STARTUP: YOUR PERSONAL GUIDE FOR MAXIMIZING PROFITS
The Startup EntrepreneurBeautiful Woman store
When you are a business owner you are also an entrepreneur.
An entrepreneur operates or is involved with a business’s operations.
Startup entrepreneurs are innovative business owners who often capitalize upon new trends and opportunities,
so they can provide something new to the world or offer it in a new way.
They are also willing to take risks.
Their main objective is to earn as much money as their talents allow.
Me ? An Entrepreneur ?
You do not need a college degree or any special training to be a startup entrepreneur.
In fact, some of the most famous and successful entrepreneurs dropped out of school (although I do not encourage this!).
The example of people like Andrew
Carnegie and Mark Ecko shows that anyone can be an entrepreneur; you just need enough drive and the motivation to carry you through.
Are you an entrepreneur by nature ?
If you don’t think you are, there’s no need to worry.
Some people are more naturally suited to become entrepreneurs, but anyone who really wants it enough can undoubtedly become one !
Habits of A Startup Entrepreneur
Here are some traits commonly found in entrepreneurial individuals:
You have a roaring, insatiable, and creative mind – you are constantly doing and creating.
You’re always coming up with and exploring new ideas and fresh ways of doing things.
You dream big and are willing to do whatever it takes to make those dreams come true.
You can easily identify a flawed idea when you see one.
You constantly think of ways to make things better and you generally
want to help others.
You want to do the right thing.
You have a well-disciplined mind.
You don’t like taking orders from others; you’d rather be in charge of things.
You reflect on your experiences and look for “lessons learned”
so you can improve yourself.
You’re naturally open to learning new things and discovering fresh
perspectives for things you already know.
You enjoy getting an early start to your day so you can get more accomplished;
You tend to go to bed at the same time every night.
You’re most interested in how existing businesses function;
you want to probe their inner workings.
You’re not discouraged by constructive criticism;
you are open and highly responsive to feedback.
You stand up to adversity and do not let any challenge or roadblock
get in the way of reaching your goals.
You also recognize the value and reward of hard work.
You constantly seek challenges.
You’re able to accurately identify your strengths and you know and admit to your weaknesses. You enjoy setting goals and creating daily routines.
You set yourself a deadline for each goal you are pursuing.
You exercise and maintain a healthy diet to keep your mind and body in peak condition, so that you can work productively.
You embrace risk and you’re not afraid of meeting new people.
You have highly disciplined time management skills.
Others can set their watch by you.
You don’t let failure discourage you or hold you back.
You’re passionate about making your dreams come true,
regardless of any obstacles you encounter.
You ask the right questions, questions that will equip you to get ahead.
You’re a planner; you always have to have a plan for your day.
You’re a delegator; you know the perfect people and trust them to help with your plan.
You’re a competitor; you prefer to be in the lead.
You have the ability to say “no” to things you’re not comfortable with or things you believe are a waste of your time.
You can see the potential in other people and work to help them be successful.
You respect others, regardless of their personality, culture, or beliefs.
You’re confident in your skills and abilities.
You remain calm in adverse situations and are able to make decisions based on logic and facts, rather than emotions.
A Startup, Defined A startup is a business that starts out new and small, but has the potential to become highly successful.
Startup entrepreneurs often launch a business in hopes of providing a new product or service that can help others, regardless of how much – or little – money it will generate.
Frequently, a startup will exist for a couple of years before it begins to gain a reputation, let alone generate a profit.
While the goal of a startup entrepreneur may not be initially to make tons of money,
a startup entrepreneur usually holds a vision of his or her business idea eventually
dominating the market.
A new business is usually considered a startup for the first three to five years, or until it merges with another larger company, expands to an additional location, gains more than 75 employees, and/or has generated a significant profit.
Your Startup Idea
There are many types of businesses you can create, but some are especially popular
options as startups.
The great thing about starting your own business is that there are many industries
from which to choose.
Each type of business has its advantages and disadvantages.
Some, most notably sales ventures, will require you to have more experience than others before you can become profitable.
Some businesses require little to no money to start, while others will demand considerable capital up front.
However, with the right amount of motivation, determination, and research, you can build a profitable business in any industry.
Basic Business Types Retail
businesses generally operate a storefront to sell products.
Examples of retail businesses are clothing stores, book stores, jewelry stores,
cell phone stores, etc.
Retail businesses can also exist as online storefronts.
