10 Critical Reminders for a Successful Business Start-Up

Business. the first thing that comes in mind when we say the word business is – revenue. Revenue is what drives a business towards success and achieving the goals that it desires. but, before a business can start earning, there are expenses. Start-up expense to be exact. Operating cost, Legal cost and all other costs associated with starting a business can be overwhelming when first setting your foot on starting one. However, this post is not regarding expense at all. so why am I talking about revenue and expense? If the article isn’t directed towards revenue and how to cut costs why is it even targeting these factors? Because we are going to analyze 10 things that is critical to starting a business which will help you in maximizing revenue and cutting expenses as you venture into the wild world of business.

Starting a business without a doubt is scary. some plan ahead of time and some just jump into the scene. but if you want to succeed and start a business that will hit home run in the long run, careful planning is a must. so if you are planning on starting a business here are 10 reminders that will help you prepare yourself and your business from the worst, while giving you an idea of what it might be like down the road. None of these reminders are in any order. As far as I am concerned, each of them have their own importance and play a critical role in starting a business and planning. Let’s move on with the reminders, shall we?

1) Disaster Plan

Remember Hurricane Katrina? Of course you do. It’s not easy to forget such a catastrophic moment in history and we should certainly not forget the businesses that still exist in New Orleans after Katrina’s wrath was over. why did some business survive and were able to get back up while others just went floating with the water to become non existent? the answer is simple. They had a disaster plan in their arsenal waiting to be unleashed.

We hear the saying quite often ” If you think worse, worse will happen, ” I disagree with this statement. We shouldn’t think of the worse in a way to make us retreat from what we have in hand, but to give us a backup plan in case of emergency. why do we have generators that supply power during electricity outage? Just so that there is a backup just in case. A disaster plan while starting a business serves the similar purpose. It is the answer to “what if? ” and ” just in case.” no body knows what future holds and having a disaster plan will for sure help you get out of the rut when there is one.

2) Target Market

Who are you going to sell your product and services? Is it for children under certain age, teens, young adults or seniors? I used to own a residential cleaning business couple years ago. My main target market were working family who barely have time to clean their houses due to their busy routine. I promoted my business to this segment of demographics as much as I could and it’s no surprise that the business went BOOM! It was a huge success. what if I had targeted college students? would it be as big of a success? to be honest, I did promote my services in colleges and universities but the response was very low and the costs way outweighed the profit. Working families were certainly the bread and butter for a business like this, not the college kids who either didn’t care about keeping their apartment clean or didn’t have the money to afford such services and chose to do it themselves.

Selecting a target market might seem like quite a feat to achieve. It’s not. If you were to start a candy business who would your target market be? You are right – Children. while starting a business, keep this in mind. Analyze the main target and then break them into groups and determine which will bring in the most in terms of revenue and repeat business. in my case, it certainly was the working family.

3) Marketing Strategy

” We are going to launch our business tomorrow and it’s going to take off like a soaring eagle. We don’t know how because we are not going to market or promote since we don’t have a marketing plan.” what do you think of a business that starts up with this mentality? Exactly! It will just sit there waiting to be recognized by potential customers who don’t even know the business exists. Without marketing strategy or a plan to implicate, a business is nothing but a penny in your pocket. You know it’s there but you don’t know how to make use of it.

Without a carefully planned out marketing strategy to promote your products and services, your business is most likely to fail. Marketing is the key to a successful business and it all starts in the start-up phase which determines the effectiveness by taking various things into consideration. Who do you want to target as your main market? How are you going to promote your products and services? would online marketing be more effective for your business? These are some of the questions that you should try and answer while creating a marketing strategy. Of course, there are a lot more questions you need to ask yourself and analyze as this is one of the most important aspect of business. Without a healthy and effective marketing strategy your business will sink before it can even sail.

4) Start-Up Costs

I would like to quick share my story on how I cut back on start up cost when I started my residential cleaning business.

