This is the second post in a two part series on concrete steps you can take to make your entrepreneurial dreams a reality.
Develop Your Business Plan
No matter what type of independent business you’re contemplating, putting together a comprehensive business plan will help you to clarify and research your new offering, will provide a framework for growth over the first three to five years, and will be an important tool in your conversations with potential partners and investors. Typical business plans include a vision statement – or your beliefs about what the business should be and what you see it becoming – a mission statement, or what your business will provide and to whom – and a situation analysis, or the current status of the market.
It should also incorporate an operations section – where you’ll detail how you’ll run the business – a marketing section, where you’ll detail how you’ll let people know about your business – and a sales section – where you’ll detail how you’ll recruit new customers and retain existing ones. You’ll conclude with a finances section that will include your budgeted costs and how your business will turn a profit.
Many fledgling businesses fail due to a lack of startup capital. However, you don’t have to have a trust fund or a rich relative to get money for your new venture. There are many types of grants offered to new entrepreneurs, including individual grants, business grants, and government grants. State development agencies and community banks, for instance, frequently provide financial assistance to new business owners.
If you have a solid business plan and excellent negotiation skills, you can also try to interest an angel investor, or a high net-worth individual who invests in new companies, usually at an early stage. Like institutional venture capital firms, many angel investors provide cash to young companies and take equity in return.
Seek Experienced Counsel
As a new entrepreneur, it’s essential that you recruit a more established mentor to offer wisdom, advice, connections, and moral support. A good mentor might be in your industry, or another entrepreneur with a different type of business. Once you find someone appropriate, read his written materials and Google him to learn as much as you can about his career. Get in touch by e-mail to start, and then outline your expectations for engagement. These should involve getting together at least once a quarter to discuss your business and to challenge your assumptions on how things should be done.
You might also want to join a support group or third-party industry association so that you have the opportunity to brainstorm with your peers and compare notes on what’s working and what isn’t. Keep in touch by subscribing to their listservs and newsletters. As a new inventor, for example, you can hook up with your local Chamber of Commerce or your local branch of organizations such as the Alliance for American Innovation or the United Inventors Association.
Build Your Team
According to Jeff and Rich Sloan, the founders of StartupNation.com, the best way to do this is to create a superstar list. Write down the names of 12 people who have special gifts and with whom you would like to work, without limiting yourself to people who could fit a current need on your team. Look for people with potential, people with proven skills, and people who are power brokers. Hiring people with potential is less expensive and will allow for growth into a position. Hiring people with proven skills will quickly fill in areas where your business is weak. Power brokers wield a great deal of influence in your community or industry.
If creating a superstar list from your existing network doesn’t meet all your needs, meet viable candidates cheaply through third-party association events, competitors, or social networking sites such as Facebook and LinkedIn.
Manage the Business Side
The United States Small Business Administration is a terrific resource for logistical information – such as how to acquire health and other types of insurance, licenses, and discounts on supplies like business cards and services such as web programming – that is involved with starting your new independent career. You should also enlist the services of a good accountant and lawyer. Your accountant will be responsible for reviewing your business’ books and accurately recording its financial details, preparing tax returns, and overseeing your budgeting and future projections.
Your lawyer should help you establish your new venture as a legal entity (sole-proprietorship, corporation, etc.), determine how equity is issued in your new company, create an ownership structure, outline how employees, consultants, and advisors will be integrated into the business, and prepare for future legal issues involving investment and operations.
Incorporate your budget for these professionals into your cash flow analysis, and hire those who have experience working with entrepreneurs and who have been referred by trusted colleagues and verified by client references. Once they’re on board, establish a protocol for regular communication and a timeline for reaching agreed-upon goals.
Get the Word Out
New entrepreneurs usually don’t have the budget for splashy advertising campaigns or high-priced publicists. Therefore, you’ll need to get a little more creative when it comes to marketing your business. Low cost suggestions include making alliances with related community groups or local companies, sending out a monthly e-mail newsletter, teaching adult education classes, and speaking at nonprofit organization meetings in your industry.
Build a professional website on which you feature core information about your business and promote your expertise via articles you’ve written or been quoted in. Make your site search-engine friendly by having domain names, page titles, and copy that are relevant to your trade, and link to similar sites with good reputations and high traffic. Finally, identify online communities where your target customers gather. Get a feel for each and then offer your educated opinion – sales pitch-free.