you Business Start-Up

7- Build your Team and Choose your Vendors

You’re getting there! After you have taken care of your insurance policy, have some funding secured, and are officially recognized by your local government, it’s time to start hiring and building internally!

Job sites like LinkedIn, Indeed, and Glassdoor are easy ways to reach job-seekers in your community. Otherwise, consider targeted advertisements in places that ideal employees are likely to visit– including digital avenues like social media. Make sure to include a brief description of the roles you are hiring for, estimated salary, hours, and any other expectations you have of your prospective employees. Once you have applicants, start looking through and make the right hires!

Choosing the right vendors is also very important for many small businesses. Sarah O’Neill, the VP of HR & Administration for logistics provider humano, believes that this process can be simplified based on four key factors: Cost, Capability, Communication, and Character. If you find a vendor that meets your needs in these four C’s, they’re likely going to be a great fit for your business.

8- Brand, Advertise, and Watch Your Business Grow

To establish and grow your business, branding, and advertising can take your presence to the next level. Coming up with a sleek and easy-to-recognize logo will be helpful in positioning your business against your competitors. Having a strong, consistent presence across your social media and website will do wonders for your business, allowing you to reach potential customers outside of your typical demographic.

Popular apps like TikTok and Instagram have helped many small businesses grow over the last few years by offering an easy way to promote services and share behind-the-scenes content. Many businesses that do not have an internal marketing team opt to hire an outside vendor that specializes in those services. Picking the right advertising agency/partner should come down to the same four C’s listed above: Cost, Capability, Communication, and Character. Make sure to ask for monthly reporting to be able to smartly monitor your digital presence and make any needed changes.

9- Diversifying Your Management

Managing an entire business by yourself is not an easy task, and as your business continues to grow, it might make sense to bring in other trusted professionals for management roles. Depending on the industry and size of your business, this could include hiring a marketing/sales director, operations director, accountants, and other important positions to take responsibilities off of your shoulders.

In order to make the right hiring decisions, you will need to ensure that these people understand the mission and vision of your business. Someone who doesn’t get the “why” of your business and is just looking for a paycheck won’t be a good fit. Chemistry is another factor you will need to consider. Could you see yourself working alongside these new managers effectively, even in times when there are disagreements? Additionally, in the scenario where you decide to step away completely from the business in the future, would you trust them to take over control of your business?

Even though these seem like straightforward questions, they will help you surround yourself with the right people.

 We are open

10- It’s Time to Get Started

Now that you have a better understanding of the business creation process, it’s important to get started by connecting with your local bank. Banks like Katahdin Trust can help you get financially ready to reach out to investors, select the right business loan, and offer guidance and clarification. When you bank locally, you'll always have a team of professionals ready to assist you with your personal and business banking needs.

We have locations all over Maine, from Scarborough to Fort Kent, so that Maine entrepreneurs can feel supported and educated when it comes time to launch their business.

Reach out to us today and get started on launching your Maine business with the help of our dedicated team.

Katahdin Trust Company. All loans are subject to credit approval. Member FDIC. Equal Housing Lender.

 

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