Starting a Business? Cover Yourself





startup planningIf you are starting a business or just dreaming of it, you can expect the startup stage to be heady, exhiliarating, challenging, rewarding and sometimes scary — all at the same time.

You’ll be encountering new things all the time — problems and responsibilities you may never have had to deal with before. 

We are fortunate to live in a time when we have so many resources available free of charge to help us, including resources to sort through these basic questions:

  • How do you choose the right business?  Matt Alderton offers his thoughts on Choosing the Right Business for You. In this Work.com Guide, Matt provides his thoughts and resources that will help you connect what you enjoy doing with what customers are willing to pay for. You might also consider the tried and true book “What Color is Your Parachute?“. Part way through the book there is an extensive exercise you can complete which connects the things you love with the things you are good at. You may be really good at accounting but have a secret passion for gardening.
  • What will it cost to start up?  Some startups today can be started for literally a few thousand dollars.  But don’t let that lull you into a fall sense of security — you still will want to KNOW what it’s going to cost.  Tom Nutile offers some answers and more resources in his article Calculating Startup Costs. Tom not only provides the areas you need to consider but his recommendations for the resources you should check out. Be sure to check out BPlans.com, which has some excellent free calclulators, including a starting costs calculator. For contracts and other forms, you might also visit Nolo.
  • Do you have an invention to protect?  If you have an invention that you plan to profit from, you should consider patenting it. That way you can reap the benefits for many years to come. In the Guide for Applying for a Patent, you’ll get a step by step description of the U.S. patent process. You might also want to check out the Patent FAQs at the U.S. Patent and Trademark Office, as they answer many questions about patents in general and how to protect a patent.

Before you jump in with both feet — stop, think and research the many resources available.

So tell me – what resources have you found valuable in starting up? Is there a particular site that has provided information that changed your thinking or provided tools you needed?

8 Comments ▼

Deborah Brown



8 Reactions

  1. This isn’t necesarily a resource like you were asking for; however, it’s a line of thought that can also help to determine how ready you are to begin the new venture. One thing I always put on paper beyond startup costs are the fixed and variable costs for producing revenue at a basic level (obviously, the basic level is relative depending on the type of business). First, if you don’t know what all (or most) of those costs would be to produce revenue at a basic level, then you probably don’t need to go into that business yet. Inputting those costs into a sample income statement helps me see how profitable (or unprofitable) that proposed structure could be. I (along with a friend here or there) have come up with a handful of really good ideas for a business, especially when considering the possible demand. However, once we sat down to do those two things, we saw that most of the ideas we came up with were not profitable with respect to the way we decided to structure things. If we hadn’t done those two steps, we could have possibly jumped into some well-intentioned ideas that would’ve put us in a world of hurt.

  2. Thirty years ago, I would pose a question to people who were looking for help with their starting a new business that went like this, “Suppose that your customers and potential customers had unlimited access to the same product or service you are selling from many companies – why should they do business with you?”

    Thirty years ago, customers’ choices were limited by geography and availability. That is not the case today. Today your customers really do have unlimited access to the same product or service you are selling. It is all just a few clicks away on the Web.

    So what are you doing to differentiate your company, its products, yourself? How do you compete with unlimited competition?

    Here are 3 simple (yet difficult) questions to ask yourself. The answers can lead you to developing your Unique Selling Proposition. The answers can mean the difference between extraordinary success and barely getting by.

    1. Why should I choose to do business with you versus any and every option available to me?
    2. What do you offer no one else can or will?
    3. What is your reason for existence in your chosen market besides it’s where you want to be?

    Good luck!
    Bob

  3. Bob’s comments are perfect. How do you differentiate yourself? If you have a product or service that isn’t available yet, what are the barriers to entry for others who either have the same idea as yours right now or “steal” yours once they see how well you’re doing?

    Another book to consider for those of a certain age (in other words, my age – mid-40’s) – Bob Buford’s “Halftime” and “Game Plan”. These are for the middle ager who thinks he wants to change what he’s doing. It made me realize how my feelings about changing my life around are not unique and gives a realistic assessment tool and plan to go about it.

  4. Martin Lindeskog

    Martin Lindeskog

    How about doing a SWOT analysis? The book, “What Color is Your Parachute?”, is a classic!

  5. Great additions! The comment from Bob about determining your unique value is important in every aspect of our lives. In the book, Making a Name for Yourself, the author suggests that you ask OTHERS what value they believe you offer. So frequently it is entirely different from what you perceive. And so the same goes for starting a business. Are there really any unique ideas or are they just different twists combined with your unique value?

    Back on Gus’ comment about understanding fixed/variable/break even: so true. Often people get caught up in the excitement of going to market that they fail to take the time to effectively put pencil to paper and figure out the dry, boring, all so important financial details of what it will take to break even.

    One more thought: if you don’t know the difference between fixed and variable, you probably aren’t ready to quit your day job.

    Deborah

  6. The challenge for any startup is to direct the tip-of-its-spear toward its market. Without a sharp point of focus funds will drain away and management energy will be wasted.

  7. One has to keep all his options open.
    Knowing oneself is key of course, I agree with the other commentators.
    How about opening a business in another country, the conditions might be less competitive for the right idea.

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