There are many easy ways to set up your own online storefront through services such as PayPal and Shopify.Beautiful Woman store
You can also sell via a third-party online storefront, such as Craigslist or eBay.
Wholesale businesses allow you to buy large quantities of products directly from manufacturers to sell to smaller retail shops.
For example, a wholesaler may sell a certain brand of soda products to a grocery store
or a certain line of pastries to a restaurant.
These retailers then turn around and sell the products to their customers.
Franchises are what you buy when you purchase a license to sell products
or services owned by an established, existing company.
Fast-food restaurants are a popular type of franchise.
Entrepreneurs will often buy a group of restaurants from a single franchise so they can operate in multiple locations.
While franchises can be very profitable and highly successful, owners must often pay franchise fees and royalties to the franchisor and abide by specific terms
set by the franchising company.
Service-specific businesses are attractive as startup companies,
because they do not require as much launch funding as other business types.
You can often work for yourself if you’re a skilled expert in a given field.
Freelance writing, construction, and financial consulting are some of the most popular
service-specific business types.
Expert professionals, such as doctors,
dentists, and lawyers are also considered service businesses.
Sometimes a service-specific business will also fall into the sales category.
For example, a dentist may offer top-of-the-line toothbrushes for sale,
in addition to providing dental services.
Digital businesses are popular as startups because they tend to require
the least amount
of money to start and will require little more than the use of a computer
with internet access.
Many freelancing businesses fall into this category.
Any type of service that can be performed from a remote location
is considered a digital business.
Assembly-based services also make for great startup companies.
In this type of business, a person or team of people will subcontract projects from larger manufacturing companies.
They will assemble, package, or otherwise combine a product that is already in existence,
for final sale.
Sales businesses that sell makeup or clothing products through reputable companies
like Avon or Posh are another startup option.
Your line of products and your target audience may be somewhat constrained
by the type of product you’re selling.
If you’re good at arts and crafts, selling your own creations can provide another
Many artists and craftsmen sell personalized mugs, t-shirts, jewelry, and other accessories through brick-and-mortar and online sales platforms.
Remember, a startup is either a business that sells a brand new product or one that offers an existing product or service in a brand new way.
It’s important that you avoid copying an already existing business idea.
Your idea must be different enough from everything else in the market that it qualifies
as a new idea.
What is Your Industry ?
Your industry is basically a way of classifying your business.
There are several reasons you should know your industry inside-out.
First, it gives you an industry profile that will help define your business within that industry.
An industry profile provides key information about the industry you are entering.
It includes a forecast of where your type of business will be headed in the future.
This information helps you make smart decisions about the viability of your business idea. Before you commit to this specific idea, you will want to research the related industry to determine if the business is even worth pursuing.
The list of industries is fairly standard.
The main categories consist of:
Consumer service businesses.
Energy and utility businesses.
Real estate and construction businesses.
For example, a networking service business would fall under the classification
of business services.Beautiful Woman store
If you wanted to start a limousine company, your industry would be transportation.
If you wanted to sell your hand-made jewelry it would fall under a retail classification.
Once you’ve narrowed down your business type,
you will want to research that specific industry to determine if your idea has the potential
for a successful launch and a profitable lifetime within that industry.
for a successful launch and a profitable lifetime within that industry.
Clarify Your Idea After you have familiarized yourself with your chosen industry, the next step is to clarify your startup idea, if you haven’t already.
The possibilities for startup ideas are endless.
It may take some research and time to come up with an idea that is unique, but your work will be worth it; all of your research will only add to your knowledge of your chosen industry.
Take the time to consider items that are currently trending, especially with
a technology-based business idea.
For example, you wouldn’t start a business selling a new cassette tape player in the year 2017 ! However, if you wanted to start a video-streaming service that also downloads the videos to your television, this might be a viable option.
To keep on top of the wave of current trends, you’ll also want to consider what streaming services and television technology will look like over the next five to 10 years.
You’re looking for an idea that will succeed not just in today’s market but over the long-haul. It must be able to be changed, upgraded, and restyled to follow shifts in industry focus and popular trends.
What’s Your Business Category ?
If you’ve already settled on your startup idea and have researched it to test its feasibility
in the market, congratulations, you’re a step ahead of the game !
Feel free to skip this section.
However, if you have not settled on a viable idea, or if you want some help thinking through all important aspects of your business idea, this section should be of help.
While you probably won’t come up with a fully developed concept overnight, here are some business categories that are promising.
Delve into what interests you and work through it until you have come up with
a unique startup venture: Application software.
