Once I was in your shoes thinking about starting my first business. I had no idea what to do. It was a little scary!
But I’m going to make starting a business a lot easier for you – I’m going to show you exactly what to do – at each step.
INSIDER TIP – If you follow these steps to start your business you’ll be way ahead of most newbie entrepreneurs who make a lot of mistakes.
Finalize Your Decision
Choose Your Business
Differentiate Your Business
Name Your Business
Strategy and Business Plan
Financial Statements & Projections
Finance Your Business
Legal, Registration & Licenses
Set Up Your Website
Alternative Low-Cost Marketing
Build the Startup Team
Growth & Success Strategies
I’ve started 17 successful businesses. Most of these businesses I began in my house with a small investment and no related experience. One business I started with just $1500 and I later sold it for $40 million dollars.
I know what it takes to start a business – and it’s the same for any type of business and any size business, including a small one person startup. Believe me – I’ve done it!
You don’t need a lot of experience or a lot of money to start a successful business. But you do need to do the first steps of starting your business really carefully.
In this article I’ll show you exactly how to start your business, step by step. I will show you how to build an excellent business that has true competitive advantages that will make it highly profitable and successful for years to come.
Save this article and use it as your guide and companion throughout your entire startup journey.
Here are my 100 steps to starting your own small business.
FINALIZE YOUR DECISION
Even with all my experience I still find the decision to start a business a little scary! While you want to be sure it’s what you want to do, I find that I am never 100% sure. But at some point I make a decision to go ahead and don’t look back.
Here’s what to consider when deciding to start a business:
- Do you have what it takes to be an entrepreneur?
- What motivates you to start your own business?
- Do you have enough money to start a business?
- Do you have the time to start your own business?
- Will you keep your day job?
- Do you have the ability to start your own business?
- Set your hard limits for time and money.
- Overcome hesitation and take the first steps.
IMPORTANT – Almost anyone can start a business if they really want to. You don’t need a lot or money or experience.
1 – Do you have what it takes to be an entrepreneur?
Starting a business isn’t for everybody.
You’ll need to be really dedicated. That doesn’t mean you’ll need to work 24×7. But you’ll have to give it your best effort. You’ll need to be your own boss – and make your own decisions. You’ll have to make sure the work gets done. At times, you’re going to have to hustle!
But rest assured, you can make it happen if you’re willing to work hard.
2 – What motivates you to start your own business?
It will be much easier to stay energized and on track if you know why you want to start and run a business.
Here are some of the rewards of having a successful business:
- Make good money
- Enjoy a better lifestyle
- Be your own boss
- Pursue your passion
- Personal fulfillment
Which of these do you want to achieve? Write them down and refer to them when you are having a hard time.
3 – Do you have enough money to start a business?
You don’t need a lot of money to start a business.
In fact there are a lot of businesses that you can start with no money – particularly simple service businesses and Internet businesses.
There are some businesses that will require plenty of money to start. But there are also many ways to finance a new business – as I discuss later in this article.
4 – Do you have the time to start your own business?
The time it takes to start a business will be largely dependent upon the business idea you choose. Many startup businesses will take lots of time. But there are plenty of easier to start businesses that you can start and run part time.
For example I started my book publishing business while I was a full time student. I also started my house painting business while on summer vacation from college.
5 – Will you keep your day job?
For most people I recommend keeping your day job as long as possible.
This way, you will feel less pressured and you will be able to carefully plan out your business.
And it’s totally possible to start and grow your business part time. That’s what I did with my book publishing business which I eventually sold for $40 million.
INSIDER TIP – Keep your day job for now. First learn how to start a business right. Then plan your business carefully. Don’t rush it.
6 – Do you have the ability to start your own business?
Some businesses – like being an electrician – will require specialized training. However, there are many businesses that you can start with no special skills at all – such as simple service businesses and Internet businesses.
Most of my businesses I started without related experience, and I still did very well.
However even if you are starting a simple business, you should first learn basic business skills – which you can do very quickly.
7 – Set your hard limits for time and money
Setting limits will help you feel better about starting your own business. You will have a plan and know when to stop if things don’t go your way.
Here are a couple of examples of limits you can set:
- I will only invest $10,000 dollars in my business.
- I will give my business 90 days to become profitable.
- I will not quit my day job until I match my current income.
By setting limits you will reduce your risk, build your confidence and increase your chances of success.
8 – Overcome hesitation and take the first steps
It’s natural to hesitate about starting a business. After all, the risks are clear. Whereas the rewards are less certain. But I can tell you that the potential upside in both money and personal satisfaction can be terrific.
Furthermore if you start your business carefully – such as by paying close attention to all my advice – you can both reduce your risks and increase your upside.
Or you can hesitate. My father always wanted his own business. But he always found an excuse to hesitate. So he never had his own business.
Whether you are 100% ready to start your business or not, I suggest you take the first logical step – which is to educate yourself and learn more about how to start a business.
IMPORTANT – Don’t be like my father and spend a lifetime making excuses for not starting a business. Instead, consider starting to learn how to do it.
CHOOSE YOUR BUSINESS IDEA
A great business starts with a great idea! If you already have a great idea, congratulations! But if you don’t – that’s OK – there are plenty of really good business ideas out there! And if you are willing to put in some time and energy, you will be able to find an awesome business idea that is perfect for you.
Here’s how to choose your business idea:
- Establish what would make a good business idea for you
- Put together a list of business ideas that you like
- Rate and evaluate business ideas
- Select the best business idea for you
- Validate your business idea
WARNING – Many entrepreneurs do not carefully choose a business idea and either end up with a bad idea or an idea that is a poor fit for them.
9 – Establish what would make a good business idea for you
It can be fun to flip through a lot of different business ideas and see which ones appeal to you – but this is not an efficient way to find your ideal business idea.
Instead you should first establish the criteria that would make for the best business idea for your situation.
To help you find your key criteria, ask yourself these questions:
- What kinds of businesses do you tend to like?
- What lifestyle considerations are important to you?
- What skills and experience would you bring to a business?
- What kind of profit and growth potential would you prefer?
- What’s your risk tolerance?
- How much money are you willing to invest in a business?
If you set up your criteria in advance, you will be much more likely to end up with a business idea that is ideal for your situation.
10 – Put together a list of business ideas that you like
To find a really great business idea you should put together a list of ideas that appeal to you. Don’t just consider a few business ideas because then you are unlikely to end up with a really great one.
So instead put together a big list of potential ideas. The bigger the list you start with, the better chance that you will end up with a fabulous idea.
INSIDER TIP – There’s a ton of exciting business ideas out there. To find one you love see my article, The 300 Best Small Business Ideas.
11 – Rate and evaluate business ideas
Once you have established your criteria for what makes a good business idea for you and once you have also put together a list of potential business ideas, it’s time to evaluate each idea.
Go over each business idea systematically and decide how well it meets the key criteria that you have established. Save your notes on each business idea and keep organized.
12 – Select the best business idea for you
After you evaluate and rate each business idea, a few ideas will stand out as your top candidates. Compare these against one another carefully. At this point place emphasis on the criteria that is most important to you in selecting a business idea.
While you want to find an idea that matches your criteria as well as possible, you want to end up with an idea that just plain excites you too!
13 – Validate your business idea
Here’s a very simple way to test if your idea is viable before spending any money on it.
Ask yourself these 4 questions:
- Does my product or service address a problem or provide a benefit that really matters to people?
- Do people like my product or service as a solution to their problem?
- How much, if anything, will people be willing to pay it?
- How large is the market for my product or service?
Ideally you should also get feedback from people who would be potential customers. Consider conducting a survey or personal interviews.
DIFFERENTIATE YOUR BUSINESS
You are a unique person! And your business needs to be unique too! You don’t want to end up with a business that is highly similar to your competitors. Instead you want your business to stand out and be different! And it’s got to stand out and be different in a way that really appeals to your customers.
Here’s how to do it:
- Find your competitive advantage
- Research your market and your competition
- Find your ideal target customer
- Differentiate your business from the competition
- Create your USP (unique selling proposition)
IMPORTANT – Differentiating your business may be the most important thing you can do to make it hugely successful.
