BEFORE STARTING A BUSINESS: PART II
by F. Kenneth Taylor
Welcome to the second installment of, “Before Starting A Business.” Before we continue, and for those who may not have review Part One, let’s do a brief recap. Here’s what we discussed;
- “Entrepreneurial Drive” – You need more than ‘desire’ to start a business
- Type of Business – Knowing the best business for YOU to start?
- Research – Researching EVERYTHING about the type of business you’ll start
- Demand – Why are more & more people starting their own business?
Building Your Staff (1-2 months)
Okay, we concluded Part One with establishing our company’s name. So far, you’ve invested 9 months into starting a business and all you have is a company name. You’ve done the research, you’re learning more each day, you have your company name, and you know you can’t have a one-man or one-woman business, so it’s time to build a staff. Here are some things to consider when building your staff;
- You WILL have to pay your staff—before you pay you!
- Will your staff be classified as regular company employees or contracted personnel?
- What’s the difference between Company Employees & Contracted Personnel?
- What are the legal, state & federal regulations for staffing Company Employees?
- What is a Confidentiality Agreement & why does your staff need to sign one?
- How will you structure your pay scale? Have you even designed one yet?
- Who will hold what position?
- Have you determined your Operating Costs yet?
- Do you know HOW to determine your Operating Costs? What goes into that?
- Should you include Payroll in your Operating Costs or is it separate (you need to know)
- How will you choose your staff? – Do you know qualified, reliable peers? Will you place ads?
- If you’re unable to immediately begin paying your employees, what will you offer them in the meantime? How will you keep them working for you?
These are all very important things you will have to determine before asking or hiring someone to work for you. Make sure you have these things addressed and figured out before you begin building your staff. DON’T approach anyone until you have this figured out!
Let’s keep things moving along and presume you’ve taken care of all your preliminary staffing requirements, and you’ve compiled a list of possible employees. At this point; you have your research results, you’ve determined Operating Costs, you have a pay scale, you’ve developed a Marketing Strategy, you’ve classified your staff as either Employee or Contractor, you have a Confidentiality Agreement ready to go, you know the type of business you’re starting, you have your target audience. . .and you know you’re ready to move forward, but you know how and you still have some skepticism. So what do you do next?
Find a Business Consultant. You WILL need a PROFESSIONAL Business Consultant—especially if you’ve never started a business before. This is where all your research will pay off. In most cases, during the initial meeting with a Business Consultant, they will ask you a series of questions—depending upon your answers, they will know how serious you are, how much work and research you’ve invested into starting your business, and whether or not they will continue to meet and work with you—these are considered “Probing Questions.”
Sometimes, there are fees involved. Some Business Consultants may charge you a set fee per meeting, while others will charge you nothing because they’re compensated by the agency they’re employed with for their consultation services. Do your homework when choosing a Business Consultant and be HONEST about things with them—DO NOT bullshit your Business Consultant—they will know!
Before you can begin operating as an ‘official business’, before you can ‘legally’ compensate employees, and before you can ‘legally’ perform ANY monetized transactions as a business, you have to first obtain your Business License. Some of the requirements for obtaining a Business License may vary state-to-state. Here are a few things to determine prior to applying for a Business License;
- Will your company be a ‘Corporation’, ‘Franchise’ or ‘LLC’?
- Do you know what an LLC is?
- What’s the difference between these 3 classifications? What are the benefits of each?
- Ask your Business Consultant which is best for you
How will you obtain the funds needed to get your business up-and-running? There are various and effective methods of obtaining funding for your new business—you just need to do the homework once again so you’re aware of all your options and which method works best for you. Some of the most common methods of gaining funding are listed below;
- Crowdsourcing – Essentially describing your company to the general public asking for donations.
- Investors – Having private investors fund your start-up costs, etc… This usually involves relinquishing a percentage of company ownership to them.
- Fundraising – Creating fundraising events to earn your start-up costs
- 401k/Investment Accounts – You may withdraw from a 401k, IRA, etc… to gain necessary funding
- Ask your Business Consultant which is best for you – that’s what they’re there for
Now you have all your basics covered, and you’re ready to go into business! Do not be discourage by “snags” and “bumps-in-the-road” along the way—it’s normal. Expect the unexpected. Stay focused. – Thanks for your support