One of the most amazing things is that regardless of the economic climate someone is always starting a new business. The entrepreneurial spirit and drive is unquenchable. Still, even in the best of times it takes more than spirit and vision to get your new business started and keep it alive and thriving.
Sometimes the idea for a new business is like a bolt from the blue. The idea for the product or service is unique, innovative, and exciting, and may be the first of its kind to enter the market, such as self-braiding shower mats made from recycled plastic grocery bags. And then again, for many people, opening that new business is an iteration of an already existing product or service. Another coffee shop or another convenience store or party supply/equipment rental outlet. Either way, the best way to protect your ideas is to get started.
Regardless of the business idea, a whole lot of work will have to be done before you can hang out that new shingle or flashing neon “open” sign. Before anything else, you need to find out if there is anyone out there who will want to pay hard earned cash for your product or service. You need to do market research to determine if there is a large enough pool of customers to open, build and sustain your business.
Every new business has to have a name, should determine its structure, and needs to be registered with a variety of governing agencies. Your business name could simply be your own name. Many businesses also describe the type of business they are in their name. Jack Smoothbore can name his business after himself, but if he names his business Jack Smoothbore’s Black Powder Emporium, all the historical re-enactors and antique firearms aficionados will visit the shop, making Jack more than a flash in the pan.
There are many types of business structures, from the sole proprietorship to publicly traded corporations. Getting some legal advice to help determine the best structure for your business’ needs is always a wise investment. Setting partnership details to paper can save time, money, friendships and possibly the business. If you will be seeking loans, investment or almost any type of financing you will need to have your business structure legally established.
Establishing your new business will entail registering within the local jurisdiction where you plan to do business. Probably the state as well. And of course, with the IRS.
And of course, there are the financials. At the bare minimum, you will need to determine your start up costs, develop a sales forecast, make an estimate of your monthly expenses, and then look at your cash flow. Your start up costs will show you how much money you need to put into your business to get up and running. Your expense estimate should include all those costs you will need to cover every month, whether you open your doors or not. The sales forecast needs to be realistic, show the affects of season, or calendar trends, or other fluctuations. If the sales aren’t covering your expenses, you need to know why and what you can do about it. And lastly, the cash flow shows you what your cash balance is every month. You could be profitable, and still be broke—especially if you’re selling to other businesses. Managing your cash is crucially important.
Write all of this down, everything you’ve done so far. Keep it in your computer files, both as written text and financial spreadsheets. You will use it to develop your business planning tool which you’ll use to manage your business all year long.
Business planning resources
There are many resources here on Bplans to help you get your new business started and keep it healthy.
Get new business ideas and resources at our help section dedicated to new business development and business planning, and we have a section on starting a business including articles about new business basics, incorporating a business, market research, and much more.
We also offer over 500 free sample business plans available for you to read online.
To help with planning your new business financials, Bplans offers free online business calculators for startup costs, cash flow, and investment offering, among others.
Additionally, we’re continually publishing new articles addressing the myriad facets of starting and running a business.
And with LivePlan, our best-selling business-planning software, you can quickly and easily build a plan for your new business, and then follow up regularly on that planning with ongoing management and implementation.
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
