Start a Business

If you don’t already have an idea, one approach is to brainstorm a particular category and outline what is working and not working. Finding a good strategy for  coming up with a good (or even great!) idea will help form the basis for a new business.

Once you have identified a business idea, you will need to vet that idea to determine if it is marketable. A SWOT analysis is a tried and true technique for this analysis. Much of what goes into the SWOT analysis will be necessary for the business plan. The strengths and opportunities need to be compelling, while the weaknesses and challenges should not be insurmountable. No business is without obstacles. The challenge is to avoid being blindsided by them. Anticipating the challenges and designing a business that mitigates them is the goal.

For some, buying a franchise­ is a more direct and comfortable way to be your own boss. To get started, here is a list of the top 100 global franchises.

Assuming you are starting a business from scratch, the name of your company is a key part of your branding, so give this a lot of thought. Create a list of several possible names and then go here to see if the domain name, Twitter handle and Facebook URL are available. Even if yours is not a web-based business, you will want a website as part of your marketing plan. If the name is already taken but available for sale, this company can help with a possible purchase.

Once you have selected a name and you have purchased the domain rights to it, consider trademarking the name. It gives you protection against others using your name and it becomes an asset of the business. Trademarking also avoids the possibility of incurring expenses at a later point to change your company name and promotional materials if the rightful owner of your company name legally challenges your company. This is a comprehensive review of trademark law. To pursue a trademark, you can hire an attorney trained in intellectual property or use an online firm.

Bring your company name to life by creating a logo. You can do this rather inexpensively by using this online business or this one.

Some people think that a business plan is “old school” and that today you should just dive right in and do it, rather than getting bogged down in weeks or months of analysis and writing. The decision is up to you, but we recommend that you consider a business plan. Developing such a plan may prove necessary if you need investors, and it can save you a lot of time and money if it reveals solid reasons not to pursue your idea.

Think of the business plan as your go-to market blueprint. By spending the time upfront–before you launch–to think through the strategy, competitive factors, marketing, operational needs and costs, as well as the projected P & L, you will be in a better position to execute once funded. A business plan can also help you avoid cashflow shortages.

Many investors, including banks, will require a business plan as part of the process. For you, the plan offers some protection from launching a bad business idea before you get too far down the road, and it also sharpens your knowledge of the business overall.

A business plan does not need to be long, it just needs to be well analyzed and presented. In many ways, a shorter plan is better because it may reflect very clear thinking. If you are meeting with investors, you will want to create a PowerPoint presentation of the key elements of the business plan.

There is no one way to write a plan, but key sections often include:

*Executive Summary (write this last as it pulls the key info from each section)

*Business Idea (Google example: make it easy to get answers to anything)

*Description of Business (what problem are you solving and how)

*Demo (if applicable and if you have one)

*Target Market (category, demographics, behavioral characteristics, etc.)

*Competition (companies, strengths and weaknesses, voids)

*Road to customers/Business model/Primary revenue sources

*Stages of Development (factors that will lower risk)

*Management Team (why they are qualified to make the business successful)

*Financial Projections (3 years, full P & L including cash flow, ideally monthly)

*How will the money be used/Next steps

There are a lot of products available to help you. We are not big fans of business plan software because no two businesses are alike. Plus, using some of these software packages can be more frustrating than helpful.

We recommend writing your answers to the above section questions. When you get to financial projections, using the government’s templates. Once you click on the site, we suggest the template that says Cash Flow Statements (3 years), but feel free to use any of the templates suggested. If you need help visualizing what goes into each of the sections, you can find a number of winning business plans created by MBA students here.

When organizing information and writing your business plan, keep in mind that developing an elevator pitch will be another key aspect of presenting your business to possible investors and/or clients. Click here for an interactive Elevator Pitch Builder, from the Harvard Business School. Once you have entered the site and have opted to begin crafting your pitch, note the options at the bottom of the hint panel– by clicking on the “X” you are then able to begin entering your text. This is a more interactive opportunity to design a pitch than it first appears to be, so we suggest taking a minute to look through the 5 steps.