14 – Find your competitive advantage
Finding your business idea is just one part of creating your business model. Deciding how your business is going to be different from competitors is equally important.
Yet many entrepreneurs do not do this well. Their businesses are often highly similar to competitors. As a result they end up competing largely on price. They suffer from low profit margins and they find it difficult to grow their businesses.
But if you can truly differentiate your business, it will give you a powerful competitive advantage. So it’s worth a lot of effort to do this well.
In the next few steps I explain how to build your competitive advantage.
15 – Research you market and your competition
Collect as much information as you can about the marketplace, the competitors, the products or services, and potential customers.
Study the most direct competitors in detail. Try to gather as much information as you can about them. For example:
- How long have they been in business?
- How successful do they appear?
- Who is their target market?
- What products/services do they offer?
- What makes them unique?
- How do they price their products?
- What are their main marketing points?
16 – Find your ideal target customer
You need to find the best target customers for your business. To do this you need to segment your market. First decide what is the most meaningful way to segment your market.
Often there is more than one way to segment a market.
For example you might decide to segment the clothing market by:
- Gender (men’s clothing versus women’s)
- Lifestyle (leisure wear versus work wear)
- Price level (discount versus brand name versus designer)
Then look at your competitors. You need to figure out which segments they are serving very well. You want to avoid these.
Instead you should focus on the market segments that are underserved or not served at all by your competitors.
17 – Differentiate your business from the competition
Once you have selected your target market, you need to decide how your business will be distinct from the competition. Why would people do business with you instead of your competitors? How should you best differentiate your business?
There is no cookie cutter answer. Instead carefully evaluate your situation and creatively brainstorm the best possibilities. It’s worth a lot of effort.
For example for my first business, Bob’s Rent-A-Bike, I first tried to copy exactly what my competitors were doing, renting bicycles from third party locations like gas stations and motels.
But my competitors had already snatched up the best locations. Worse, my competitors had brand new shiny bicycles while I had old used bicycles – all I could afford. No one was renting my bicycles.
Then unlike my competitors, I decided to offer mobile delivery of bicycles directly to motels and campsites. My customer loved it. And my business took off. That’s a good example of how to differentiate your business.
Here’s a few possible ways to differentiate your business:
- Serving unmet customer needs
- Serving a narrow niche
- Premium product or service
- Low cost product or service
- Innovative or customized
- Attractive design
- Offering delivery
- Fast or efficient
- Expertise or experience
- Offering a guarantee
- Mobile business model
- Superior sales strategy
- Compelling digital marketing
- Social media presence
- Creative pricing/sales offers
WARNING – Many entrepreneurs do not really differentiate their business from their competitors. They end up competing on price, resulting in low profits.
18 – Create your USP (Unique Selling Proposition)
A Unique Selling Proposition (USP) is a phrase or sentence which tells customers why they should do business with you and not with a competitor. Every business should have one.
Typically, a USP flows from the ways that you have differentiated your business from your competitors. Focus on one reason why customers should do business with you. Then word it in a way that will resonate with your audience.
Your USP should be:
- Right to the point
For example my USP for Bob’s Rent-A-Bike was “Bike Rentals Delivered Free.”
NAME YOUR BUSINESS
Yes, the name of your business really matters. A weak name will actually make people hesitate to do business with you, whereas a great name will attract people to your business and function as a long-term built-in advertisement.
Here’s how to name your business:
- Brainstorm a great name for your business
- Test your business name
- Perform trademark diligence
IMPORTANT – Do not name your business after yourself. It will sound unprofessional and may make people hesitate to do business with you.
19 – Brainstorm a great name for your business
Few businesses have really good names. But a good name can be a huge factor in standing out and pulling in customers, so it’s worth spending some time and energy on naming your business. I would also recommend checking if the Internet domain name is available for the business name you are considering.
A great business name should instantly convey what the business does and more importantly, why customers should do business with you and not a competitor. A good example would be Budget Rent a Car.
20 – Test your business name
Get some feedback. Ask for your family and friends’ opinions! Ideally give them a couple potential names for your business and ask them what they think. Also think about how your proposed business names compares to those of your competitors. Will it stand out? Will it catch attention? Will it give prospective customers a reason to consider doing business with you?
21 – Perform trademark diligence
You need to check that your business name is unlikely to infringe on any existing trademark. You could do it yourself. But if you are setting up a business of any significant size, such as a business that may have a national presence, you should hire an intellectual property attorney to help you navigate through the process.
STRATEGY AND BUSINESS PLAN
Coming up with a great strategy and a comprehensive, well thought-out business plan are incredibly important for determining how successful your business will be.
Yet it can be hard to develop a distinctive and powerful strategy and an outstanding business plan. As a result many entrepreneurs end up with weak strategies and poorly done business plans. Or worse, no strategy or business plan at all.
Believe me, you need to take the time to come up with a truly great strategy and business plan – even if you are starting a very small one person business. Doing these really well will create a solid foundation for building a successful business.
It’s going to take some creativity, some energy and some time – but it will be well worth it!
Here’s how to do it:
- Understand business strategy and why it matters
- Analyze your strengths, weaknesses, opportunities and threats
- Determine your strategy and build your business model
- Create your business plan – every business needs one!
INSIDER TIP – To develop an awesome strategy and business plan you’re likely going to need to give it an awesome amount of effort! It’s totally worth it!
22 – Understand business strategy and why it matters
Strategy is the core formula of your business model. It is the aspect of your model that will play the largest role in determining the success of your business. A good strategy will be different from that of your competitors in some important dimensions – but not necessarily in all dimensions.
For a small simple business your strategy may just be one single aspect of your business model. But for most businesses I recommend that you have one primary strategy as well as several secondary strategies.
Your strategy could be based upon the selection of your target market, how your products and services differ from competitors, your marketing, your operations or just about any other element of your business.
For example the primary strategy for my first business, Bob’s Rent-A-Bike, was based upon how my service was different from competitors – I delivered bicycles directly to customers and my competitors did not.
A secondary part of my strategy was that, unlike my competitors, I saved money by operating out of my home, and by purchasing used instead of new bicycles.
Your strategy should form the core of your business plan and the core of your business itself.
23 – Analyze your strengths, weaknesses, opportunities and threats
How do you come up with a great strategy? You start by doing a very simple analysis of your situation.
You analyze your strengths, weaknesses, opportunities and threats. At business school they call this “SWOT.”
SWOT analysis means evaluating:
Let’s take Bob’ Rent-A-Bike as an example. At first glimpse it may seem that the established bicycle rental firms had all the strengths and me and my new business had all of the weaknesses.
The established companies had the best rental locations, they had shiny new bicycles, they had a lot of money, and they had years of experience operating their business.
I had none of these.
Often when you are a new business it seems like the existing companies have all the advantages and you have none. But don’t give up! I assure you that you can always find some kind of advantage or strength.
In fact just being new and not having experience, while it is clearly a disadvantage, is also an advantage. It means that you are not tied into the old way of doing business and that you are more open to considering new approaches.
And that’s exactly what I did. I offered to deliver my bicycles to customers while my competitors did not.
IMPORTANT – Every business has strengths. For example a new entrepreneur has the advantage of being more likely to consider new and better ways of doing business.
24 – Determine your strategy and build your business model
So doing a SWOT analysis starting with evaluating your strengths and weaknesses can be a solid approach to coming up with a great strategy and building your business model. However, my experience is that to come up with truly awesome strategies you should creatively brainstorm various approaches that may not be based upon your strengths and weaknesses at all.
Let’s take Adams Media, my book publishing company, as an example.
When I entered the book publishing business, once again it seemed that the existing players had all the advantages. My key competitors were huge companies with hundreds of millions of dollars in revenue.
Most of them had been in business for over 100 years. They had excellent reputations and were well connected to all the key existing players in the industry including authors, literary agents, bookstores, wholesalers, printers, the media and more.
On the surface all I had was $1500 and an idea for a book. However, I had something else. I had an idea for a powerful new strategy.
While the existing book publishers depended upon book authors to come up with ideas for new books, I decided to do the opposite. I came up with ideas for new books myself and then sought out an expert to do the writing. Existing publishers paid authors a royalty based upon sales. I paid authors a flat fee.
