Given the current economic state, many people have been forced to seek different areas of employment. Some have decided to return to school and advance their education while others have decided to start their own business, essentially becoming their own boss. Are you in the category of those people who have or are considering starting up their own business? If so, and you have a great idea and are ready to build a business off that idea, you must be organized and know where to begin. Below are three simple tips anyone who is considering starting up their own business should follow:
Form an LLC
The Internal Revenue Service (IRS) explains it can treat a limited liability company (LLC) as a corporation, partnership or disregarded entity where members pay taxes as a sole proprietorship through their personal income tax returns. In this respect, an LLC offers much greater flexibility in terms of structure than other types of business entities. When an LLC elects to be a disregarded entity while operating like a sole proprietorship, unlike a sole proprietorship, the LLC member acquires liability protection. Often, an LLC uses a partnership structure and is a pass-through entity for tax purposes, which means no double taxation.
LLCs offer advantages to real estate owners because there is a lower capital gains tax on a property sale, and the company can easily add new members. Other advantages include not having to hold annual director and shareholder meetings or comply with the stringent formalities and documentation required of corporations. LLC members also have greater options for sharing profits and losses that can be based on agreements rather than being locked into appropriations based on their percentage of investment.
Have a Plan and Follow it!
The first and one of the most critical steps in forming a business is creating a plan for your business – its blueprint for success. A plan gives you a foundation and a direction to follow. Think thoroughly before formulating your plan. Ask yourself – what am I selling, who will buy it, what are my costs, what people do I need, how do I let everyone know I am in the business now, and how will I get funding? Once your plan is in place, follow it!
Don’t be Afraid to Ask for Help
Many people try to take on too much at one time. Wise business owners know that they cannot do it alone, everyone needs some help from time to time. Seeking out volunteers and mentors is a great way to get help for those with a small budget. The more experienced people you have on your side, the more educated guidance you can obtain in starting your business.
Don’t wait until you have every little thing in order to get your business going. If you have an idea and have done enough planning to know where you are headed, get the ball rolling! Remember that you will learn lessons along the way and be willing to compromise, adapt and make changes. Once you’ve completed the basics on starting up your business you must know how to maintain your business. It is important to know who your audience is, how to get clients (and more importantly keep your clients) and maintain good business relationships. Also, you will be ahead of the game if you prepare yourself, in advance, for the fact that you are going to face unexpected challenges. Be willing to compromise. Below are some simple tips to follow:
Know your Customers
Knowing who you are selling to (your customer base) is vital to starting a successful business: in other words, who is buying your product? So take the time to do market research – Who needs your product or service? Who are you trying to reach with your marketing and where can you find them? Knowing the answers to these questions will help you in creating your product/service and in creating and maintaining your marketing plan. Once you’ve established your audience and customer base, keep in touch with them. Send out surveys to obtain valuable information on your clients’ input, opinions and feelings, and follow up on important news with them. Develop a client database and use it often.
Be Honest about Your Rates
Be honest and clear with prospective clients about your rates. Equally important, you yourself need to know your rates and establish what you need to earn. Here is an area where you need to be brutally honest, set realistic goals and figure out what you need to earn in order to keep your business alive and thriving. A thing to remember when setting your rates: often you are selling the VALUE of your products and/or services, not necessarily the product or service itself.
Remain Dedicated to Your Goal
A huge factor in being successful is how much you really want it. As a new business owner you are going to be hit with challenges and barriers that even the most thorough planner could not have anticipated. Remind yourself that you can and will overcome these adversities so long as your ultimate goal is really worthwhile to you.
Starting and maintaining a business requires constant awareness because your client base and the business market is constantly changing.