Excelle

10 Steps to Starting a Company

A quick-read guide for those considering going the entrepreneurial route.

1. Find something you are passionate about.

This step is number 1 not only because it is best tackled at the beginning of the process, but also because it might be the single most important factor to influence your chances of success. Starting a business takes commitment and dedication that can typically be invoked only by firm belief in the value that your business will add to those who avail of its services.

2. Do your research.

Remember how much time you put into buying a particular piece of technology, or furniture, or clothing? Multiply that by 10 and that’s the minimum amount of time you should spend researching your industry and competitors. Joining organizations in your p(. field, and in-depth case studies on leaders in the industry are good places to start. On average, successful entrepreneurs spend a year researching their industry before finalizing their business idea.

3. Chose a name.

This particular step could take minutes, or it could take months. It is important to have a name that is relevant and marketable, and also one that won’t get you involved in any copyright or trademark conflicts.

4. Write your business plan.

The business plan is the summary of your market analysis as well as a description of what your company is going to offer. It serves a dual purpose: it is the document you will use to seek funding and to communicate your plan to stakeholders, but it is also an anchoring point that you can refer to as your company evolves. Business plans are static, and are modified to reflect the changing nature of the business.

A typical business plan includes the following sections:

a)Executive Summary: Just as it sounds: a summary of the business plan (usually written last)

b)Industry Overview: Industry description including trends and major players

c)Market Analysis: Analysis of primary target market, including needs and location

d)Competitive Analysis: Overview of direct and indirect competitors

e) Management Plan: Summary of resource plan and management structure

f) Operating Plan: Description of business’s location, and infrastructure

g) Financial Plan: Funding needs, and current financial statements

h) Any appendices, exhibits or relevant supporting documents

5. Choose your business structure.
==

==

As with many decisions in starting a company, this is an important one. A legal representative and an accountant should be consulted when making these decisions. Common options for business structure in the U.S. are:

a) Sole Proprietorship: Allows an individual to own and operate a business by him/herself

b) Corporation: A legal entity which exists separately from its owners, protecting the owners from personal liability

c) Limited Liability Company: Offers liability protection similar to that of a corporation but is taxed differently

d) Limited Partnership: Provides the option of limited liability for some partners

e) General Partnership: Must have two or more persons engaged in a business for profit and profits are taxed as partners’ personal income.

6. Find the funds.

You will have to address this question in the business plan section. Some amount of capital is required to start most companies. Depending on the nature of the business, the amount could be small (it is possible nowadays to start an online company for as little as $5000) or large. Many entrepreneurs start off self-funded (that’s why you need commitment; see point #1) or with the help of family and friends. After a working prototype of a product has been finalized, angel investors or venture capitalists are approached. (In some cases, entrepreneurs successful secure funding from these sources solely through the business plan or proof of concept.)

7. Protect your property.

These days information is shared easily and what may have seemed as your prized innovation today may be somebody’s else’s entrepreneurial fodder tomorrow. Several thousands of innovators file for protection under US patent, trademark, and copyright laws. Common entrepreneurial misconception: Filing a patent on your product does not automatically mean that you will have a successful business.

8. Get the licensing and taxation right.

Some companies need licenses to conduct business. In addition, the IRS provides a taxation checklist for new businesses. You will likely need a lawyer for one or both of these tasks.

9. Set up your space.

Once you get the taxation part down setting up a new office may seem like a breeze, but it’s not that easy! Consider the special needs of your business when evaluating a city or a location. For example, a software startup would be best accommodated in an open area that allows for maximum collaboration; a retail shop might need to be on a main street, or in a specific shopping district. Once you get the physical space finalized, you can let your creative juices flow to furnish and decorate it.

10. Get customers before you start.

Customers are critical because without them, you don’t have a business. Cultivate potential leads before you have launched. Network, offer promotions, give your product away for free. If they don’t buy it, aim to create a buzz. It’s never too early to get to the word out.

---