My strategy was wildly successful. My profits margins reached 25% – several times that of the big, established publishers.
Coming up with a great strategy could be the most important thing you ever do to make your business successful. Give it all the time and energy it deserves! I can’t emphasize this enough!
25 – Create your business plan – every business needs one!
Every single business should have a business plan. Even a small one person business. A business plan is the most important document an entrepreneur will ever create. It gathers in one place all of the important strategic decisions you are making about your business.
A good business plan will serve as a complete starting and operating guide for your business. It can also help attract financing if you need it. It will contain the strategies and tactics that will drive your business ahead. And it will serve as a reference point for making the day to day decisions in starting and running your business. It will be your roadmap to success.
Your business plan should be based upon your principle strategies. For example if your strategy is to offer premium products in your marketplace, then your product plan should explain how you are going to create premium products, and your marketing should explain how you are going to convey to your audience that you are selling premium products.
A good business plan keeps you focused and keeps all the parts of your business running in a cohesive direction.
A complete business plan should include:
- Business Plan Summary
- Market Analysis
- Customer Analysis
- Competitive Analysis
- Strategic Analysis
- Product/Service Analysis
- Marketing and Sales Plan
- Operations Plan
- Financial Statements
A great business plan will make it easy to pull in customers and outperform your competitors, leading to superior profits and solid sustainable growth.
FINANCIAL STATEMENTS & PROJECTIONS
Some people don’t like to create financial statements and projections. But I love to create them! I especially love to create projected income statements because it shows how much money the business can make. And it makes it easy for me to understand how I can change revenue or expenses in the future to make even more money.
Financial statements and projections should also be an integral part of your business plan. Anyone considering financing your business as well as suppliers considering extending credit to your business, will want to see your financials.
Here’s what you need to do:
- Estimate the startup costs
- Prepare your projected income statement
- Prepare your cash flow projection
- Prepare your balance sheet
INSIDER TIP – If you can add 2 + 2 and get 4 most of the time, then you have what it takes to create your own financials!
26 – Estimate the startup costs
How much will it cost you to launch your business? Carefully account for every possible cost but no matter how hard you try, you will typically forget some unforeseeable expenses or experience cost overruns, so add a safety margin to your total startup cost estimate.
You also want to include enough funds to cover startup losses until your business starts to build momentum and begins to actually make money.
27 – Prepare your projected income statement
An income statement is also called a profit and loss statement or a P&L. This statement includes your sales and your expenses. And by subtracting your expenses from your sales it also includes your profit.
A projected income statement is simply an estimate of future sales, expenses and profit. It is also called a pro forma income statement.
Generally I would recommend creating a projected income statement on a monthly basis for the next 12 months and then on an annual basis for the next 3 years.
Lenders or investors may require you create 3 or more different income statements including one for the most likely case, one for a case where sales are weaker than expected, and one for a case where sales are stronger than expected. For larger businesses creating these multiple scenarios is a good idea even if you don’t require outside financing.
28 – Prepare your cash flow projection
The actual flow of cash in and out your business will almost always be somewhat different than the flow of sales, expenses and profits that you record on your income statement.
Hence you should also create cash flow projections, also called pro forma cash flows.
Especially in a product business, but also in many service businesses, actual cash flows can be very different than profitability. For example in the early days of my book business even though the business was always profitable I was still constantly running out of money. Why? Because as the business grew, our book inventories and our receivables from bookstores grew quickly too.
So to stay out of trouble, it is important to regularly update your pro forma cash flow.
29 – Prepare your balance sheet
Balance sheets are a snapshot of the financial condition of your business at any one point in time. They allow you to instantly gauge the financial health of your business.
A balance sheet shows the assets – what the business owns. And it shows liabilities – what the business owes to others including the owner’s equity in the business. By definition the total assets must equal the total liabilities.
If your business is not a separate entity from yourself such as in the case of an LLC or a corporation, then your personal balance sheet is what matters most. Outside financiers, especially lenders will want to see a current balance sheet. They will also usually want to see projected or pro forma balance sheets.
FINANCE YOUR BUSINESS
There is almost always a way to finance a small business – including your new startup. But it may take some effort and some knocking on doors to get the money that you need.
Here’s how to finance your business:
- Consider creative ways to avoid using any financing
- Determine your financing needs
- Decide if you want debt or equity financing
- Choose your source of funding
- Create your pitch deck
- Polish up your elevator pitch
- Make the appointment and ask for the money
IMPORTANT – Many businesses can be started with very little or even no money. If you need money for a startup, equity investors are likely your best bet.
30 – Consider creative ways to avoid using any financing
You can start most businesses with very little money, especially if you are willing to bootstrap and start out of your home. I started almost all of my businesses with less than $2,000.
You can also seek out business ideas that require very little money. There are some business ideas that you can start for virtually nothing.
You can also get your first customers to effectively finance you by advancing you money or paying you in advance. For my map business I offered advertisers a discount if they paid me in advance. For my house painting business I asked my first customer to advance me money for paint and supplies.
You can also borrow money personally and use it for your business. For example many entrepreneurs finance their business by taking out home equity loans. Still other entrepreneurs have financed their startups with credit cards – something I only recommend as a last resort because the interest rates tend to be high.
31 – Determine your financing needs
Before you approach any potential financiers, you need to determine how much money your business will need. Saying you are not sure or giving a rough approximation is not going to work – it will sound like you don’t know what you are doing. Instead make your financial projections and determine your cash need.
Plus be sure to build in a nice extra cushion if startup expenses run higher than projected – they always do – believe me!
You need to be able to quickly explain how the money will be used. You also need to be able to show how you will pay it back. You will be expected to provide financial projections. Most potential financiers will also want to see your whole business plan.
32 – Decide if you want debt or equity financing
Debt financing can be hard to obtain for a startup unless you have fixed assets. But you may be able to land debt financing from an individual investor especially if you sweeten the deal with some kind of equity kicker.
The advantage of debt financing is that you get to keep all of the ownership and future profits of the business. The disadvantage is that you must pay back the debt, usually at a specific point in time. Furthermore if you are operating as a sole proprietorship or a general partnership, then you would be personally responsible for any debts of the business.
Equity financing is usually easy to obtain for a startup. Plus it has the huge advantage of making the business stronger financially.
The disadvantage of equity financing is that you are diluting your ownership in the business. If at some point you own less than 51% of the business you could lose control of the business.
Realistically for a startup you may have to take whatever kind of financing you can get. Furthermore, more sophisticated investors may insist on a convertible note which is basically debt but would convert to equity if the business succeeds.
33 – Choose your source of funding
Where are you going to get the funds to start your small business? There are places and people you can solicit to finance your business. Here are some of the main sources of funds you can use with my personal take on each.
Family and friends: My absolute favorite. Yeah I know you hate to ask people you know for money. But you gotta do what you gotta do! I’ve done it…and so can you.
Friends and family are the most common source of outside funding. Keep it business like when you approach your friends and family. And put everything in writing to avoid later disagreements.
Angel investors: A decent bet in my opinion. There are a ton of “qualified” angel investors out there, willing to make small bets on new businesses. Often angel investors affiliated with angel investing groups are the most visible -but they also tend to see the most proposals.
Venture capitalists: Most VCs don’t finance early stage startups. Those that do finance early stage companies are only interested in businesses that have a good possibility of quickly scaling into a massive enterprise. If you decide to go after VC money, focus on firms that fund early stage startups in industries similar to yours.
Traditional banks: After family and friends, this is your second cheapest source of money. I highly recommend it but you will usually have to have been in business for at least a year or two. It might seem outdated but banks are the gold standard of small business finance. In the US you may be able to get an SBA guaranteed loan through a bank.
Online lending: Online lenders can be a great source of lending for relatively new businesses. However, they will typically only lend to you after you developed a revenue stream. The interest rates and terms can vary wildly from one online lender to the next so be cautious in choosing your lender and particular lending package at that lender.
Crowdfunding: There are basically four different types of crowdfunding and they are quite a bit different from one another. The earliest type of crowdfunding is product based. In other words you offer a future product and people give you money in advance for it. This is a particularly attractive option because you avoid both taking on debt and diluting your equity. Other types of crowdfunding include equity, debt and non profit.
