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Followng these tips can have help your new business be successful from the start!
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.
Twitter: amgrose
Before anyone gets excited about the S-Corp, you make up for the self-employment tax by paying the business side of social security (and the personal via payroll). I do think the business structure is probably the most important and ignored decision in setting up a business.
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I liked the S-corp as added protection against fraudulent lawsuits. It really depends on the industry I suppose.
Sherry recently posted..Starting a Small Business and The Brilliant Idea
I would also add diversify income and plan expansion. It may be good to use some of the money generated by the business to buy cash generating assets or contruct more websites targetting other specific days. Since the article talks about a flower shop here is an example, an owner can build sites targetted for flowers for mothers day and flowers for valentines day. My business is mostly online but if I were to have a shop or something I would try to build small sites for my shop targetting different but highly related niches.
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This whole post resonated with me because my better half has a photography business on the side and we’re trying to decide if it should be something full-time or not. But, point number 3 ESPECIALLY resonated with me, because I work with CPAs and accountants building websites for them. I’d recommend, if you can, finding a CPA or accountant who has a client portal or some sort of online file exchange system where you can securely send financially sensitive information back and forth. This can be a huge time saver for both you and your accountant. Portals can be inexpensively purchased and give you the security of sending data back and forth without violating and state or federal privacy laws.
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Great points every one of them – however what if my business is completely online? Do I have to form an LLC or corporation of some kind? I am the only employee, and don’t ever intend to have any “real” employees of any kind. Possible outsourcing, but that will not be a regular employee that I can see. Any help is greatly appreciated!
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Twitter: kezanari
I was going the ask the same question, I guess you beat me to it Nancy
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@Nancy An LLC can have some tax advantages depending on how you structure it. It also offers additional protection to your assets. If someone sues your site then they would be taking action against your company not your personally. In other words it is a way from protecting your home and your personal accounts from any action taken against the business. Another good thing about an llc is that your can deduct expenses from taxable income. If you earn $5000 a year but you outsourced $3000 to create the site or buy content you can deduct that amount as business related expenses and pay taxes only on the resulting income which would be $2000. You can deduct other expenses from the income you receive online such as hosting account costs, domain costs and other fees related to the business. The downside is that you have to prepare financial statements and if you are not an accountant you may need to hire one or a CPA to create them. You should also be sure to keep any receipts received related to expenses and payment notices. The truth is that incorporating your business has a lot of benefits but you need to be sure that the whole hastle is worth it in terms of taxes and the expenses related to incorporating fees and hiring an accountant. I would suggest that you talk to an accountant or someone who has a degree in business personally. That way the person can learn about your business and give you a better recommendation since incorporating is not really mandatory.
Source: I study accounting and I am a private investor.
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I remember when LLC’s were the rage and the hot spot was Nevada where they had big tax advantages. Your list is basic but necessary and a lot of people look tot far ahead and forget the basics. Amazing how many people don’t have a plan a wonder why they fail. For an accountant, it really helps if the know whoever you hire as that makes for a closer business relationship. An accountant who is your friend will give you that extra touch.
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Great article! I agree with all points mentioned above especially “Pick a Name”. The name of the business holds a great impact in terms of defining the business, it’s creativity and the trend it follows. Thank you for sharing.
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Twitter: abhishek611991
Very nice article buddy,these are some really important tips.
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Pay your taxes is a must, i have seen a lot of companies fall due to that one problem. At least 3 this year, small business seem to neglect keeping up with taxes. maybe there to busy trying to figure out all the paper work from the new business but they have to take the time out for taxes or get somebody to handle it without letting it come back around and tackle you from behind.
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Twitter: http://twitter.com/PatreceSmith
Great post
Patrece recently posted..The Art of A Good Photo for an Average Geeks updated Mon Sep 5 2011 4:45 am CDT
I have stated my company almost two years ago. I remember that to come up with the name I have done some sort of brainstorm at home with my family. The more heads the better. Here is some suggestions for IT:
The Best IT; IT Gods; ProfIT; ServIT;
Good luck for your friends!
