You know what you want to do, you’ve thought of a name, and you’re ready to take the plunge. That’s awesome! The first step in anything is getting started, but before you get ahead of yourself, there are a few things you may want to consider.
What does your business do?
This sounds like a silly question, but even large companies aren’t immune to reworking their initial concept. Instagram, for instance, didn’t start out as the social photo-sharing app we know; it was a concept that was streamlined and refocused on just the components that users were excited about. It’s easy to get caught up in the everyday battles of business ownership which is why keeping your business’s end-goal always in sight is critical in the process so that you see opportunities as they arise. It’s also important so that when your vision and reality meet, they still agree the further along in the process you get.
Are you selling a product or a service?
As a sweeping generalization, most businesses focus on selling either a product or a service. A product is generally goods sold to an end-user. A service is a customer-focused transaction utilizing a skill you offer. That’s not to say products sold don’t involve customer care or that services don’t result in some configuration of goods sold, but the process is often different. Get a sense of which part of the transaction you enjoy the most or feel the most passionate about. In that light, do you want to be responsible for reselling a product made by someone else, or do you want to be the one managing and creating a product? The part of your business operations that you enjoy the most says a lot about what you most want to do. It’s your job to determine if that aspect of your business can work in the way that you set out for it to work.
Who’s your customer and how long will that customer need your product or service?
In order to make a profit doing what you do, you need to know, first, if there’s a need or want for it and, second, who has that need or want. Additionally, consider the likelihood of there being a market for your product or service a few years in the future. Technology moves fast. What was good business a few years ago (e.g. a movie rental business) might be outmoded by something that’s inherently a different model of doing business (e.g. in-home media streaming). If your industry could change, it could require your product or service to change. Consider how you ought to be positioning your overall brand in the present so that you’re able to make that leap, if needs be, to something different in the future.
What do people call your business?
Does your business name make sense? Can people pronounce it? If it’s a play on words, do people understand it? Is that specific web domain available? Does anyone else have a name or domain similar to it that would detract from it? Are social media accounts available with that name? To avoid confusion now and in the future, do what you can to have the same username for all your social media accounts (ideally keeping it as close to your business name as possible). Additionally, consider buying up any additional domains that are near or close to your name (and even the same domain with alternate top-level domains). This serves to prevent confusion in the future with other, similarly named new businesses that spring up and also to redirect to your site if there’s a common misspelling or confusion with your domain that you want to leverage. It’s easier to buy more domains than necessary than it is to broker the sale of a parked domain later.
How should your business be set up?
Set up your business formation from the start. It makes everything from buying wholesale supplies to filing for tax exemptions easier. Anymore, a person can set up a business formation online via sites like this in less time than it takes to finish your morning coffee. Doing this can create a separation between your business identity and your personal assets which could serve to protect those assets should something happen to your business.
Business formations range from DBAs to LLCs to partnerships and corporations. The best business formation for your start-up will vary by what you’re wanting it to accomplish.
- DBA – Going the route of “doing business as,” is an option that uses your social security number as identification while allowing you to operate under a specific business name. It’s simple to set up, which is a plus, but it offers no protection of your personal assets because you and your business are one in the same. (A DBA can also be used alongside an existing business you already own should you want to go by an additional name. In that instance, your DBA has the same level of protection as your existing business.)
- LLC – A Limited Liability Corporation will have its own business identification number (EIN). It’s fairly simple to set up, and it requires fairly low, yearly maintenance for tax filing, etc. This option beats a DBA in that it offers protection of your personal assets because you and your business are separate entities.
- S-Corps and C-Corps – Like an LLC, these have identification numbers that differ from your personal social security number, and they offer protection of your personal assets because, again, you and your business are separate entities. They differ from an LLC in that they’re more complicated to set up and require more maintenance in the way of mandatory regulatory actions and filings. Additionally, C-corps are in a higher tax bracket. If you’re looking into one of these options, consult a professional.
