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10 Steps to a Real Business

Ok, people…If you’re going to start a business, flying by the seat of your pants is what many entrepreneurs do, but it’s not the most effective way to go about it. Here are top 10 things you MUST do in order to get your business in the right track.

1. INCORPORATE. Not just file articles of incorporation with your Secretary of State, but actually get a corporate book, with corporate seal, and keep minutes of corporate decisions (you can email me about this) such as choosing the bank account, issuing stock, voting on Board of Directors, etc. Most people think incorporation is a one-step process and then it’s just a matter of paying an annual renewal fee. Not so. You must ACT as a business too. Otherwise, you are personally liable for all your company’s debts, assets, lawsuits, mishaps, etc. And if you file your taxes and claim business deductions based on your business’s corporate standing, this is PARTICULARLY important. So keep yourself in compliance.

This also means you must choose a legal structure, such as S Corporation, C Corporation, Limited Liability Company (LLC), Partnership, or a sole proprietorship. Your choice of legal structure depends on your tolerance for risk of personal liability, your tax concerns, and your exit strategy (how are you going to get out of the business), among other variables. If you want to know more about this, shoot me an email. Otherwise, stick around for more on this at a later blog.

2. GET A BUSINESS PLAN. And I mean get one. You don’t have to spend hours writing it. Get someone else to do it. But at the very least you want to be very well versed about what your business is, who your target market is, what your competitors are doing and how you’re going to make money. This is particularly important if you’re going to a bank for a loan, an investor for equity financing, or the SBA for grants and other funding opportunities. I know you’re in love with your business, and it might be an emotional decision for you. But it is NOT an emotional decision for the bank. So get clear, give them the answers they need, and be on your way to making money!

3. DUCKS IN ORDER. That means, establish your business presence: Get business cards, a website, a bank account, a computer, printer, fax, office supplies, a separate phone line, an actual business email address (who do you respect more as a business professional, [email protected] or [email protected]?). Depending on your business, you may also need to enter into Confidentiality Agreements or Independent Contractor Agreements with your sub-contractors. These documents must be created, and preferably looked over by your lawyer (or business consultant! Ahem, ahem!) so that you know you are covering all your bases.

4. SHOW ME THE MONEY. The most common funding sources are 1) Yourself: Credit cards, refinancing your home, dipping into your savings, or investment accounts, etc. (What?! You don’t have savings or investments? We need to talk! That’s another blog.) 2) Friends and family (make them your initial round of investors). 3) Bank loans. 4) Grants. 5) Angel Investors. 6) Factoring: This is where the financial institution (factor) advances the entrepreneur money against proceeds from the entrepreneur’s outstanding accounts receivables. Factoring firms generally are paid a percentage of the invoice’s value. 7) Venture Capitalists: Venture capitalists are individuals or companies with large amounts of capital to invest and expect higher returns. Use Venture Capitalists if you already have a great track record in your field or as an entrepreneur, and if you have a business concept that will require a lot of money ($250K to $10s of millions) and will have a rapid growth curve.

5. WHERE ARE THE EXPERTS? Get your team of experts around you to support you in the start-up and growth stage of your business. Here’s who you should have around you:

1. Accountants
2. Attorneys
3. Insurance providers
4. Bankers
5. IT support
6. Web designers and programmers
7. Merchant banking (for receiving payments online)
8. Realtors

These people are your advisors, your backup, your support system. Their expertise can save you thousands of dollars and untold emotional and logistical headaches, so don’t be cheap about this. Your business deserves the best!

6. BUILD YOUR TEAM. This does not necessarily mean hire your cousin and your best friend (not that there’s anything wrong with that). That may or may not be the best business strategy. You want people with at least one of the three P’s: potential, proven skills, or are power brokers. Those with potential don’t have the experience or track record, but they’re hungry for success and not afraid to work hard. They’re disciplined and team players. Those with proven skills have the expertise, knowledge, track record, credibility that you need in order to propel you forward. And those that are power brokers are those highly influential people who always know someone you can talk to, can open doors for you, and are WILLING TO SERVE. Power brokers are not egotistical and self-serving.

My personal opinion is that whether you are building a business or not, it is a great strategy to surround yourself with the three p’s, period. Your life will be greatly enhanced because of it.

And if you’re on your own, or your business doesn’t require a ‘team’, per se, then get a mentor or a business coach. You will always have bigger vision when you can count on another pair of eyes.

7. ESTABLISH A BRAND. If I say ‘Just do it’, you most likely know who I’m talking about (Nike). If you wear certain colors on an athletic jersey, people automatically assume you are representing a certain sports team, even if it doesn’t say the sports team name on the jersey. That’s the power of branding. So you want to be crystal clear on the identity of your business you want to portray because you will use that in your stationery, web site, business cards, logos, slogans, etc. Great brands are emotional, have personalities, stick to your head, and evoke something in your target audience. This is one of the basic steps of your marketing.

8. MARKET YOURSELF. The top 7 ways to market your business is by networking, affiliate marketing, online presence, direct mail, advertising, traditional (printed materials), and grassroots (using the resources you already have to spread the word about your product or service, such as distributing flyers, give great customer service and asking for referrals, participate in community events, word of mouth, free samples, etc.).

9. CHECK YOURSELF. At all times, when you are building your business, check how it plays up to your talents, gifts, and skills, and if the business needs something you lack, make sure you are mature enough to admit it to yourself and then proactive enough to fill that gap with someone on your team or your pool of experts. You also want to make sure your business fits your life and personality (not the other way around), and that it fulfills your personal mission, your values, what drives you forward. You want your business to make you WANT to get up in the morning, excited to create another powerful day.

10. KEEP IT IN PERSPECTIVE. At the end of the day, did you give 100%? If not, what stopped you? What became more important than going all the way? And if you did give 100% and you didn’t generate the results you wanted, then what might be missing? Where are you not looking? A business coach can help you to keep things in perspective and offer possibilities you might not have even considered. But aside from that, know that your business is just ONE vehicle to express your purpose, your talents and who you are in the world. If things aren’t working out the way you want them to, it’s okay to fail and try again. The only time failure is unacceptable is when it’s final.