Box delivery businesses.
Consulting or coaching.
Contractor or handyman.
Electronics repair Food-based ideas.
Gardening and landscaping services.
Health and nutritional services.
Kid-friendly products or services.
Social media based businesses.
These are just some ideas to help get your creativity flowing – the possibilities for new businesses are endless.
Start With Your Passions In my experience, I’ve discovered that some of the best business ideas, literally come out of nowhere.
In addition, some of the very best ideas are surprisingly simple !
You may want to play the “what-if” game, asking yourself questions
to spark a new idea.
Keep your eyes open when you’re out and about;
look for ways to improve existing products or services.
Try to find a need that is just crying out to be filled. Include your talents and passions when you brainstorm. If you can identify a talent or passion and find a way to make it your life’s calling, you are more likely to experience success and happiness as an entrepreneur.
It’s easier to succeed when you’re working within areas of interest and desire.
When you do for a living something you love and are passionate about, it’s a hundred times easier to motivate yourself to get up every day and keep
working until it pays off !
How Good’s Your Idea ?
Once you’ve come up with a really great startup idea, you will need to prove that it has the ability to be profitable.
Your amazing idea just may be too far ahead of its time.
You may discover that the capital requirements are too costly right now to make it
a profitable venture.
You’ll want to test the feasibility of your idea.
A friend of mine once came up with an idea to invent car windshields that would
turn dark when in contact with the sun; it’s an idea similar to light-sensitive eyeglasses.
Unfortunately, he soon discovered that it would be too expensive to manufacture.
He also learned it would conflict with the states that have regulations prohibiting
tinted car windows.
I suppose you’re wondering exactly how you can determine if your business idea is feasible. Well, that’s why we have the feasibility report.
The Feasibility Report One of the best ways to test the viability of your great idea is to research and prepare a feasibility report.
The feasibility report will provide an overview of your business idea,
and describe your chosen market.
It will help you estimate the finances you will need to turn your Idea into
a sellable product.
This report will take into consideration issues such as whether you have the necessary skills to successfully bring your idea from initial concept to reality.
It also will note any governmental regulations that could stand in your way and will describe what it will take to overcome them.
This information will put you a step ahead when it comes time to write your business plan and will also help you when you set out to pursue financing.
We’ll discuss these activities in future chapters, but for now, it’s enough to know that a highly detailed, thoroughly researched, and well-thought-through feasibility report
will be worth your efforts.
If the numbers work out and everything makes sense, you’ll already be a step ahead when it comes time to create your actual business plan.
In the beginning of your feasibility report, it is important to briefly describe your potential business idea.
Include what will make it stand out from similar existing items.
Next, list each of your initial products and services and in a couple of sentences describe each one accurately.
Then, you can focus on these sections of the report:
Know Your Market Under the market section of your feasibility report, you should be able to answer the following questions: Is there a demand for my product or service ?
Does my industry analysis look promising ?
Who is my target market audience ?
How can I eventually expand my target audience ?
How does my product or service stand out from the crowd ?
Why will my target market audience want to buy from me ?
Who are my competitors ?Beautiful Woman store
What advantages do they have over me ?
What advantages do I have over them ?
What other marketing obstacles do I need to consider ?
Your Financing Overview
Under the finances section of your feasibility report, you will answer the following questions: How much capital do I need to get this off the ground ?
How easy will it be to acquire capital ?
How will I finance my business during its initial stages ?
What are my fixed costs ?
My variable costs ?
How many products or services per customer do I expect to sell ?
Will I be able to make a profit ?
How much will it cost to increase my customer base ?
What is the pricing strategy for my products and/or services ?
What does my sales forecast look like?
How promising is my return on investment ?
This section of your feasibility report will include more factors that have the potential
to impact your profitability.
Here you will want to include descriptions of the following: Location.
Required licenses and permits.
Intellectual property rights.
Necessary skills and training.
Hiring needs and availability.
Anything else you can think of that pertains to the feasibility of your business.
After you’ve created your feasibility report, you’ll want to read it back to yourself.
Do the data show that your new idea has the possibility of surmounting the all risks and obstacles to become profitable ?
Will it be able to withstand the test of time ?
If the information in this report indicates that success is probable, you have a viable business idea on your hands !
If something doesn’t match up or the numbers don’t reflect sufficient growth potential,
you may need to revamp your idea or select a new one altogether.
Bringing Your Idea to Life
At this point in your journey you should now have a feasible startup business
idea and be ready to bring it to life.
