Since opening my Bellevue Chiropractic clinic I’ve learned a lot about business, and most of that I learned the hard way. I opened a healthcare practice in 1998, and let me tell you it’s rare to find any business training on the curriculum when you’re going to school to be a healthcare provider. And although I can’t change that, I can help others who are getting ready to open a small business, even if you’re not in healthcare. By following these 6 simple steps, you can avoid a lot of the pitfalls that new business owners suffer from.
1. Write a Business Plan
Yuck! Writing a business plan sucks and no one wants to do it, but it is incredibly important. There are so many unknowns when opening a business that you need to make things as predictable as possible. A business plan can help bring things into focus and have you looking at your business objectively. If you’re serious about being successful, start here. Oh yeah… and if you’re planning on borrowing money to start your business, the bank is going to want to see that thing. Sorry to rain on your parade.
2. Pick a Name
I don’t think people put enough thought into picking a business name, but it really is important. Since so many people these days use the internet to shop or search for businesses, picking a name that can be optimized for search is an important consideration. If you open a flower shop in Canton, Ohio, people looking for a flower shop in that area may search for ‘flower shops in Canton’. By incorporating key words into your business name, you let potential customers know exactly where you are and what you do. And search engines like your name because it’s relevant to what the searcher is looking for. Once you have the name, contact your state and ask them how to register your business name. This name will also be your brand, so choose carefully.
3. Hire an Accountant
Contrary to popular belief, accountants are not just for tax time. In fact, working with an accountant long before April 15th can save you a lot of money if you’re a small business owner. When you’re getting ready to open that small business, an accountant can help you with your expenses, with payroll, with how you organize the finances of your business, how you report your income, and where your write-offs will come from ahead of time. Trust me, it will save you money… sometimes a LOT of money.
4. Determine your Business Structure
Sole Proprietor? Corporation? Non-profit? This is an important consideration that can save you money (and headaches) down the road. And who can help you with that? Why, our friends the accountants again, but this time a tax accountant. I can’t advise you on how to set up your business because I’m not a tax accountant (YES!!)… sorry accountants. I can tell you, when I changed my business structure from Sole Proprieter to S-Corporation, I no longer had to pay self-employment tax. Talk to an expert and find out what business structure is right for you, and (cue the broken record), do it ahead of time!
5. Find your location
We’ve all heard the saying, ‘location, location, location’. Location takes big consideration when opening a business – is there signage, is there traffic that can see that signage, is it easy to get to, and is there easy access and parking if you have a store front. Make sure you take all of these factors into consideration and not just whether the building is nice. And if you’re looking at office space, contact a commercial real estate broker. They will negotiate your lease for you – present your demands if you will – and they do it at the landlord’s expense.
6. Pay your taxes
I know this one seems like a real no-brainer, but you’d be surprised. There are so many stories of people that open a business and start collecting money, and then forget that not all of that money belongs to them. Uncle Sam gets a chunk and you better not forget it (he won’t). Gone are the days of the paycheck where all the deductions were made for you. You may have local taxes, retail sales tax, state taxes, self-employment taxes… ugh, I’m giving myself a headache. But you get the idea, determine what your taxes are going to be and make sure you save the money. See ‘Accountant’ above.
If you’re thinking seriously about opening a business it really is important to do the lion’s share of work prior to opening. Write a business plan, hire a good accountant, pick a marketable name (not AAA1 Plumbing either), and get your financial ducks in a row. The amount of planning you do prior to opening your business will go a long way in determining its success.