If you are considering a technology business, Crunchbase and Quora can be invaluable resource tools for research on your industry and the competitors.  To connect with other entrepreneurs in your area and take advantage of training, StartupDigest is worth checking out.  This is a free service that will connect you to your local startup community and upcoming events taking place in all major U.S. cities, select smaller U.S. cities and in numerous international locations.

Score is a free mentoring service available to anyone interested in becoming an entrepreneur. Retired company executives volunteer their time to help you with everything from writing the business plan to networking.

Finally, there are new incubators and accelerators cropping up every day to help a lucky few nurture their business ideas in a formal program. It is estimated that about 1% of people who apply to any of these programs are accepted, but it can be an invaluable asset given the access to smart and highly connected people. Very recently a common application was created to apply to one or more of the best known accelerators. A comprehensive list of accelerators can be found in this blog. Most of these programs require a fee and/or equity, but this is a low ($1K) to no cost virtual accelerator, recently pioneered by a socially minded Silicon Valley entrepreneur.

The kitchen table or the garage is where many an entrepreneur got their start. But, today many co-working spaces have emerged to provide a quasi office and access to other startups.

It usually starts with you–your savings, credit cards and second mortgages (not all of which are recommended). From here the typical entrepreneur turns to family and friends, with whom you should be clear whether the money is considered a loan or a small equity position. High net worth investors like angels and venture capitalists, who invest for what is usually a large equity stake, are the next potential source of capital. You may also consider a bank loan, but this tends to be more suitable for existing businesses that are looking to expand. This video is an excellent primer on the different avenues to fund your business.

A new source of funding for startups is known as crowdfunding. Several companies (KickStarter, Indiegogo, HelpersUnite) offer platforms for startups to raise money. Current SEC guidelines prevent startups from offering equity on these sites, and as a result most of the campaigns on crowdfunding sites raise money for non profits. That is changing quickly, with many for-profit companies gaining traction and one particular company raising $1 million. (Full disclosure, CareerFuel.net is currently crowdfunding with HelpersUnite, the only major site that combines crowdfunding with charitable giving.) Congress is considering passage of a crowdfunding bill that would make it legal to raise up to $2M through crowdfunding in exchange for equity. The bill is in the Senate right now, having already been approved by the House of Representatives.

Microfinancing is another exciting option for people whose investment needs are relatively small. This is particularly suitable for the person who needs to buy a sewing machine to run a tailoring business or start a food truck. Accíon, Grameen, Seedco, Kiva are several of the largest companies that offer microfinancing. Grameen, started by an economist who went on to win the Nobel Peace Prize for his programs, helps companies in the Northeast and South and does not maintain a minimum credit threshold, arguing that credit history isn’t predictive of startup success.

Sometimes the best investor is what is called a strategic partner. This could be a vendor or compatible business that has a vested interest in your company’s success. One example is a new television advertising technology cooperatively backed by Comcast, owner of NBC and several cable networks. Such partnerships require a lot of thought but may prove very effective given the targeted nature of your time.

If you are a web or mobile company and need technical expertise, there are new companies that provide labor in exchange for equity. This can be a great way to fill out your team if it lacks programming/technical talent.

The SBA (Small Business Administration) may be a familiar to you as a source of government loans to small businesses. While this is part of the SBA’s job, it doesn’t typically offer such services to startups. SBA loans are administered by banks as part of the commercial loan process. Take a quick look to see if you may qualify.

Right now small grant money ($1K) is available with this foundation and there are no strings. Also, BizPlanCompetitions.com has a fantastic list of entrepreneur contests and business plan competitions.

As mentioned earlier in this section, angels can be a helpful source of investment in the $50-250K investment level. AngelList is a one-stop shopping platform that instantly exposes your business opportunity to thousands of angel investors.