After you choose your source(s) of funds, it’s time to do your homework.
34 – Create your pitch deck
For your initial meeting with sophisticated investors such as angel investors and venture capital firms you should prepare a pitch deck. I would suggest about 10 to 16 slides that show the highlights from your business plan.
You can include a graphic element on your slides but keep it looking business like. Keep your text short on each slide – use headline size type.
The idea of the pitch deck is to get investors wanting to know more. At this point you are not trying to present as much information as possible. Instead focus on a simple message to grab their interest and catch their attention.
35 – Polish up your elevator pitch
Anyone starting a business, whether you need money or not, should have a great elevator pitch. An elevator pitch could be made to anyone you meet that could possibly help your business – a potential investor, strategic partner, adviser, customer, mentor or just someone who knows someone.
In just 30 to 60 seconds your elevator pitch should very briefly and simply explain what your business does and why it exists. Like the pitch deck, an elevator pitch should be designed to get the recipient asking for more information.
36 – Make the appointment and ask for the money
Your approach should be significantly different for seeking equity versus debt financing.
For equity financing try hard to get personal referrals. Also consider meeting potential financiers in person, such as at conferences or startup contests.
Equity investors need to immediately find your business highly compelling to even consider it. So keep your presentation tightly focused on the most compelling success factors.
For potential debt investors emphasize the certainty that their funds will be paid back. Don’t get into the big potential upside of the business – they don’t want to hear it. Debt investors want to hear how their funds will be used and when and how they will be paid back.
Presentations seeking financing can be stressful. So nail down your pitch and practice it. But when you make your actual presentation try as much as possible to make it feel more like a dialog among peers than a sales pitch.
LEGAL, REGISTRATION & LICENSES
Dealing with the legal stuff may not be the most fun part of the business but I have found it’s not something you want to keep putting off to do later, even though you might tempted to.
At first some of this might seem intimidating but with a little bit of knowledge and some advice from an experienced business attorney, it’s not that hard to build a solid legal foundation for your business.
Here’s what I’ll cover:
- Choose your legal entity: sole proprietorship, limited liability company, corporation or partnership
- Draft written agreements with business partners and cofounders
- Register your business name
- Trademark your business name
- Register your business with the IRS and state revenue offices
- Research and apply for business licenses
- Understand common legal issues and how to avoid them
37 – Choose your legal entity: sole proprietorship, limited liability company, corporation or partnership
Now you need to choose your business structure also called your legal entity. When starting a business, you can form a sole proprietorship, a partnership, a corporation, or a limited liability company (LLC).
For the very simplest of businesses you might be fine operating as a sole proprietorship. This basically means that there is no separate legal entity for your business.
But for other than the very simplest of businesses you should carefully consider the various options for legal entities and if possible get the advice of a good business attorney.
The selection of your legal entity will have implications for:
- Personal liability for business debts
- Your ability to attract investors
- Reporting requirements
WARNING – Your choice of legal entity is important. If you don’t totally understand it, get advice from a good business attorney.
38 – Draft written agreements with business partners and cofounders
While disagreements with partners and cofounders tend to emerge only after a company has become profitable, you want to have written agreements in place right from the beginning. Even when you are starting a business with a friend, a close relative, or even your spouse, you should still have clear written agreements in place.
In partnership agreements you need to include what happens when the partners disagree on major issues, especially if the ownership is split 50/50. Will one partner have the right to buy out the other partner? If so how would the price be determined?
In the situation of cofounders of a corporation or LLC, you need to be especially focused and clear on the vesting schedule. If the employee quits or is fired before they are fully vested will the vesting schedule accelerate? Will the reason for their departure be a factor?
39 – Register your business name
If your business is a sole proprietorship or a general partnership and you are doing business under a so-called fictitious name, then you need to register your business with your state government. What is a fictitious name? It is any name other than your own name.
The fictitious name you are doing business under is also referred to as “dba” or “doing business as.” Note that the definition of a fictitious name is narrow. For example “John’s Boats” is a fictitious name. “John Smith” is not if John Smith is the sole business owner.
This allows the public to be able to research who is behind a business. Corporations and LLCs are automatically registered in the state that they are formed. So they only have to file for a “dba” or “fictitious name” if they are doing business under a name different than their formal legal name.
40 – Trademark your business name
For all but the smallest enterprises, you should consider getting a registered trademark for your name. You can get a state trademark, but I would suggest that you consider getting a federal trademark through the U.S. Patent and Trademark Office.
There are a lot of complexities about trademark law and I can’t get into all of them here.
These are a few important facts about trademarks in the US to keep in mind:
- You do have some protection for trademarks even if you don’t register them.
- Even a registered trademark can be deemed invalid by the courts.
- It is up to the trademark holder to police the use and take legal action against any entity that violates their trademark.
Ideally you should both learn more about this topic yourself as well as consult with an intellectual property attorney.
41 – Register your business with the IRS and state revenue offices
If you have employees, any business partnerships, or are a corporation or LLC, you’ll need to apply for an Employer Identification Number (EIN). If you are doing business as a sole proprietorship and don’t have any employees then you don’t need an EIN, and you would use your own Social Security Number for tax reporting purposes.
You’ll also need to request quarterly estimated tax vouchers from the IRS and your state revenue office. These are filled in and returned with your quarterly payments.
You can download the IRS forms (1040-ES) at http://www.irs.gov/forms-instructions.
If you expect to make sales that are taxable within your state then you need to apply for a sales tax permit along with a sales tax number from your state’s revenue office.
Some US cities and some towns also require businesses to collect sales taxes on applicable sales and to get a sales tax permit.
The types of goods that are taxable and regulations on sales tax liability for out of state businesses vary from one locale to the next.
42 – Research and apply for business licenses
Many localities require all businesses to register with the town or county clerk’s office. Many types of businesses, such as many professional service businesses, also require licenses, most often from the state government.
In addition, some businesses require health and safety permits, usually from local governments. Most localities also have zoning laws that specify which types of businesses are allowed in which particular areas or zones of the community. Physical business locations often require occupancy permits and any construction work will require appropriate permits as well.
43 – Understand common legal issues and how to avoid them
New entrepreneurs often make legal mistakes when starting their businesses. Many of these mistakes can be easily avoided.
One of the most common mistakes is failing to get legal advice for situations that could later lead to issues. For all but the simplest startups you should retain a business attorney and get their opinion on which issues they should help you with.
Among the issues I suggest you consider getting legal advice on are:
- Partnership agreements
- Agreements with investors
- Non disclosure agreements
- Trademark and patent issues
- Business location zoning issues
- Legal entity selection
- Hiring and employment practices
I also see new entrepreneurs get into trouble by running their business too casually. For example they often avoid using purchase orders and contracts. I have found that clearly defined purchase orders and contracts can go a long way to avoiding disputes and legal issues.
As I’ve said before it’s more important to be different than to be better. You are better off creating products and services that do not directly compete against your competitors.
Here’s how to create great products and services:
- Develop distinctive products and services
- Benchmark your products against competitors
- Consider a “good – better – best” product strategy
- Set your prices
- Create your bare bones product – your MVP
- Gather feedback on your product or service
44 – Develop distinctive products and services
Just as I talked about differentiating your business – you want to extend this mindset to developing your products and your services. You don’t want to give your first focus to being better than your competitors. Instead you want to be different. As much as possible you want to avoid competing head to head with your competitors.
So as you think about how to structure your product and services consider how you can meet the needs of your target market in a different way than your competitors.
For example if you are planning a full service restaurant and all of the other best restaurants in town offer great dinners and lunches, then maybe you should consider offering a great breakfast. If you are planning a sporting goods store and there are already two competitors that sell new sporting goods then maybe you should consider selling used sporting goods.
Sure you should also give a lot of effort to delivering great quality products or services. But my experience in business is that you will be better served by first making your products distinctive, and secondly focusing on their quality.
IMPORTANT – Give first effort to making your products or services distinctive and second effort to making them high quality.
45 – Benchmark your products against competitors
As you strive to come up with distinctive products or services, think competitively. Which benefits, features or aspects of your products and services will be different from your competitors? Which will be similar? Which will be clearly better?
