Business start-ups gained momentum somewhere around 2018 or so I would say. Another spike happened after covid-19 when they had to supplement their incomes. The more people started to embrace business concepts, the more they saw the benefits of building business credit and the tax write off goodies.
I remember starting my business ventures back in 2010 sometime. A lot of researching even after taking business classes. Oh yes, a lot of unsolicited advice by both business owners and non business owners alike. And you can't leave out the input of those relatives projecting their ideas of what they wanted to accomplish, but not quite having the confidence to get started, or the ones who started but wasn't quite successful.
Then learning how to decipher when the negative comments or doubts of naysayers are indeed coming from the projection of their own personal experience and self doubt, and not any real business science.
Today, you have to deal with the social media gurus who tell you everything is simple and easy, and that you can become a millionaire in 2 weeks effortlessly, which is nowhere near the truth.
Plus you have to worry about if they are indeed knowledgeable or trying to sell you hoopla to make a quick buck and gain likes for the purposes of profit sharing on the social media platforms who pay pennies in comparison to what they make with advertising companies who pay for the ad space of the people that they are bringing to the table ... (instead of creating their own platforms and getting paid more directly from advertisers themselves)….sigh But I digress.....LOL
So you want to start a Business?
Where do you start? No, you do not start an LLC right way. That is spending money before you have established proof of concept or profitability. It is not necessary to spend money in large amounts or big so soon when you want to start a business. You most definitely should not spend big dollars on advertising before you start.
There is a math formula for marketing. You should not go over a certain percentage (typically 5-7%) of revenue when it comes to marketing dollars, and your marketing dollars should generate a percentage of new revenue. So if you are not generating money, how much do you spend on marketing? $0
5% of 0 = $0
Brain Storm - If you do not know exactly what you want to do, brainstorm your passions. You will be more fruitful and productive if you follow your passion as opposed to paper chasing (wanting to become rich over night doing anything). When it is your passion, you will more likely to stick with the idea as opposed to giving up when you don't make a lot of money right away or when challenges present themselves (THERE WILL BE PLENTY OF CHALLANGES).
If you have your own dream, no one will have the ability to sell you one (get rich quick schemes). When your passion is connected to solving a problem, you now have hit a double whami of creating a market you want to target. You have established building blocks.
* * * * * Target audience profiling template * * * * * *
(available for Tax Star Clients who use the business set up service or have a business legal Plan)
Do your research - Research the industry you will be doing business in. Will you need a license(s)? Will you need to establish a sales tax account with the state you will be operating out of? What are the market trends? How will you be different from competitors? Etc..
Get your feet wet - Start talking to people about the product or service you wish to provide. Listen to the likes and dislikes of your customers. Tweak where necessary. Take note of the cost of materials and/or labor. Are they discounted or available for wholesale under a business account? Will the products have a reduced price ordering by volume? Is there a way to reduce labor costs when you are just starting out?
If you are providing a service, become very familiar with market rates ; national, state, and local - to make sure you are not over or under pricing. Most consumers will not be aware of market rates, so you will have amo against price haggling.
Also, it wouldn't hurt to learn the median salaries of your consumer base. Price haggling happens when there is a budgeting issue or affordability issue. No matter what the income level, people buy what they prioritize. But when you have the amo of research, your customer may begin to reconsider affordability by incorporating that knowledge into your marketing approach.
Monitor your sales tactics and approach. Make sure you stay within legal parameters with sales tactics and marketing. Making outlandish or unproven claims could put in legal liability you don't want to be in.
This is your research and development stage. You work out all of your kinks before launching a grand opening. When you go big too soon, all your mistakes are very visible and you only get 1 time to make a first impression.
* * * * * Business Start -Up Check list * * * * *
(available for Tax Star Clients who use the business set up service or have a business legal Plan)
Business Plan - YOU MUST HAVE A PLAN. You sink more money by trial and error, guessing, or winging it than you would if you had a business plan. Business plans are not just for asking for funding. They help you map out costs, establish a time line, and help ween you off your W2 job with an exit strategy if that is a goal. A Business Plan is critical for start-ups because it helps to organize your thoughts (because a million of them will flood your mind) and keep you grounded and realistic about your goals.
A business plan will take you at LEAST 2 weeks to complete. If you do a business plan in 2 days and it is only 3 pages, I will tell you right now it is throwed (yes I said throwed) together and missing a lot of information.
I have seen plenty of business owners who have been in business 5+ years, have no idea of what their costs are, do not track how much they are paying for labor, no idea of market rates, and either over or underpricing, and can't figure out why they are not profitable or are experiencing cashflow issues.
THE NUMBER ONE REASON BUINESS OWNERS GET TURN DOWN FOR BUSINESS LOANS IS NOT KNOWING THEIR NUMBERS.
There is no financial tracking, and that makes you look inexperienced, not too business savvy, and HIGH RISK to lenders and creditors. A lot of business owners figured out that ALWAYS reporting your business at a loss to increase your tax refund is not a good thing for applying for loans during covid. The lightbulb clicked on for many that they have to get serious about being a business owner.
* * * * * Business Plan Template * * * * *
(available for Tax Star Clients who use the business set up service or have a business legal plan)
The issue is not getting access to funds a lot of the time. it is that business owners do not take the time to figure out their finances, track income and expenses, and refuse to learn how to budget. Someone can throw bags of money at you 5 times a day for 5 days, and you will blow it because you have money management issues.
Lenders and investors are not in business to lose money. They want their money back with interest. To be a business owner is to know and understand this, so you have to learn how to get out of your feelings here. Everything is a numbers game. So, Produce the numbers.
Either you put skin in the game wholeheartedly, or half step and stay scrambling. You can upgrade your side hustle to a business, but you cannot run your business like a side hustle and expect to be taken seriously.
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