Tips for a First-Time Business Owner

Tips for a First-Time Business Owner Have you heard of the podcast directory Odeo? Or the transportation data company Traf-O-Data?

09/03/2024

Have you heard of the podcast directory Odeo? Or the transportation data company Traf-O-Data?

10. Have a Support NetworkAlmost every small business owner attributes their success to a community of supporters. And w...
13/02/2024

10. Have a Support Network
Almost every small business owner attributes their success to a community of supporters. And we don’t mean financial and business support (although that’s important too)—we’re talking emotional and mental support.

A mentor or team of mentors can be an invaluable resource for a first-time small business owner. Preferably, they have gone through the startup process themselves, so they can empathize with your situation and offer insight based on experience.

“The people in your support network can also act as your sounding board if you have new ideas about ways to run your business,” writes Alex Silady at SmartAsset. “If your marketing campaign for your new business fails to capture the attention of the people who are close to you, it probably won’t interest total strangers or potential customers either.”

Develop and maintain your support network the same way you’d develop and maintain any professional relationship. Network your connections to find mentors and approach them about offering informal guidance. Once you find mentors, communicate regularly and express gratitude outside of normal business contact. They shouldn’t only hear from you when you need something.

9. Choose the Right Business StructureThere are several common legal setups for small businesses in the US. Typical stru...
13/02/2024

9. Choose the Right Business Structure
There are several common legal setups for small businesses in the US. Typical structures for a first-time business owner are a sole proprietorship or a limited liability company (LLC).

A sole proprietorship is the most basic and least complicated legal form of a small business. It means a person is conducting business as an individual, and the business will be taxed accordingly. Under this form, a person is personally liable for the business.
An LLC provides some of the protection of incorporation by separating the liability of the individual person and the business. In addition, the owner can still avoid being taxed as a corporation. LLCs are more administratively complex and must separate personal and business finances.

8. Keep Overhead LowFirst-time business owners can sometimes take the mantra “you have to spend money to make money” too...
13/02/2024

8. Keep Overhead Low
First-time business owners can sometimes take the mantra “you have to spend money to make money” too seriously. A better mindset might be Jeff Bezos’ famous principle: “it’s always Day 1.” The Amazon founder and CEO wants his organization to run as lean and responsive as a startup on its first day, no matter how big it gets.

When beginning your first business, do everything you can to keep overhead low. Lower operating costs will relieve some of the pressure for you to generate revenue immediately.

One of the most common forms of unnecessary overhead for new small businesses is physical space. If you work remotely, does your business need a physical space? Even food businesses can begin as delivery services provided out of a home or an existing food business, if they’ll rent you time in their kitchen

Legal and Financial Concerns 7. Don’t Depend on InvestmentsWith the popularity of Shark Tank, every entrepreneur thinks ...
13/02/2024

Legal and Financial Concerns
7. Don’t Depend on Investments
With the popularity of Shark Tank, every entrepreneur thinks they can score offers for their brilliant idea. The image of the angel investor or venture capitalist looms large in TV and movies, with sharp-suited millionaires always ready to fight each other over a good idea.

But in reality, investor money is hard to come by, especially if you’ve never started a business before. “It’s almost impossible to get investment for your very first startup,” writes entrepreneur and investor Tim Berry.

You should plan for the scenario that your business receives no outside investment. Create a business plan that would work with only your savings and conservative estimates of potential revenue. Bootstrapping, or operating your startup without investors, has advantages too. “That dream you had of building your own business ends when you take on outside startup investors,” writes Berry, explaining that investors become your partners—or even your bosses.

When looking for other forms of funding besides investment, consider business loans, lines of credit, and equipment financing. Lendio can connect small businesses with lenders through one quick, simple application.

6. Avoid Distractions (Like Other New Ventures)Some small business owners start their first venture with dreams of becom...
13/02/2024

6. Avoid Distractions (Like Other New Ventures)
Some small business owners start their first venture with dreams of becoming a serial entrepreneur. But starting a new company before the first one is fully established is a mistake—and a common one.

Jason DeMers made this mistake and learned a lesson the hard way. The founder and CEO of the marketing company AudienceBoom thought he could split his time leading a new startup—only to see that one fail and AudienceBoom falter.

“I learned that a successful venture requires 100% attention, focus, and effort,” he told The Hartford. “Secondary ventures need a full-time manager or else they’ll just distract you and derail your existing efforts if you aren’t careful.

5. Have an Elevator PitchAs a small business owner, you’re always on the clock. One of your top priorities is attracting...
09/02/2024

5. Have an Elevator Pitch
As a small business owner, you’re always on the clock. One of your top priorities is attracting customers and investors. (Although don’t assume that you will get investors—more on that below.) That means you must always have your elevator pitch ready to go.

An “elevator pitch” is a summary of your business plan that could attract someone in a matter of seconds. The name comes from the idea of being in an elevator with someone and having only as long to pitch them as it takes to get to their floor.

4. Don’t Try to Be All Things to All ClientsA first-time business owner is hungry for customers or clients—and that driv...
09/02/2024

4. Don’t Try to Be All Things to All Clients
A first-time business owner is hungry for customers or clients—and that drive is good. But too much hunger can make you do irrational things, like trying to perform every function for all customers. When a small business owner creates an overly broad selection of products or services in an attempt to appeal to everyone, it creates 2 problems: a marketing problem and an operations problem.

From a perception and marketing perspective, an overly broad focus means no one knows what you actually do. Marketer Jim Joseph describes this problem in Entrepreneur: “We become so vague that no one knows what we are offering and our potential customers turn to other, more specific options.”

Operationally, offering too many products and services means you will not excel at any of them.

An example of a small business with an overly broad business offering is the local restaurant with a menu the size of a phone book. If pancakes, tacos, lasagna, lobster, and peach cobbler are all available, customers might suspect that none of them are going to be very good. And those restaurants have a funny habit of getting new owners every few months.

3. Have Specific GoalsFirst-time business owners often fall into the trap of vague goals—or worse, having no goals at al...
09/02/2024

3. Have Specific Goals
First-time business owners often fall into the trap of vague goals—or worse, having no goals at all. If your goal is “to make money,” you’ll need to be a lot more specific. How far are you from profitability? Will you close that profitability gap by increasing sales to current customers, growing your business, or utilizing some other strategy?

When setting goals, make them SMART: Specific, Measurable, Attainable, Relevant, and Timely. Specific and Measurable go together—for example, increasing new clients by 25%. An un-specific goal, in contrast, would be to “increase new clients.” An unmeasurable goal would be to “make a better product.” (Better in what sense?)

Attainable goals can be determined through research. Look at the metrics you want to change, and assess how they’ve performed at your organization and at similar organizations under similar circumstances.

2. Create a Business PlanA business plan is a blueprint for your entire operation. Writing a solid business plan is one ...
09/02/2024

2. Create a Business Plan
A business plan is a blueprint for your entire operation. Writing a solid business plan is one of the most important steps in starting your business—it’ll not only be the guiding document for logistics, it’s also essential to gaining loans and investments. All that importance can make a business plan intimidating, especially if you’ve never written one before.

We’ve made an easy, step-by-step guide to creating a business plan that will take you from answering a few simple questions to structuring your formal document. Be sure to read the whole thing, but the sections of your final business plan will be

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