You don’t necessarily need to match all of your competitors’ features and benefits, but you should know where you stand. Use that information to make your own products and services both as distinctive and as sellable as possible.
46 – Consider a “good – better – best” product strategy
A common strategy among service providers and among some product companies is to offer three levels of products. This way you segment your market by price point and maximize both your sales and profits in each segment.
Well known examples are oil companies selling three different grades of gasoline; car washes offering different levels of car washes; clothing retailers having both full priced and discount priced outlets.
An extreme example is a friend who sells real estate investment seminars and consulting services. His entry level seminar starts around $200 and his highest priced consulting package is over $20,000.
You can offer different levels of products or services in almost any situation. You may decide to launch with the three levels or you may want to keep things simple as you get started and plan on adding more levels later on.
47 – Set your prices
You must have given a few thoughts to your pricing when writing your business plan. Now, it is time to choose an actual price… But first what is your pricing structure? Are you charging by the hour? By the project? Monthly? After answering this question, set the price for your product.
Don’t be scared to start with a high price! If you have a truly differentiated product I guarantee you people will pay good money for it. Try to charge as much as you can reasonably charge for your product and service. After all, you want to make profits!
48 – Create your bare bones product – your MVP
At this point, if you have not done it before, I suggest you consider creating an MVP or minimum viable product. What is an MVP?
An MVP is a extremely simplified, bare bones version of your product or service. A prototype if you will. You want to incorporate enough features so that your product or service satisfies your early adopters and your first prospects – but that’s it!
The MVP concept is to test if your product is viable while spending as little money and time as possible.
49 – Gather feedback on your product or service
After you get your first clients, gather some feedback. You can use this feedback to make your product and service better and more valuable for your target audience. Maybe this feedback will also help you discover an underlying issue you didn’t notice.
A good way to get that information is sending a survey a few weeks after the sale, using a tool like SurveyMonkey. For a guaranteed response, try offering something in return.
Investing some time in understanding your market and your customers can provide you with important information to create effective marketing. I know it might seem kind of academic – but I’ve found it can really help!
Here’s how to do market research:
- Find your best target customers
- Build your customer persona
- Identify your customers’ needs
- Map out a typical customer journey
50 – Find your best target customers
Before you start writing your marketing plan, you need to fully understand your target customer.
Try to answer questions like:
- Who are your target customers?
- What target customers are most likely to buy from you?
- What target customers are likely to buy the most from you?
- What are their motivations?
- What benefits are they getting from your products?
- What are their pain points?
The better you understand your target market, the more effective your marketing will be.
I would suggest you come up with a primary target customer group but also consider secondary target customer groups. You will likely find that different advertising messages and even different marketing channels work much better with one target market than another.
51 – Build your customer persona
Your customer persona is a composite picture of your ideal customer. Once you build this profile, it will be easier to visualize a clear image of your customer, and how best to reach your target market.
For example, for Bob’s Rent-A-Bike my typical customer was a married couple with kids. So here’s the customer persona:
Mary and Joe are 38 years old and have 2 kids, ages 7 and 10. They have a joint income of $130,000. They are vacationing for 5 days and did not plan on bicycling but are now considering it.
52 – Identify your customers’ needs
Once again having a customer persona can help understand the needs of customers – what product benefits they are most interested in.
Again, take the example from Bob’s Rent-A-Bike:
Mary and Joe have children so it is important that there is a bicycle available for each member of the family. But since they were not planning on renting bicycles, they don’t want to go through a lot of hassle to do so. So if they could get their bicycles to be delivered right to them that would be a huge plus.
53 – Map out a typical sales journey
Understanding the most common sales journey of your customer will help you understand how to structure your marketing and where to concentrate your effort. Do prospective customers do extensive research? How much do they comparison shop?
You should develop a well thought out marketing strategy and plan before you start your marketing efforts. But you’ve got to be ready to change your plan and try new approaches. Why? Marketing can be tricky! Even seasoned pros often fail with their marketing campaigns. But if you are nimble and try different approaches you will find one that works well for you!
Here’s how to approach your marketing:
- Get ready to test multiple marketing approaches
- Develop your marketing strategy
- Create your marketing plan
- Build your marketing message
- Design a logo, select a color theme, get business cards
54 – Get ready to test multiple marketing approaches
Marketing is an art – not a science. You never know what’s going work. Even marketing that works great for a competitor may not work for you at all. So what do you do?
You test. You test lots of different approaches. You test different ad media, different messages, different prices. You test everything. But don’t just throw out lots of tests randomly. Give each test your best thought – but don’t fall in love with any marketing approach until you are sure it is working.
WARNING – A big business secret is that marketing is hard! So test small amounts of money until it starts to click.
55 – Develop your marketing strategy
What are going to be the underlying principles or commonalities of all of your marketing efforts? Your marketing plan should work to support your overall business strategy and business plan. And it should work to reinforce the positioning of your products and services.
56 – Create your marketing plan
Now it is time to put your marketing plan together. It shouldn’t be hard! You’ve already done most of the work!
It is now time to gather it all!
To help you, here is a short list of the different key parts you should cover in your marketing plan:
- Target market
- Marketing goal
- Marketing message
- Marketing channels
- Marketing budget
- The creatives
How complex and detailed you should go on your marketing plan will depend upon the nature of your business. For example in my book publishing business each of the up to 200 books we published each year had a distinct audience and market. Hence we would do a separate detailed marketing plan – more like a small business plan – for almost every book.
On the other extreme, for a simple service business an effective marketing plan could simply be a list and budget of all of the marketing activities you plan on doing in the immediate future.
Keep careful records of how each marketing campaign worked. And keep altering your marketing mix until you find the best marketing solution for you.
57 – Build your marketing message
Start by crafting a marketing message that sets you apart from the competition and also develops a connection with your customers. Your marketing message should clearly explain what you do and more importantly what you can do for your customers.
Assuming you have created a unique selling proposition, that could be a good starting point for building a longer sales message. Don’t necessarily try to convey all of your product features in your marketing message – it’s more important to focus on just a few major benefits to your customers.
58 – Design a logo, select a color theme, get business cards
You can make your business more professional looking with a good logo, a consistent color scheme and by having business cards. For a simple business a simple logo is fine. But make it a good looking logo and a good looking color scheme! It will be used all the time in your marketing and will give your business an extra edge.
SET UP YOUR WEBSITE
Every business needs a great website! But it doesn’t have to be a big website. And it’s probably a lot easier to create a good website than you might think!
Here’s how to set up your website:
- Choose and register your domain name
- Plan your website
- Build your website yourself or outsource it
- Make sure you show up in search engines
- Get a company email address
59 – Choose and register your domain name
I’d try hard to get a great domain name and I would consider changing the name of my new business to match an available domain name. For example I bought the domain name “Everything.com” from Microsoft co-founder Paul Allen. I paid over $100,000 for this URL to help promote my book series called the Everything books.
Personally I would only consider a domain name where the “.com” is available unless I was starting a nonprofit in which case the “.org” would be better. The sooner you get your domain name nailed down, the better.
60 -Plan your website
For a lot of simple, small businesses a website needs to do just three things:
- Present the value proposition of your business
- Give a call to action
- Have a great appearance.
For example, the value proposition of your business may be why a customer should buy from you and not a competitor.
Your call to action could be a special offer, such as “Order today and get a 20% discount.”
You can give your web page a great appearance with some well done photos, perhaps of your business or yourself. Avoid stock photos. Carefully select attractive headline type.
You should also have an “about us” section, contact information and links to any social media platform you might be using.
Beyond that you may want to consider listing customer testimonials and/or showing projects you have done for previous customers (once you have some).
A great website may be very small. Even a one page website is fine for many small businesses. Although some websites, such as those selling products directly online, will be more complex.
INSIDER TIP – Even a tiny business should have an awesome website. But it could be a simple website – one page might be all that you need.
61 – Build your website yourself or outsource it
It’s easy to build your own website with “drag and drop” technology which is offered on plenty of website platforms that are either free or very inexpensive, such as SquareSpace and Wix.
Or you can hire a third party developer to do all the work for you.
