Starting a business doesn’t have to take months or years. Follow these steps and have your business ready to launch in no time.
Are you looking for the fast track to starting your business? You want to make sure you hit all the high points but don’t get bogged down in too many fine points that lead you nowhere, right? Then read this guide, and get your business running in no time…
Start thinking about whether your core idea makes a viable business.
How do you know? Well, honestly, you don’t always. It helps to take a step back, try to be honest and objective with yourself, and ask these questions:
• Does anybody need (or want) what we’re going to be selling? How bad is the need, or how much do they want it? Think about it in common sense terms. Vigorous market research will come later.
• Will they pay for it? While they say people will beat a path to your door for a better mousetrap, that’s not always true. Think about it in your case.
• Are they paying for something else, now, already? Can we go from that to honestly believing they’ll pay for what you’re going to offer?
• How will you focus? Do you have a strategy, or are you planning to do everything for everybody?
The answers to these questions may seem obvious, but the point of this exercise is to give yourself a reality check. Essentially, you’re asking whether there’s a market for your product or service. If you’re laying out a lot of money, and especially if that’s somebody else’s money (like investors), it’s worth it to do the background research.
There are no formulas for ownership, and it may seem awkward at first, but if you’re partnering with someone, it’s a thousand times easier to do it now than to wait until after the money starts flowing.
Determine the percentage of ownership, who does what, whose idea it was and how much that matters. There are no formulas for ownership. The closest thing to it is money spent, especially if you add in time spent (so-called sweat equity) and work that into a money value.
It’s extremely hard to value the original idea – I say the idea has very little real value, because it’s the work that matters. You have to talk through this. For now, talk about it first, and leave it to settle for tomorrow.
Now that you have mulled over the potential legal issues surrounding ownership, it’s time to get concrete. Today, get a draft of the agreement in writing.
We don’t mean go to the attorney, but we do mean write down the main points of your agreement with the other people involved. You don’t need formal legal language. That will come later (actually, Step 17). What you want is a simple, plain agreement: Percentage of ownership, money invested, time invested and who owns what.
That might be just using your own name, but usually it’s more than that, including not only coming up with the ideas, but also checking them for availability, and registering the name to make it legally yours.
You don’t have to make it final, at least not yet (you will later, Step 17 again). Start with the ideas, though, and start thinking about it.
Many people misunderstand what you can and can’t do with names. You can waste a lot of time with those misunderstandings.
Some people dread the forecasting, but your business won’t succeed without it. How can you estimate expenses without knowing sales? How can you estimate your initial cash needs, as part of your starting costs, without knowing sales?
A lot of people think sales forecasting is some highly sophisticated scientific thing they don’t know how to do.
Don’t worry; back here in the real world, a sales forecast is an educated guess. How can you forecast something brand new?
Break it down into pieces. Lay it out onto a spreadsheet over 12 months and make your estimates for each month.
Think about how many tables, how many stalls, how many hours? How much per each? Multiply those units by the rands per unit, and you have a sales forecast.
Like your sales forecast, lay out a spreadsheet with rows on the left, months along the columns and a sum at the bottom to come up with an initial expense budget. Think about rent, utilities, marketing costs and payroll. Note: remember to include what you’re going to pay yourself.
Start this with two simple lists: Expenses you’ll incur before you start, and the things (assets) you’ll need to have. Expenses are things like legal costs, fixing up the location, setting up your website and so on. Assets are the things (inventory) you’re going to sell.
The harder part is estimating how much money you need to have in the bank, to support the company through the normal drain period during the early cash-negative days. You have to lay this out month by month, comparing your sales to your expenses, watching the way the money goes in and out. Remember, in most business-to-business settings, you have to wait to get paid.
Think about your target market. Imagine a hypothetical, ideal customer. Determine his or her age, gender, job, favourite media and family situation. It’s important to know your customer well.
What’s your message? Can you say it in a single sentence? What if you have just one sentence that your customers will listen to? Where would you send that message? How would you reach them? Think about your marketing strategy and implementation details. Take the time to go through a short but focused marketing plan to make sure you understand what it will take to market your business.
Start developing a sense of the look and feel of your company as your buyers will see it. What will your logo look like? What sense will it have to convey? Old-fashioned? Trustworthy? Leading edge? Everybody has a brand. What will yours be? How will you get that idea across to customers and potential customers?
Develop your look and feel with logos, signs, letterhead and graphic standards. These are your branding essentials, and you need to have them in place before you get much further.
Have you started your website already? Have you been thinking about it? Today’s the day to get going with that. If you’re building a Web 2.0 application or any website that’s core to your business, then you might have to settle for simply having begun by the end of the three weeks.
For most businesses, you can have a website built very quickly. Think about the basic elements of your website, and at least get a site up with basic information about you, your business, your products and your services.
These days there are some good shortcuts available: take a look at TypePad, WordPress and blogger platforms, for example. These were built for blogging but can apply to many small sites, with little to no formatting work.
Think about how your customers will pay you. If you’re going to be selling to consumers, then you probably want to establish a merchant account so you can accept credit cards.