While I was planning to launch my residential cleaning business, one thing I wanted to avoid was taking out a business loan. As you can imagine a cleaning business doesn’t really require much. A broom, vacuum, couple mops and that’s it, right? wrong! I was in for a surprise when I started analyzing everything that I might require to shine a potential clients house. there were a lot of costs associated with it. to cut back my start up cost and eliminate taking out a loan, I bought only couple things that was absolutely needed. some of the things most people don’t have in their homes are carpet shampooer, stair vacuum cleaner and such. I bought these machines and rest I planned on using the customer’s cleaning equipments. while marketing my services I let everyone know that we would be using their cleaning supplies.

Because of this I was able to save a lot of money and put it back in the business. Within a year I was able to rent a space in a location that was very accessible and ” the go to part of the town “, so to speak. This gave my business a lot of exposure.

As you can see, if your business doesn’t require as much in start up, try and avoid the urge to go all out. You want your business to stand out from others while starting but try and provide quality instead of quantity. Keeping your start up cost low will help you grow your business tremendously and if you can cut back on that business loan, imagine the possibilities. not all business can start out without a loan but careful planning can certainly eliminate the need to cash out more that you actually need.

5) Expense Estimation for one Year

This is similar to income estimation, the only thing is you will be analyzing different factors while estimating. Expense estimation is as important as income itself because without any expenses you won’t be able to earn income. It’s a fact. You start a business, you provide products and services and you promote/market your business. the key to any successful business is to cut cost while maximizing revenue. This is where this step becomes critical. when you analyze your income, the major part of it will directly depend on your expenses. what is your operating cost? How many employees will you need to hire and what will be their pay? Machineries, man power, stationery, transportation, etc. are all your expenses that you put in your business to earn revenue. Without these expenses your business won’t exist.

Estimating expenses for one year will give you a rough idea on what you need and how much you need to spend in order to keep the business running. Among all this information is something that the loan officer will require to give you a business loan if you are planning to take one out. I think one year of expense estimation is a good enough indication to see and realize how and where you are going to have to invest to run your business successfully and earn that money you deserve.

6) Income Estimation for one Year

Most businesses completely ignore this part while starting a new business. Of course you want to earn millions but a more realistic approach is needed to see where you and your business will be in one year. This part requires detailed study from every aspect of starting a business. Analyzing your expenses, your marketing plan and everything else is critical to estimate your one year income.

I personally think it is critical to estimate one year income so that you have an idea of where you will be. Besides if you are looking for a business loan, you will most probably need to provide this information as well. while estimating this, try and not to go overboard. Be realistic. like I had written earlier, you might want to make millions within one year but most of the businesses don’t achieve such a goal. Try and analyze different factors such as the demand of product/service in the market, competitors price vs. your price and some other factors. You should be able to easily estimate a ballpark figure for one year income.

7) Legal Bindings

Before you start out a business be sure to check in on the Legal aspect of starting one. Many “want to be” business owners are overwhelmed with the amount of legalities that needs to be followed, but it’s not really that scary if you take one step at a time. As you know, the first thing with starting a business is choosing a name and registering your business. You need to do your due research before you file a name to see if that name hasn’t already been taken. I had a hard time coming up with a name that wasn’t already registered when starting my cleaning business.

The other thing you need to keep in mind is to not violate any copyright, trademarks and patents. there is quite a bit of things that needs to be done and researched when it comes to starting a business in a proper Legal manner. Legal structure is one of the most important part since it sets the basis for your business type. when you file your business you need to know how you would like to set up your business – Sole Proprietorship, Partnership, Limited Liability Company or Corporation.

There are hundreds and thousands of resources that will help you gather all the information that you might need to legally enter the business world. Some sites even help you prepare all the documents and file them legally for a small fee. Although there is a fee I find these services extremely helpful as they cut out some chaos and hassle of dealing with all the Legal issues. If you search ” Legal documents to start a business “, you should have plenty of results to go through and choose the one that best suits your need.

8 ) 5 Year Goal

Whether you are planning on starting a business with 100 employees or all by yourself, a focused goal is something that is of great importance when setting up a new business. Where do you want to be? what do you want to do when you reach the first goal? These are some of the things that needs to answered while preparing your 5 year goal list. Most new entrepreneurs and business owners start out with one goal – more business! This goal alone won’t drive your business to success as running it successfully isn’t just about getting more business but handling different aspect that comes along with starting a business. Trust me there is a lot more to running a business than just, well, getting more business.