Pre-made templates are available on most website building platforms. Again they are particularly handy if you don’t know a lot about coding. There are many really great template designs available.
A content management system or CMS will be an important tool if you are building a larger website. A content management system (or website building platform) is a user-friendly platform for building websites and managing your own online content, instead of using a bunch of unrelated HTML pages.
The main CMSs on the market are WordPress and Jommla!. WordPress is much more widely used by small businesses.
Make your website mobile friendly. The majority of website traffic is from mobile devices. The simple way to make your website look great on all devices including desktop, laptop, tablet and mobile is to have a so-called responsive website design, meaning the website adjusts to the device being used.
Choose your web hosting service. Years ago I hosted my websites on my own servers but today almost everyone outsources web hosting and so should you. Popular options include Bluehost, Ipage, Hostgator and Amazon.
62 – Make sure you show up in search engines
Wouldn’t it be great to be on the first page of the search results of Google and get plenty of customer leads for free?
Well, with a little bit effort you can rank near the top of search results – especially if you are a local business, because Google and other search engines place a high ranking criteria on location.
You want to think about search engine optimization (SEO) for every single page of your website before you start building it. Some of the most important factors to consider to get your pages to rank well in search engine results are:
- Headlines and subheads
- Links from other websites
- The location of your business
- The mobile friendliness of your website
- The loading speed of your website
Google and other search engines use secret and constantly changing algorithms with as many as 200 factors to determine search engine ranking but some factors, such as the ones listed here, are much more important than others.
Especially for a local business, you should set up a free Google My Business account. You will get a free business profile and it will help you show up on maps and in searches.
Once your website is up and running you can find out how many people are visiting each page of your website by setting up Google Analytics which you can use for free.
63 – Get a company email address
Consider adding credibility to your emails by using your own business name in your emails. Google is one company that provides this service. Interestingly I heard that a small startup was not allowed to post job openings at Harvard University because they did not have their own email address.
CONTENT MARKETING: BLOG, SOCIAL MEDIA, EMAIL
Content marketing means using text, pictures or videos to build an audience on the Internet. The bigger and more loyal an audience you can build, the more likely you will be to sell your products or services. Content marketing includes blogs, social media and email. Often companies use similar or identical content on all three.
The great news is that content marketing allows you to attract and build an audience without spending any money.
Here’s how to do content marketing:
- Consider writing a blog
- Register on social media
- Build a social media presence
- Build an email list and promote to it
64 – Consider writing a blog
Companies of all types and sizes have a blog to promote their business. Usually it is part of their website, but it may be self standing. Some companies post new articles daily, some monthly, and some only sporadically.
Here are the benefits of writing a blog:
- Build a connection with your audience
- Establish credibility and authority
- Become recognized for your expertise
- Get ranked on more search engine result pages
- Drive more traffic to your website
- Blog posts can stay up forever
If you do decide to write a blog, I recommend fewer and better posts. I also recommend sticking to a regular posting schedule.
65 – Register on social media
Similarly, consider registering your business on all the major social media platforms. Even if you end up not using the platform, it doesn’t cost anything to get a free profile on it. Here are a few examples of social media platforms you want to be on. Facebook, Instagram, Twitter, Reddit, YouTube, and Snapchat.
A LinkedIn profile may be an especially useful tool if you are selling to a professional audience.
66 – Build a social media presence
I suggest you initially just focus on one, two or, at the most, three social media platforms where you believe your target audience is most active. It can take time to build a loyal and significant size audience on social media.
Furthermore while it is easy to get excited about building a list of followers on social media, it’s not the same as building a list of customers. Often it is difficult to convert social media followers into paying customers. Some businesses find that social media works best for reinforcing their presence with existing customers rather than directly pulling in new customers.
Also, social media is increasingly becoming a “pay to play” game and usually your social media posts will only be seen by a few hundred people.
WARNING – Don’t get carried away spending too much time on social media. Many small businesses find it hard to develop a sizable following on social media and to turn followers into customers.
67 – Build an email list and promote to it
Email has a lot of advantages over social media. A big advantage is that you own the list. So you can email everyone on your list. Whereas social media companies typically limit the visibility of your postings to a small portion of your followers.
With email you can basically send whatever you want. And you can send it whenever you want. In my experience emails are more likely to lead to sales than social media postings.
You can have a service collect email addresses on your website and send out email campaigns for you. For example you can open a low volume account on Mailchimp for free.
Digital advertising is a breakthrough marketing tool for small businesses.
Digital advertising means that you can zero in on the audience that you want to reach. Furthermore digital ad platforms have tiny minimum advertising levels. This is awesome because it means you can test a bunch of different ad approaches while still spending very little money. On top of that digital ads can be easy to create. You can design them yourself.
How to approach advertising:
- Consider search engine advertising
- Consider advertising on Google, Facebook and other networks
- Build a great landing page
- Be wary of buying expensive traditional media advertising
- Come up with your creatives
IMPORTANT – Even though you can run very inexpensive digital marketing tests, you don’t want to be sloppy about it. Strategize and plan carefully.
68 – Consider search engine advertising
Search engine advertising on Google and other search engines is great because you can zero in directly on your best audience at a moment when they are likely seriously considering buying a product or service. Search engine ads are easy to create and place.
Plus you typically buy search engine advertising on a cost per click basis (CPC). That means that you only pay for your ad if someone actually clicks on it. Search engines sell ads through on-going auctions, with the price of the advertising constantly changing depending upon the demand.
Sounds great! So what’s the catch? The issue is that everyone in the world is trying to buy search engine advertising so for most search terms it’s expensive, and may not be profitable for your situation.
69 – Consider advertising on Google, Facebook and other networks
There are many places you can advertise on the Internet. But Internet advertising is increasingly dominated by companies such as Google and Facebook that sell advertising not only on their own hugely trafficked websites but also on many third party websites. Advertising on these networks, also usually bought on a cost per click basis, is generally less expensive than search engine advertising.
Ad networks like Google and Facebook know a lot about their audiences. This means that you can target your audience based upon specific behaviors and characteristics.
The rules for ad design on these networks can be strict – for example, limiting the size and amount of text. But you can usually run video ads as well. This might be worth considering if you can produce a good looking video.
70 – Build a great landing page
Your success with marketing, especially digital marketing, may all come down to how effective a landing page you have. On the Internet it’s a lot easier to build an audience and increase interest than it is to close sales. So a landing page that moves people along the sales journey is especially important.
An effective landing page should:
- Flow smoothly from the ad
- Be instantly understandable
- Be easy to navigate
- Have a clear call to action
- Work in mobile and desktop
- Have an attractive design
By thinking about the sales journey of your typical customer and by experimenting, you can determine the ideal copy and call to action to have on your landing page.
71 – Be wary of buying expensive traditional media advertising
It’s quite possible traditional media – such as radio ads, cable TV ads, billboards, transit ads, direct mail or even print ads – might work for your business. But be cautious because with traditional media it is usually difficult to test with very small amounts of money. Buying a traditional ad that doesn’t work could be an expensive mistake.
72 – Come up with your creatives
You can hire experts to create your digital advertising for you. But you can also do it yourself. If you’ve ever taken a picture with your camera or shot a short video, you have what it takes to create your own digital advertising.
Think through your target audience and the message you are trying to deliver as you work on your creatives.
Consider isolating and testing one variable at a time. For example, try the exact same ad copy twice, but with a different image.
I was so scared when I went to make my first in person sales calls that I developed an instant stutter! But my sales pitches worked anyway and my business was a success! Believe me, even if the last thing you want to do is make sales – you can do it – and you can use sales to drive your business to success!
Here’s how to make sales:
- Establish a sales strategy
- Optimize the sales process with a CRM
- Find sales points
- Prepare the sales script and responses to objections
- Develop your sales materials
- Search for prospects and generate leads
- Make phone calls, send emails, set up appointments
- Follow up with prospects
- Make it easier for the customer to say yes
INSIDER TIP – Any business owner can learn to sell even if you think it’s the last thing in the world that you could possibly do.
73 – Establish a sales strategy
Many businesses can hugely benefit from personal selling. Even a largely digital business may significantly increase sales by using phone or email contact to close sales.
