Five Points on the Roadmap for Opening a Business

Fall always feels like a time for fresh starts and new ideas. If the change in seasons has you mulling over starting a new business, we have a roadmap that will get you on your way and avoid costly detours and accidents.

Point 1: Plan Your Journey

Draft your business plan. Every trip begins with an idea—and the journey to launching a business is no different. As Stephen Covey famously said, “Begin with the end in mind.”  Take that kernel of a business idea and begin to turn it into a business plan.  Don’t let the term “business plan” paralyze you. Your initial effort doesn’t need to be as long as “War and Peace” or as riveting as the “Hunger Games,”  but, the act of translating your vague dreams into a concrete plan is the first step to success. 

Your business plan should answer these questions:

• What products or services will you be offering and who will be your customers?
• What sets your company apart from the competition?
• How will you organize and run your business?
• How will you market your products or services?
• What sales channels will you use?
• What are your financial projections, short and long-term?
• How will you fund your business, short and long-term?

In addition to information about each component of an effective plan, the Small Business Administration has a “Build Your Business Plan” template that walks you through each step.

A business plan not only helps you chart your route to opening your business, it will increase the likelihood of funding sources taking your business seriously and it provides a way for you to make sure you are staying on track as your business grows.

Point 2: Make Preparations

You have your destination in mind. Now it’s time to start “packing the car,” by making the initial decisions that will be key to your success. 

Assemble your dream team.  An entrepreneur must take on many roles to achieve success. But, a savvy business owner will also assemble a team of experts that can provide guidance and serve as a reality check.  An ideal team includes professionals and peers.  A consultation with an attorney and an accountant in the planning phase is far less costly that retaining them to take remedial action if you make ill-advised choices early in the process.  Another aspect of your team should be your “mastermind group,” a small group of business owners who meet regularly share ideas and hold each other accountable.

Determine your business location.  If you plan to work from home, investigation your town’s zoning requirements to make sure your planned business is permitted.  If you are going to lease office, retail, or manufacturing space, make sure you understand the occupancy, use, and signage regulations before you execute the lease.

Name your business.  Before you create a logo or order business cards and letterhead, make sure your name is available for use.  We addressed this topic at length in an earlier blog post, ”Three Questions To Answer Before Naming Your Business.” Consider reserving your business name to make sure it continues to be available until you are ready to start using it. Once you have your name, secure your company website’s name with an internet domain registration site.

Point 3: Get Off to the Right Start

Incorporate or Form Your LLC. Regardless of the type of business or its size, operating as a sole proprietorship or a general partnership is risky business.  While those are the simple, default options, they leave the business owners’ personal assets fully exposed to business creditors. Plus, lending institutions and other funding sources are more inclined to lend to an LLC or a corporation. In addition, taking the step of incorporating or forming an LLC is a clear signal to customers and vendors that you are serious about business success.

CT offers a number of resources to help you decide which type of business is best for you, such as our article “LLC Vs. Inc. – Which Initials Best Suit Your Business?” and our blog post “Incorporating? Three Answers Needed to Complete Your Articles of Incorporation.”

Point 4: “Don’t Miss” Stops Along the Way

Once you’ve charted your business course via a business plan, determined your business location, assembled your key advisors, and established your formal business structure, you are well on the way to success. But, there are a few stops that you must make before opening your doors (whether your doors are bricks-and-mortar or virtual).

• If you incorporated, make sure to hold the required meetings and issue stock. If you formed an LLC adapt your operating agreement.
• Obtain your federal tax identification number (also called an employer identification number or EIN) and any required state tax numbers (such as sales tax registration)
• Obtain your necessary licenses and permits. Our article, “Business Licenses: What You Must Know When Starting a Business” can help you determine what licenses you need.  Or, you can work with CT to ensure that you have all the necessary paperwork.
• Open your business bank account and establish a line of credit. It’s absolutely essential to keep personal and business finances separated—commingling funds can cost you tax deductions and even jeopardize limited liability protections.
• Make sure you have all the necessary insurance for your business. In addition to the standard property and liability insurance, you may want make sure your policies cover data breaches and other cybercrime. Also, consider business continuity insurance to protect you if you are shut down for incidents that didn’t directly affect your property, such as a fire in the store adjoining your.
• Create your website and social media sites. In today’s world, having a website and a social media presence is necessary for every business.

Point 5: Enjoy the Journey.

The planning, preparation and groundwork involved in the first four steps provide you with a great start toward business success.  Now it’s time to welcome your customers and turn all the planning into reality.