It’s very important to be realistic with yourself when considering the ideas
provided in this chapter.Beautiful Woman store
Otherwise, your business may not stand a chance when you transfer it
to the real world.
Visualize It In my experience, I have found that the art of visualization is a powerful technique to help bring any idea to life.
Visualization is the act of mentally imagining yourself stepping through the process of successfully reaching an objective.
The more you practice visualization and the more details you can build into your mental picture, the more likely you are to be successful at achieving it in reality.
When you visualize your dreams daily, it motivates you to take initiative that will eventually lead to the results you want.
If you’ve chosen an idea that the numbers show can be successful, and if it’s something you’re passionate about, you’ve probably been practicing visualization already, without even thinking about it..
To visualize your dreams most effectively, include all of your five senses – sight,
sound, touch, taste, and smell.
Imagine what your product, office, or logo will look like when everything is
up and running.
Visualize yourself hearing impressive feedback from your customers and receiving constructive criticism that will make your product even more successful !
Imagine every detail to make your visualization experience amazing.
The more detailed you are, the more likely you will be to achieve success.
Resources To bring your idea to life,
you should identify the resources necessary to launch your business.
You’ll want to list these resources in preparation for the day you will need to make an expense list for your financial plan.
While you’re visualizing your successful business operations, pay close attention to each item you use in the process of creating your product or setting up your service.
These are the resources, or expenses, you will need to include in your resource list.
Can you run your business out of your home or will you need to rent office space ?
Your business location is an essential resource, so include it first in your resource list.
Can you manufacture your products using simple items you can buy in a craft shop,
or will you need to bulk order high quality raw materials ?
You’ll want to include each detail in your list.
Next, you will take your resource list and research the cost of each item.
Yes, it will take time, but the more accurate your cost analysis, the better you will be able to realistically predict all other aspects of your business.
You’ll want to check several suppliers, banks, real estate agencies, and other sources to first gain a ballpark figure; then you can pursue the best possible deals for each resource.
Even if you don’t start spending money right away, your research will help you formulate an accurate startup budget.
Choosing Your AlliesBeautiful Woman store
Things can quickly become overwhelming in the business world, especially
for first-time startup entrepreneurs.
If you’ve never experienced full autonomy at work or known what it’s like to run a business all by yourself, you’re in for some pretty big changes to your life.
What can save you is the knowledge that you don’t have to go through this alone.
There are four key allies who can help to ensure that you have a great experience during the early days of your startup.
These allies consist of your mentor, your lawyer, your accountant, and your banker.
Having at least one ally in each of these categories can go a long way toward
smoothing your path.
It also shows potential investors that while you may not be an experienced entrepreneur,
you have solid advisors working with you.
Mentor An experienced business mentor can be especially
helpful for first-time startup entrepreneurs.
A mentor is someone you can turn to for feedback.
Your mentor can serve as a sounding board; a mentor’s experience and wisdom can prove invaluable as you delve into the uncharted territory (for you) of starting a business.
Mentors are the perfect allies for those times you run head-on into a challenge
and you have no idea where to turn next.
A mentor can be a great source of moral support when it comes to launching
your first startup.
I was lucky enough to meet the woman who became my business mentor during my internship, but if a mentor doesn’t fall into your lap,
here are some ideas that may help you find one: Network, network, network.
Put yourself in social situations that lend themselves to meeting other like-minded entrepreneurs.
My dad always told me the best way to get someone to talk to you is to offer
to buy them a cup of coffee.
Offer a promising potential mentor a cup of joe in exchange for answering
a few business-related questions.
Make yourself visible to other business owners by attending workshops and seminars and by introducing yourself to other attendees.
Use LinkedIn to look for potential advisors.
For example, if you want to launch a software startup, you can go to LinkedIn and use the search function to locate somebody in your area with a software and business background.
Then, fire off an introductory email explaining your situation and asking if they’d be open to consider serving as your mentor.
How to Build a Mentorship Even if you’ve found somebody to be your mentor, you cannot expect the mentorship to blossom overnight.
Like any other human relationship, the bond with your business mentor will take time to develop and will require work to maintain.
You’ll want to be sure the person you’ve picked has enough time to devote to mentoring you.
Business owners tend to be short on time.
If you can’t get your prospective mentor to meet with you for a measly half hour a week,
you may need to look for someone else.
Once you’ve found the right match, both of you should agree on how often you’ll meet,
how many meetings you’ll commit to for this first period,
and what topics you’ll be covering together.