Selling can take many forms. It may be in person, accepting inbound phone calls, making outbound phone calls, personal emails, text messages or online messaging.
Think about the sales journey for your customers and where it might benefit from some type of in person selling.
Then think about who should do the selling. Guess what? It’s probably going to be you! Often the entrepreneur is the best salesperson for the business. You may have no sales experience. But you have enthusiasm, right? And that can make all the difference in being successful at sales.
Like any business process, selling is a skill that can be learned. So follow my steps below to learn how to build your sales process.
74 – Organize the sales process with a CRM
Right from the start you want to be ready to save and organize all of your information on prospective, current and past customers. This is usually done by using database software called CRM for content relationship management. The best known CRM company is Salesforce, whose stock market symbol is “CRM.”
You might be thinking this is something to do later and for now you’ll just use something really simple like a spreadsheet. But especially because there are plenty of good CRMs you can get started with for free, there is no reason not to try one.
75 – Find sales points
Every product has its sales points! I know because it used to kill me when a good salesperson from a competitor was sometimes able to outsell us with an inferior product by finding a sales point that resonated with customers.
Your sales points should usually be directly inspired by the unique attributes of your product or service. What makes your product different? What specific pain point does it address? What makes you better than competitors?
Sometimes you can create strong sales points by finding a fresh way to emphasize a basic product feature or benefit that is common to all products in your category. Experimentation is the best way to find out what will work.
76 – Prepare the sales script and responses to objections
When you get the decision maker on the phone, you want to feel prepared. I recommend you write a script of a sample sales call. Having a script can build confidence, especially when you are getting started. When talking to a prospect, every word makes a difference. But don’t sound like you are reading your script.
You want to get to your sales points, but you should be conversational. For example, one of my advertising salespersons would start his sales call by saying “I think I have something that you are going to like.”
Anticipate and update a list of objections that prospective customers make to buying your product. Develop responses and over time keep track of which responses work best.
Try to get the prospect talking about what is important to their buying decision. Then if you can’t get the prospect to buy during the conversation at least try to set up the next step, such as the next contact time.
77 – Develop your sales materials
To support your sales efforts you need sales materials. Create a page on your website with your sales points to refer prospects to. Or if needed, print up a flyer. Include your product features and the benefits the product provides to users.
As soon as possible add customer success stories or testimonials to your sales pages or sales flyers. Because these are so important you may want to give a couple initial customers a discount in exchange for a testimonial.
Customer success stories and testimonials from customers are generally the most powerful sales tools. You want to start collecting customer success stories as soon as possible and get them in front of your audience.
78 – Search for prospects and generate leads
A common way to start generating leads is to buy company lists targeted by industry or geography. LinkedIn is also a popular way to find industry decision makers.
Consider trying to generate your own inbound leads – getting prospects to contact you. You can start with optimizing your website for search engine results, writing a blog, developing your social media presence, and doing advertising especially online.
You may also want to consider reaching out to friends and family, using your personal social media and offering a free webinar or seminar.
79 – Make phone calls, send emails, set up appointments
Selling really is a numbers game. You need to reach out to as many prospects as possible. Choose your approach carefully depending on the prospects. Making phone calls and sending emails are probably your two best bets.
80 – Follow up with prospects
Most sales don’t happen right after the first sales pitch. A few days after the sales presentation, you will want to follow up with your prospects. If in doubt, I suggest you follow up too much, too often, rather than too little, too late.
81 -Make it easier for the customer to say yes
Customers by nature are reluctant to buy. They are especially reluctant to buy from a business they have not used before.
Here’s a few ideas to help close the sale:
- Free estimates
- Free trials
- Free gift for taking trial
- Free tests and evaluations
- Money back guarantees
- No questions asked refund if not fully satisfied
ALTERNATIVE LOW-COST MARKETING
There are all kinds of alternative ways that you can attract customers without spending much or any money.
Usually it will take some creativity and energy to find the alternatives that work best for you. But once you’ve found something that works – it could work for a long time to come.
Here’s how to get sales without spending money:
- Offer promotions and incentives
- Try low-cost guerrilla marketing
- Seek free publicity
- Exhibit at trade shows, local fairs and charitable events
- Seek marketing and sales partnerships
IMPORTANT – Low-cost marketing can work! This is the kind of marketing that I used to build my businesses – not expensive advertising.
82 – Offer promotions and incentives
Often customers need a little extra nudge or reason to buy and to buy today.
Here’s a few ideas to ramp up your sales:
- Grand opening special
- New customer offers
- Limited time discounts
- Frequent purchaser discounts
- Incentives for making referrals
- Off peak time reduced pricing
- Buy one – get one free
83 – Try low-cost guerrilla marketing
I love guerrilla marketing – cheap or free creative ways to drive sales! Guerilla marketing is especially good for small companies with small budgets. But increasingly larger corporations are using guerrilla marketing too.
Here’s a few of my favorite guerrilla marketing ideas:
- Place posters on bulletin boards
- Pass out discount coupons
- Attend networking events
- Deliver flyers door to door
- Throw a business or product launch party
84 – Seek free publicity
For my book business I was able to get a lot of publicity. Often our books were featured on TV shows, on radio station talk shows, in the print media and on the Internet.
However, you can get free publicity for any business. You will need a “hook” to interest the media. Every business can come up with a hook that will appeal to some media outlet. The hook may simply be that your business is opening, adding a new product line, or hiring a new key employee.
Here’s a few quick tips to get free publicity for your business:
- Come up with your “hook” that will interest the media
- Write up a press release based upon your hook
- Develop a list of media to contact
- Send the press release out to the targeted media
- Follow up the press release with phone calls and emails
85 – Exhibit at trade shows, local fairs and charitable events
Industry trade shows are a great way to quickly build awareness especially if you are selling a product. In your local market you might be able to find appropriate events for promoting your products or services, such as local business expos, art and gift fairs, charitable event auctions, and even flea markets.
86 – Seek marketing and sales partnerships
A great way to jumpstart a new startup is to get a bigger company to sell your products or services. Another way is to do a joint marketing effort with another business. For example a local restaurant and movie theater could offer a package deal for an “evening out.”
Having a solid operations plan right from the beginning will help your business run more efficiently, save time, and avoid issues later on.
Here’s what you should think about:
- Choose your location and get it ready for business
- Get equipment and furnishings
- Set up customer service and support
- Line up suppliers, contractors and freelancers
- Obtain business insurance
- Establish your work schedule – even if working alone
87 – Choose your location and get it ready for business
Today your face to the world is probably going to be more your website than your physical location. So I suggest you consider starting your business in your home and saving a ton of money.
If your business does require a storefront to attract customers put first emphasis on getting a location with high traffic, preferably foot traffic, even if you have to settle for a smaller space than you had in mind.
Take a little time to set up your space nicely. It will help motivate you to do your best work.
88 – Get equipment and furnishings
I like to spend as little money as possible on overhead items such as equipment and furnishings. But I’ve found that if you get cheap equipment it can break down. And if you get cheap furnishings then your office looks shabby and it can be demoralizing for anyone who visits it or works there.
So what do you do? What I like to do is to buy really high quality stuff at bankruptcy auctions for pennies on the dollar.
89 – Set up customer service and support
Almost every business will require some customer service and support. For many businesses the quality of customer support will play a role in whether or not customers choose to do business with your firm or go with a competitor.
With everyone on social media today, both good and bad customer service stories can quickly get widely circulated. So you want to address any customer service issues quickly and thoroughly.
Even if you are starting a one person business, you should have a plan for handling customer service. Set up a plan for how you will respond to customers including what your policies will be for handling inquiries, requests and issues that may arise.
90 – Line up suppliers, contractors and freelancers
Give proportionate effort to sourcing, evaluating and comparing outside services depending upon how important they might be to the ultimate success of your business.
For example in the book publishing business our biggest cost was the printing of books. So we spent huge amounts of time both comparing and evaluating different book printers and also working with our printers – such as by changing our specifications – to reduce costs.
On the other hand, to choose our office cleaning service we spent just a couple hours, getting simple quotes from three different firms, then making our selection.