Nice post. I think all of these steps can be done by one person. Educate yourself, make it a one person project because wasting money on people that you really don’t need is just a loss. I still believe that an owner of a company needs to know every aspect of it and not have people that are working for them, educate them.
Twitter: BlogStashDotCom
Great tips. I think the first step is the most important one and one that lots of people get it wrong (they dont do it). Without a predetermined plan, you are destined to fail.
satrap recently posted..10 Best Ways to Make Extra Money Online in Your Spare Time
Twitter: Jajodia_Saket
One more thing is needed “Branding”.. Like get a logo for your Co. n all.. if needed u cn contact me.. :p but really nice article. Thanks..
Saket Jajodia recently posted..Learn How To Make Your Own Screen Protector For Your Cell Phone For Free
Twitter: janesheeba
#1 is the most important and is indeed the starting point. Without a proper plan no business will get to anywhere!
Thanks for the wonderful tips.
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Yeah Jane without a Idea you cannot go anywhere..
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The business plan is fun to write, if you are getting into something you are passionate about. If not then I would think about whether it is something you should really be doing. However, one must always remember that there will always be some adjustment that will be needed to make.
Twitter: aneeez
thanks for this post. I’m seriously thinking of a small business after finishing my college.
You can’t cover business in just one article but these are realistic things one should consider. A lot different than all those business opportunities advertised that make it look like you push one button and money will appear in your hands.
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Twitter: http://twitter.com/#!/LianaFloresFuen
I like how you presented this business solutions specially the “pay your taxes” part. Very helpful article. Thanks
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Twitter: doupto2
Being honest tax payer is a sign of success not just financially but also beyond that miss liana…
Timothy Smith recently posted..DoUpTo- The Fastest Way to Make Money Using Your Talent updated Tue Jul 26 2011 1:56 am CDT
Writing a business plan and choosing a name, I believe, are by far the two most important parts of starting a small business. Particularly, with writing a business plan, even though you don’t need to have everything set in stone, you definitely need an outline of every aspect of your company that you can modify as you learn more and move forward. Although if you’ll be seeking outside funding, you’ll definitely need more details and hard data.
The biggest obstacle for growing an online service business like mine is advertising – it’s just so expensive! But if you develop a marketing plan that consists of Pay-Per-Click, backlinks, article writing, etc., and stick to it day after day even when you’re frustrated (especially when you’re frustrated), with a lot of perseverance and a little luck, you’ll do just fine. Moving up the search engine rankings is the best feeling in the world!
Great checklist. Thanks.
Under the idea of doing a business plan, the most common mistake I see some of my clients make is to answer the question “Why me?”. One they’ve defined their targeted customer, they fail to define why that customer should by from them vs what they are currently doing or the competition. Just answering that question can save a lot of headaches and heartaches in the days ahead.
Agree with your list. I believe choosing the market segment (choosing the customers) is also an important factor to figure out before starting any business. Some businesses may have obvious customers, some may not.
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There’s always more to add to such a topic, and as a small business owner I find that marketing / attracting new clients is VERY important to the success of starting a new business. It wasn’t mentioned there, but might that be assumed under the business plan?
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Thank you for these tips. I’m dreaming of having my own business but I do not know where to start. I have my money on the stock market and I’m thinking of pulling it out and venture on my own.
Someone told me that if you want your business to flourish,hire the best people out there, even if they are more intelligent like you.
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These points are very good with regards to starting a small business. I’m attempting to start a small business, but it’s kind of unique and I don’t know if I can follow these rules. I have built a weather website for Vermont and I eventually want to expand on it, but I’m not sure which way to go with it. I might try and start marine meteorology forecasts on the side again, but it’s about 2yrs away from me doing that.
An interesting article. I have recently been trying to help my son get started with his own business and one of the hardest things to determine was the business name. The main problem was that the business name was going to be established by whatever the website name was going to be. We found out that the preferred business names were already taken, so it took a couple of weeks to sort out a business name and just as long to sort out a logo. I wonder how many other businesses starting out choose their name by what website is available. Then of course we looked at social media names and luckily that has worked out okay. Starting out in business is not an easy task. Maybe Bob The Builder is a good name but not everyone is that lucky!