These days, because of the online suppliers, there are a lot more options. In the old days you had to go straight to your favourite bank, which had a detailed and time-consuming process. These days, you have the option of setting yourself up with some web stores (like Amazon, Yahoo! and others) that can handle that part of it for you. If you’re selling to businesses, then think about invoices and credit policies for business customers. There’s no underestimating how important getting paid is.
Have you been able to make a sale yet? Maybe you should take today to peddle your goods. Even though you’re not fully established yet, lots of businesses (maybe most of them) start selling before they’re fully launched.
This is where you get to make sure that people want to buy what you’re selling. Even if you can’t make a sale, because things aren’t ready, talk somebody through it. The selling will continue for as long as your business is open, but we wanted to include it here as well because so many businesses are born at the moment the first customer says “yes”.
Take time to talk to an insurance broker and get your business insurance started. These days, you can do a lot of research or even do the whole thing online. And if not, remember the old-fashioned telephone style of finding the right people. Talk to any insurance broker you can think of, ask some questions, and if he or she isn’t the right one, ask who else you should talk to. Find the right person by asking the wrong person who else you should talk to.
In the doing, you’ll find out what kinds of insurance are appropriate for the type of business you’re starting.
Have you been thinking about how to build your team? Do you know the people you want to bring on? It’s time to start ironing down the team and the employees, and start the recruiting process. Depending on your specifics, you’ll probably need job descriptions, and you’ll need to place ads on the right websites.
Start thinking about your employee list. Who will you need to help you out when you actually open for business? Will it be just you and your business partner? Do you need to hire service people? Drivers? Designers?
To get started, take another look at the financial planning you did in steps 1-7, see who you can afford to hire and start looking.
Most people know they’re either going to work out of their home or they know where their office will be. They’re considering the right location, how it should look, where it should be, what else is nearby, and so on.
Even if it’s a home office, you’ve probably been thinking about it. Now’s the time to make sure you’re set up. Desk, computer, telephone, Internet, quiet if you need it, view or not, the whole nine yards.
For a retail shop, workshop or office space, if you haven’t done so already, start looking. It’s almost time to make a decision.
There are brokers to help, and they won’t charge you because they get their commission from the landlords (which you should keep in mind as you deal with them because it’s always good to remember who’s paying). Find a broker who’ll work with you; one who listens to you about what you want and don’t want.
Today take steps to establish the location, whether it’s simply adding desks and phones in your home office or making calls to revamp a restaurant or manufacturing plant. For some people and businesses, this takes more than three weeks. Sometimes you can’t even lock in the location you want in that time. But start planning the office space in which you want to work, as this can create the most lag time.
With some good accounting software, you can keep track of every transaction – every cheque, each invoice you receive and those you send out. Keep careful track of spending and invoice categories, and before you know it, you’re doing the bookkeeping. The best way to choose your new accounting software is to check with your bank so your systems will be compatible. That will save you endless frustration with inputting records.
Way back in Stage 1, you got together with the others involved and wrote down your agreements on who is supposed to own how much of the business, who does what and who is putting in how much money. And you started looking at possible names for the business. Today, get it locked in by creating the legal entity online talking to an attorney or both.
Do yourself a favour, though, before you start the attorney’s meter running: Make sure you understand the basic trade-offs, so you can spend the billable attorney time making the right choices, rather than just understanding the options. We don’t recommend setting up your business without an attorney (online or not), but if you get informed first, you’ll reduce the expense.
You’re nearing the end of your three-week start-up. Just three steps left, so if you’re going to have employees, it’s time to hire them or at least begin hiring. You started the recruiting process last week, so you should have some people in mind. Don’t do job interviews without first going over a simple review of what you can and can’t say.
A lot of what would at first glance seem like common sense is technically illegal. For example, you’re not supposed to ask someone his or her age or marital status because that information can lead to the appearance or suspicion of discrimination.
This is another one that depends on the details. It can be as easy as deciding to spend a few thousand rands you already have or as hard as raising millions of rands from professional investors.
Your simple start-up, involving a home office and a computer, might need nothing more than what you can get at a retailer like Dion or Makro in an afternoon.
If you have to raise more money than you have, you need to write a detailed business plan, find potential investors and do a lot more work. If you’re looking for professional investment, you almost certainly won’t get that in three weeks (although there are some rare exceptions). You can still get your business going with the money you can get quickly so that you look that much more attractive to investors.
This should be fun: Imagine the big party, the searchlights beaming into the sky, a brass band. Well maybe not all that, but opening day is a good event to start your business marketing right.
Plan your opening day and make sure everyone knows about it. Write a press release, talk to local or trade reporters and generally let people know about your business. You want to build buzz so that when you open, people are aware of you.
You’re up and running, and in 21 steps, just as we had hoped. That makes today the first day of the rest of your business. Today you’ll want to take another day to make the sale.
Focus today and see how many customers you can get in the door, figuratively or literally, depending on your business. On your first day, remember to observe what’s going right, what’s going wrong and to note what could be better.
Your business will quickly become different from what you expected, and that’s OK. The key is to record what’s different and why, and make course corrections. In the real world, your planning should become management. So review your plan vs. actual frequently, and run your business better.