91 – Obtain business insurance
If you have any employees, you are required by law to have worker’s compensation insurance. Some states require additional insurance. For example New York requires disability insurance for employees. If you rent commercial space the landlord will have highly specific insurance requirements.
If you have outside financing they will likely require that you insure any property that they are financing. And they might require that you get life insurance that pays off their loans.
There are a number of other types of insurance that you may want to consider. Set up an appointment with a local insurance brokerage service and see what coverages they recommend for your situation.
92 – Establish your work schedule – even if working alone
When you hire employees it’s a lot easier to get them to stick to a work schedule if you establish it right at the beginning. But even if you are working alone, I find that a work schedule can make me feel more productive and accomplished.
It also reminds me to stop working at a certain time before I go crazy! But to be honest I’m not always so good at this – as I am writing this it is now 11:41 PM. Sometimes I just want to work until I finish a particular project no matter how late I have to work.
Accounting is one of those details of starting a business that may not sound exciting but you gotta do it! And believe me the sooner you set up your accounting procedures the better. It’s not that hard to do!
Here’s how to set up your accounting:
- Open your company bank account
- Consider a bookkeeping service, accounting firm and payroll service
- Set up your accounting system
- Set up payment procedures and policies
- Establish purchasing procedures
- Understand taxes
93 – Open your company bank account
It sounds like a simple step but don’t put it off. Especially if you are running an LLC, a corporation or a partnership you don’t want to mingle your finances and those of the business. Even if you are operating as a sole proprietorship I suggest you consider having a separate business bank account and credit card .
94 – Consider a bookkeeping service, accounting firm and payroll service
For a very small business I generally recommend that you do the day to day bookkeeping yourself – but you can hire a bookkeeping service if you really want to.
I also recommend that you put together your own financial statements – it will help you manage the business. For figuring out income taxes, especially if you have a complex product business, you may prefer to hire an accounting firm.
If you have even one employee, I strongly suggest you hire a payroll service, especially because there are several different payroll taxes that must be calculated and paid regularly.
95 – Set up your accounting system
If you are going to handle your own accounting, you could get a software package to help you. Or you could just do it using a spreadsheet. The key is being organized, not losing any information, and doing it regularly.
96 – Set up payment procedures and policies
Contact payment services such as Stripe and PayPal to be able to accept payments online. Your software platform or developer should be able to integrate your website with these payment services.
For a brick and mortar location you’ll need to get a payment terminal. Contact your bank or a credit card service to set this up.
Especially if you are selling to other businesses you may have to extend credit to your customers. If you have to do this, set up specific policies on how much credit you will extend and if you will require credit references. Also set up a plan for sending out statements, reminders and collecting payments from overdue accounts.
97 – Establish purchasing procedures
I have found that by purchasing carefully – such as getting multiple bids on important purchases – I can dramatically cut costs and increase profits. I also found that even when starting out you want to have solid purchasing procedures including written purchase orders – to avoid disputes with your suppliers.
98 – Understand taxes
Develop a basic understanding of what taxes you may be liable for.
Common taxes include:
- Federal income taxes
- State income taxes (in states that have one)
- Local income taxes (in cities that have one)
- Payroll taxes (including social security and unemployment taxes)
- Sales taxes
- Use taxes (when you buy items from out of state)
- Other taxes depending upon your situation
BUILD THE STARTUP TEAM
If you haven’t hired people before you may be surprised to discover that it takes a lot of effort to hire good people, motivate people and build a cohesive startup team.
But the good news is that great people, working well together, can propel your business ahead like a rocket!
Here’s how to build the winning team:
- Develop and budget a staffing plan
- Create job descriptions
- Post job openings and source candidates
- Interview job candidates and make the hiring decisions
- Create strategies and policies to motivate and manage your team
99 – Develop and budget a staffing plan
Decide what positions you need, what level of skills will be required and how much you are budgeting for each position.
100 – Create job descriptions
Having a comprehensive job description has multiple benefits:
- Job applicants like job descriptions
- It clarifies how the job fits into the organization
- It sets expectations for the applicant and the manager
101 – Post job openings and source candidates
Making great hires starts by building a large list of potential candidates.
To source candidates:
- Post job openings on employment websites such as Indeed and Craigslist
- Search for candidates on websites such as LinkedIn
- Network with friends and work associates to find candidates
- Explore online resume databanks
- Post signage if possible
102 – Interview job candidates and make the hiring decisions
You want to take whatever time it requires to very carefully make your hiring decisions.
Hiring steps include:
- Quick screening interviews
- More in-depth interviews
- Checking references
- Evaluating on key criteria
- Making the job offer
103 – Create strategies and policies to motivate and manage your team
As an entrepreneur it’s easy to forget that not everyone you hire is going to be as motivated as you. You’ve got to put some effort into selling them on the company mission, their importance to the mission and how you appreciate your work.
You also want to be up to speed and have good policies on important issues like equal opportunity, family leave, and sexual harassment, to help stay out of trouble. Creating policies may be tedious but it is an important step in starting a business well.
GROWTH & SUCCESS STRATEGIES
So how can you quickly grow your startup into a much bigger business and success story? It largely boils down to doing the initial steps on this list extremely well when you start out, making incremental improvements and constantly learning more to become an even better entrepreneur.
Here’s my key success strategies:
- Create a rock solid foundation for business growth
- Master productivity to get more done in less time
- Set goals and achieve success
- Master the #1 key to business success
104 – Create a rock solid foundation for business growth
If you really follow my advice in this article, your business will be based upon powerful strategies that will drive it to profitable growth.
You will start your business on a rock solid foundation. It will be highly distinct from other businesses and it will have strong competitive advantages.
You will be way ahead of most entrepreneurs on the path to making your business successful.
If you find that your business is not as successful as you had hoped, go back and review the basic points in this article.
Don’t hesitate to redo any aspect of your business that doesn’t seem to be working. It’s OK to make mistakes in business – as long as you go back and fix them!
INSIDER TIP – The best way to make your business highly successful is to start on a rock solid foundation. So learn how to start your business right and take the time to plan it carefully.
105 – Master productivity to get more done in less time
Entrepreneurs starting a business can feel overwhelmed and then start quickly jumping back and forth from one task to the next. Some call this multi-tasking – I call it a mistake.
I find the most powerful way to organize my time is to overwhelmingly focus on just one key task each day – and do it really well. Sure, some urgent things might pop up that I might temporarily divert to, but by having one key focus I manage to accomplish what really matters and drive my business ahead.
106 – Set goals and achieve success
Another key to business success is careful goal setting. Just having an annual goal isn’t enough. Instead I suggest shorter goals such as 90 day goals. Your goals should be specific, achievable and measurable. Examples might be “making your first sale” or “building your website.” Goals can motivate you and help get you into high gear!
107 – Master the #1 key to business success
What’s my #1 tip for business success?
Keep learning. Learn all you can. Learn all the time. Success favors those who take the time to learn.
To learn more about how to start a business check out the courses at BusinessTown – which you can try for free. Click here to explore BusinessTown.
Frequently Asked Questions about Starting a Business
How do you start a business?
- Find a business idea
- Put together a budget
- Write your business plan
- Develop your product or service
- Create your website
- Start your marketing
What do you need to start a business?
- Drive and energy to succeed
- Time to plan and set up a business
- Money to support you until you break-even
- Knowing the basics of what to do
- A great business idea
- A solid business plan
What are the cheapest businesses to start?
- Dog walking
- Personal trainer
- eBay selling
- Chef for hire
- Social media management
- Professional organizer
What are the best home based businesses?
- Amazon store
- Jewelry making
- Home bakery
- Starting a blog
- Yoga classes
- Home tutoring
- Room rental
- Music or art lessons
Yes! I know this article covers a ton of stuff to do! But from my experience starting 17 businesses, this is how you do it! You invest a lot time and energy in starting your business – doing every aspect as well as you possibly can!
If you take the time to start your business really well, you’ll end up with a great business that will richly reward you in the years ahead.
Start Streaming the Courses on BusinessTown
Learn how to start and run your business by watching the many courses on BusinessTown including Start-a-Business 101, How to Create a Business Plan and The Complete Guide to Digital Marketing. You can try BusinessTown for free.