- Partnerships – These are made up of two or more people. Because of the complexity of sharing a business operation along with all of its risks, assets, ownership rights, and so on, it’s wise to consult a professional in case a multi-member LLC or C-corp would be better suited for that situation.
How will they find out about what you do?
Networking is important, but it’s incredibly easy to become a hermit when you’re wearing so many different entrepreneurial “hats.” You need those moments to shut everything out and focus—and then you need to pull yourself out of that and network. Networking happens in a few different ways. It happens through a serious of small, repeated, genuine interactions with people whom you’ve built relationships. It happens in business networking groups that you can join within your city (such as your chamber of commerce), your region, or even online. It also happens when you contact people directly (you might be surprised what can happen just by asking). If you can, it’s better in the long run to be consistent with networking so you’re building those relationships as you go along. Alternately, paid advertisements are another way to get your name out there. Knowing where your customers are, what websites and blogs they visit online, and where they exist in the three-dimensional world—that will go a long way into understanding how and where to focus your advertising dollars. There’s a high saturation level of products and ads in daily life, so don’t be discouraged if you struggle in this area trying to get your product or business noticed. You’re in good company because it’s not easy. That’s another reason why networking is beneficial because it gets you in a position to know and talk with others who are experiencing the same highs and lows of entrepreneurship that you are.
How will you be recognized?
Your business needs to have something to distinguish it as your own. Hiring a professional designer is the best place to start with this. They have the experience, and because they’ve done all this before, they can anticipate what you’ll need. That may come off sounding “yeah, sure—easy to say when you are a designer.” Yes, but not for the reasons you might think. I have a love/hate relationship with the DIY that often goes with bootstrapping. Sometimes, it’s necessary because, like most businesses, in the beginning everything surrounding your budget is tight. I get that. However, I can tell you with a lot of certainty that Charm Design Studio’s logo during year one was pretty awful compared to the incarnation it’s in today. I had less experience then. Better design happens with experience, and professionals are the ones who invest themselves in gaining that experience. A good identity set is like a good set of kitchen knives. If you invest well the first time, it will be able to last a long time—maybe only ever needing to be sharpened a bit from time to time. (Apply that same principle of starting well to product photography, web design, and the like.) If you’re constantly making drastic changes to your logo, it causes a loss in its ability to be recognizable as your business’s identifier. That’s why it’s called identity design—people need to recognize your company; major overhauls should ideally be reserved for reflecting large shifts in your company’s business model, not random whims. One of my absolute favorite design quotes (in one of my favorite design books no less) is by Leatrice Eiseman. In her book Color: Messages and Meanings, she said “As a general rule, evolutionary alterations are less risky than revolutionary changes….[S]ome risk-taking can be a real attention-getter…[b]ut it should be a calculated, thoughtful and intelligent change that can be backed up with a meaningful rational.” That’s spot-on advice. (Seriously. Someone cross-stitch that whole quote onto a pillow for me because that’s my level of warm, fuzzy feelings for that quote. It’s on page 70. And before you do, be sure to ask Leatrice what color the thread should be. She’ll know.)
Outsource what you can.
If there’s something that you know you can’t do or can’t do very well, hire it out. There are some tasks that are more cost-effective to delegate to someone who can do them well vs. struggling with them yourself over and over. Also, hire well. The time and money you invest in redoing something also has a price tag. If you have absolutely no room in your bootstrapping budget for hiring, you might consider contacting a college to see if any professors might refer their internship-seeking students to your business in exchange for them obtaining school credit hours.
Give yourself time and grace. It won’t happen overnight. Your efforts matter even if you don’t see it right away. Give yourself permission to end your work day. It’s all too easy to get caught in a trap of consistently doing 12-18 hour days all while fielding the “oh, that must be so relaxing being your own boss” comments, but allow yourself moments to take deep breaths and to remember why it is you’re doing this.