Most small businesses never need investor money. Some, however, require millions of dollars to create and/or scale. Venture capital (VC) is the most likely investment for this type of company. Right now, VCs expect most startups to have at least a prototype and market success before they will consider investing. The road to meeting with venture capitalists is through networking. They are most receptive when you have been introduced to them by someone they trust. This process is a long, delicate, and frustrating one, requiring a lot of homework and ideally a mentor. Steve Blank, a successful entrepreneur turned professor at Stamford and UC Berkeley, has created a fantastic list of all the best articles, blogs (our personal favorites include Both Sides of the Table, Fred Wilson—A VC, and Startup Lessons Learned), pitch suggestions, term sheet and valuation guidance, legal issues, etc. Scroll to the end for this good stuff.

If finance is not your thing and you need to raise money from angels or VCs, this short video series about venture capital from Khan academy will help give you the confidence to meet with investors.

Operations– From a purely operational standpoint, you will need legal, HR, accounting, insurance and payroll, to name a few support resources.  For web-based B2B services, we would recommend an online payroll option. Generally speaking, you will probably want many of them to be local, which means that your social network is key to helping you make good choices. Joining Meetup.com can be a great way to find good, local resources. Local LinkedIn groups, alumnae organizations, etc., are also useful for suggestions.

Ultimately, starting a business means creating and sustaining relationships with customers. Join.me is a terrific (and free!) way to share presentations or demonstrate a product via screen sharing, including an option for conference calls. For credit card transactions made in person (travelling dog groomers, craft fairs, tutors),  here is a great on-the-go option that enables payment on various smartphone operating systems. For keeping track of and analyzing time spent on projects– as well as creating invoices for billing– we recommend Harvest for your small business. For the 1-3 user option the cost is only $12/month, after the initial free trial period.

Useful for both internal sharing and project management, Evernote is a fantastic resource. You have the option of a free app, syncing information between mobile devices and your desktop. For $5/month, Evernote allows not only sharing, but joint editing privileges.

Marketing– As a part of your marketing plan you will need to maintain an active presence in social media, given its importance in today’s world. According to Sitepoint.com, over 4 billion searches are conducted daily worldwide and 95% of website traffic comes from the first page of search results. These figures suggest that you can’t just hope that people stumble upon your website. For a 30 minute primer, check out ColderIce’s take on social media for the small business. Now that you have the overview, The Noob Guide to Online Marketing will teach you everything and more that you want to know about how to effectively execute a social media plan. Be warned, it will scare you, so be selective. Start small and build up to many of the site’s suggestions. You may want to hire a social media professional or agency to help you craft a plan. Try placing an ad on Craigslist and see what you get. Many web developers offer social media services as well.

For PR options,  sign-up here or here to publish your release to the press. Although a free service is available on either site, we recommend you consider spending the money for premium services, as the additional impressions gained will boost your company’s Search Engine Optimization (SEO). Publicity is still among the most efficient and effective marketing tools to build awareness and usage. Having a strong presence on social media platforms like Twitter, Facebook and LinkedIn can help get you noticed by reporters and lead to an article.

If you and/or your company appear to be a thought leader in your category, you are more likely to be noticed. Help a Reporter Out is a resource that connects reporters to sources. Participating in current discussions in your field by “Helping a Reporter Out” is a free way to begin developing your presence. Actively blogging and speaking at industry meetings is another way to get noticed as a leader in your field.

Legal– At some point, you will need to legally protect your company by establishing a business entity for it, whether an LLC, S Corporation or C Corporation. This blog post takes you through the options. Either this online firm or this one can help with the legal formation of your company. If you are a startup with a social purpose, there are some new legal entities that you may want to investigate.

Reading is a critical part of entrepreneurial success. Reading keeps you current, networking makes you efficient, and hustle gets it done. There are no shortage of books that can be helpful. Good to Great by Jim Collins is considered to be the gold standard on how to run a company successfully. Delivering Happiness by Tony Hsieh is a more recent book about the success of Zappos. Reid Hoffman, founder and CEO of LinkedIn, has written a list of 10 rules for entrepreneurs to build massive companies. It’s a quick and worthwhile read.

Newsletters are also valuable reads. We recommend:

*Techcrunch (tech industry bible)

*Mashable (social media download)

*Venture Hacks (VC industry perspective)

*Business Insider (top biz news and analysis)

*Startup One Stop (startup news, resources and NY area events)

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