Even after the formal period of meeting together is completed, you may be able to interact less frequently,Beautiful Woman store
although I find that business mentors often become friends for life.
Lawyer It may come as a surprise that you will need a lawyer
to enter into any kind of business.
I didn’t even think of a lawyer when I launched my first sole proprietorship, but a couple of years later, I discovered why having one is so important.
An attorney with knowledge of business law will be able to advise you on everything from the trademarking of your business name to whether or not you can legally run a business out of the location you’ve selected.
There are many laws surrounding the digital side of your startup.
of use page on your company website.
Both of these are demanded by law and require very specific wording.
It will also be to your benefit to have a business lawyer in place, in the event of a lawsuit or other legal action associated with your business.
You’ll want to face any legal challenges with an expert by your side who knows
the law and is thoroughly familiar with your business.
An attorney in your pocket is also great preventative medicine.
Many first-time startup entrepreneurs make the beginner’s mistake of procuring
the services of a lawyer only after a lawsuit is filed against them.
The problem with signing on a lawyer after the fact is that you probably missed
the opportunity to prevent the lawsuit from occurring in the first place.
Now, you’re responsible for the resolution of the problem,
which will likely cost you a pretty penny.
Had you put that money toward a lawyer in the first place, your legal counsel may have been able head off potential disaster by pointing out ahead of time the problem that has gotten you into hot legal water.
A quality attorney will also advise ways to remedy a potential disaster before
problems can arise.
When you are searching for a lawyer,
you will discover there are certain important factors to consider.
The majority of business lawyers specialize in specific areas of business law
and their fees vary widely.
Larger law firms are able to provide excellent lawyers who can specialize in multiple areas of business law, offering you amazing protection.
In addition to providing protection from potential lawsuits, business lawyers can help you navigate the waters of contracts, zoning issues, licenses/permits, copyrights,
trademarks, and intellectual property.
Accountant If there’s one thing you should never attempt by yourself in the world
of business, it’s your taxes.
Personal taxes can be confusing enough if you aren’t an accountant.
As you will soon discover however, businesses are taxed differently than individuals.
The tax calculations for a business are much more complicated,
so it’s best to leave this part of your business to the professionals.
Then you will be free to focus on what you do best, the successful
running of your business.Beautiful Woman store
In addition to helping you pay your business taxes, your accountant can help you with your financial statements, balancing your books, and planning for future taxes, all of which are basic to successful financial planning.
We’ll talk about this in greater detail, toward the end of this book.
When your startup is small you may be able to handle most matters yourself if you have some knowledge of taxes.
If you hire a tax consultant to guide you, you can save a little money, initially.
A sole proprietor can usually learn how to send in estimated tax payments to the government, since this is pretty much all that is required of that type.
However, as your startup grows and your legal structure develops, I can’t emphasize strongly enough the importance of hiring an accountant to handle tax matters for you.
It’s easy to fall into legal trouble if everything isn’t done the right way the first time around, so in the end, paying an accountant will be worth every cent.
Banker Again, you may be thinking that having your own banker for business matters is unnecessary, but a banker can actually be a useful ally.
You may initially need only a separate checking account or help applying
for a business loan.
In the long run, however, a banker can simplify matters for you.
You may start out with no need for payroll arrangements,
but when you begin to add staff, your banker is the person who can help you set up accounts to best manage your affairs.
A trusted banker who knows your business can also serve as a financial advisor, helping you avoid potential pitfalls and explaining ways to anticipate and manage various business challenges.
Before you delve into determining your legal structure, it can be helpful to consider your organizational structure.
Your organizational structure will reflect how your operations flow from founders to employees and everyone in between.
First, you want to ask yourself,
“Who is involved in the business ?”
Are you the sole owner and operator ?
Are you working with one or more partners ?
Do you have any employees who will be working under you ?
Knowing your organizational structure can simplify the process of choosing
your legal structure.
If you operate your startup alone, a sole proprietorship or single-member
LLC structure is likely your best choice.
If your startup must include multiple managers and employees from the very beginning,
an LLC or corporation structure is probably best.
Legal Structure The legal business structure you establish will determine how your business is taxed and it will outline your level of personal liability.
Many startups and small businesses begin quite simply.
Depending on the circumstances of your business, it may expand and be restructured
over time, or it can continue to operate in its original form.
The most common business structures are sole proprietorships, partnerships,
LLCs, and corporations.
To be continued