While setting your 5 year goal have a clear picture of what you can and what you can’t attain. Set realistic goals. Be specific in what you want. Analyze different aspect of your business, look at your income and expense estimation and other factors. here is a quick list that might help you set your 5 year goal,

• Be as specific as you can with your goals. If you have a focused goal it is much more easier to reach that goal.
• Have goals that are measurable. what would you like your business income to be within 5 years and how much are you going to cut out in terms of expenses?
• Set goals that are realistic. Don’t fly too high.
• Are your goals relevant? As a business owner you need to be able to foresee the future to some extent. Goals that might not be an option today may be something that you might be able to achieve 2 years from now. Develop an eye and thought for future.
• Create a time frame? when do you want to achieve a particular goal? Although it’s a 5 year goal planning, to reach to the end goal at 5 years there will be number of goals that you need to knock out before reaching the 5 year end goal.

This doesn’t mean that you should only have a 5 year goal. the main purpose of this is to give you an idea where your business might be within 5 years. and again, it helps if you are trying to get a loan by showing how well you have thought and planned your business for the future.

9) Online Presence

I can’t stress the importance of online presence in today’s fast paced world. no matter what, no matter what your business is about it’s a must to have an online presence. there are days when I am trying to find a plumbers number to fix my leaky bathroom faucet and the first thing I do is go online and see what plumbing businesses are out where I live. If you want to start a business, an online identity, a presence on the web is a must, a must.

Having an online presence doesn’t mean that you have to spend thousands of dollars on a nice looking website. If your business is solely based upon doing business from the web, then of course you need to have a site that will attract your potential customers. but if you have a cleaning business, a plumbing business or a service that mostly caters the ” offline world ” then a quick website with contact information and rates would be just fine. I am not even going to stress the importance of web and online presence because if you are reading this article you already know what it can do for your business. Without an online presence your business won’t be the same.

10) Study your Competitor

I usually save the best for the last and studying your competitors and shaping your business is the best part of starting a business. It’s fun and challenging. One of the best way to learn is from others mistakes and this is why you need to study competitors. Trust me, you will have a time of your life. here is one of the things I did when I started out my cleaning business,

I called every cleaning services in town and some outside where I live as well to know what the difference was. I called them as someone looking to buy their service. while doing this I found out a couple of things in terms of setting up a rate. some of the things were square footage, number of rooms, number of children ( if you have children you know why they ask for this information ), etc. Based on that they gave me a quote which I thought was ridiculous.

I made calls to many residential cleaning services to see what the price difference was and how they operated. I was still not satisfied with the rates and thought this was outrageous. so I sat down and started figuring things out. Then I realized that there price was quite justifiable since they have all the equipments that is needed to clean the house.Now here is what I did to cut my cost and lower my rates substantially to become the best affordable cleaning service around my area. most people already have vacuum cleaners, brooms, mops and other cleaning supplies. I just purchased equipments and supplies that most household don’t already have. This way the customers didn’t have to pay more for my service as I was charging only for my service not for the equipments. and believe me, most people would rather have you use their cleaning supplies then ours because they know it hasn’t been anywhere else. It was a hit and there we went to become the most affordable service in town.

It grew so fast that within 2 years and 20 employees later I had to sell it so I could have money for school. I went to school for 5 years with no loan and no credit card, thanks to my cleaning service.

The above paragraph just goes to show how much you can learn from your competitors by just watching them do what they do. Analyze their approach, how they carry business, what they charge for their products and services and shape your products and business to give THEIR customers much more. I will tell you one thing from experience, there is no better feeling when you convert someone else’s regular customer to become loyal to you. It’s amazing! This is a ” must do ” step when you are planning on starting your business just like all other reminders. I could talk about competitors all day but will save some of it for some other day.

Well, there it is – 10 critical reminders for a successful business start-up. why didn’t I talk about the Business Plan among all these reminders? Because if you have all these reminders set up in a systematic manner you should have a pretty good business plan in hand .

Ritu

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10 Critical Reminders for a Successful Business Start-Up