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Hello
Starting a new business is extremely time consuming and it is important that you do it carefully, strategically and without too much emotion. I say emotion because it becomes easy to try and make things work, instead of standing back, analysing and seeing whether or not it will work.
Business Plans and finances are important factors so you need to make sure all the details are ironed out and there are no horrible surprises waiting
Regards
Jayne
I do agree this is an interesting article. Maybe is too short, but concise.
I’ve got already a small business and the start could be ok… The challenge is to improve every day and to grow up, as you can not afford to just hold the line. (Only if you’re the only employee)
Regards,
Marius
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Paying your taxes is the most important thing to be done after starting up a business and making it operational. There are some businesses who try to skip paying their taxes to minimize their expenditure. So business owners must honestly pay their taxes to avoid future problems that might affect their operations.
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A good credit rating is also very helpful when you need financing to start, or grow a business. Many people who have lost their good rating, and fallen into despair when it comes to financing, just need a little education about how the credit system works. A damaged credit rating can be repaired.
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Nice post Doc. I would add that a great book series to read is:
“The E-Myth” group. “E” is Entrepreneur. Learning to delegate and think with different “department hats” on is Vital to keeping your chiropractic business alive and thriving.
THanks, Dr Doug
Twitter: PRLuv
Remember too that writing a business plan shouldn’t be a daunting task. There are free and paid programs you can access online that will walk you through, step-by-step, and offer templates you can modify based on other businesses in your niche.
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I really believe that an hour of planning can save you months of headache down the road. It’s too bad most people get too excited and jump right in a lot of the time.
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Twitter: beanie72
Number two for me is vitally important. To many business owners try to come up with a fancy name that has nothing to do with what they actually provide. Keep it simple and optimize it for search. What you do and your location are the two keys for a good name that will show up in local search.
Cheers Beanie
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Owning your own business provides the freedom to do what you want. I think it is important to pick a business name and logo that is catchy. The consumers need to recognize your banding.
Twitter: doupto2
this is very educating post you have for someone who has its own business. great job!
Timothy Smith recently posted..DoUpTo- The Fastest Way to Make Money Using Your Talent updated Tue Jul 26 2011 1:56 am CDT
Being in the Real Estate business is basically like owning your own business . I live and work in the small Texas town of Fredericksburg which is a very competitive market place. I must say this article makes some great points and the one I think that is most important in my industry is the ” pick your name ” or rather brand yourself so that you are top of mind for folks when they think they want to buy a home or sale a ranch. Again, Great article
I like your insight about how important it is to hire an accountant. The financial aspect which by the way is the most important aspect to consider, becomes so much more organized. Thank you for sharing.
Twitter: danalingga
Business Plan is the basic. It is said: “fail to plan, you plan to fail.” So, it is the plan that will support our business to go further.
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All these above tips prove very effective if applied well in starting the business. My son is very interested in starting his own business and I will definitely advise him to read this article.
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Outsourcing your payroll is an easy way to make sure you can focus on your business to get it off the ground intelligently. After you have your business started, don’t forget to advertise freely on social media!
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I have a SME too..My business is a little craft store. I think if we want to make a SME, our SME has to based from our passion. We should follow our passion to make a business
Thank you so much for the article , as it will help me start up my small plumbing business.
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These are really useful points to remember. Thanks for sharing them with us. It’s very difficult to start a new business without any support. You alone have to manage all the things and this increases the chances of mistakes. So these points will definitely help people to stay focussed and do their work perfectly and effectively.
Funny – when I started my business I had all these points (from tutorials, books, guides for small business etc) in my head but in some odd way I did not follow all of them. I know it sounds a bit strange but the beginners do not want to hear the experienced ones
Twitter: @bestofshayari1
thanks i am also running a small business of hand made cards.some of the tips are very great and being frank i did not notice them when starting my own small business. need to rethink .thanks.
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