Starting a business is kind of a big deal, and there is no such thing as too prepared (especially when your family’s livelihood is at stake and there is no back-up plan.) I decided I can read online until I am blue in the face, but at the end of the day I need to learn REAL BUSINESS STUFF in a REAL CLASSROOM from a REAL TEACHER who has REAL EXPERIENCE. So off to school I went.
To preface, I am a nerd. I graduated with my Bachelor’s in 2008 and have been going back to school ever since for whatever interests me; Computer programming, advanced algebra, drafting–the list goes on. I love knowledge (because I am a pain-in-the-ass know-it-all) so the more I know the more I can help myself and others around me (whether they like it or not!!!:) Going back to school wasn’t a huge deal for me, I do it all the time. But now I’m going back for something more than an interest– THIS WILL AFFECT MY LIFE IN A BIG WAY (so much so that I felt all caps were very necessary for that statement.) I plan to take more than just Business 101 after this semester, but I just needed to get my feet wet. Eventually I will lead into different levels of Accounting, Business Law and side classes that are necessary to get licensed by the state.
I already knew some of what has been covered in class because I work with small businesses at my “real job,” and I also research online. However it was really nice to get concrete information from a man that has owned small business, traded stocks successfully and has headed whole sectors of VERY LARGE corporations. I was able to stop inferring from bits and pieces of information from the internet, which is not nearly enough to start a business.
It’s only the middle of the semester, but here are some tidbits that I would like to share…
1. Partnerships and Sole Proprietorships have tax benefits that you will not get with a regular corporation. Even Small Corporations (S-Corp) have some tax benefits that regular corporations (C-Corp) do not. Choose your strategy wisely.
2. When seriously starting a business, enlist the help of two important people: a CPA with experience in your type of business, and an attorney with business law experience. Make sure both of these people are a) people you can work with, b) will return your calls no matter when or where, c) fairly priced, d) trustworthy.
3. When deciding where to open your business, consider the state’s position on Unions (and whether or not it corresponds with your position on Unions) and what kind of business taxes you’d be expected to pay in that state/city.
4. 44% of small business fail due to incompetent management. By this I mean, INCOMPETENT (really day-one stuff.) Not paying suppliers, not having enough insurance, not paying taxes. Just do the right thing and listen to your CPA and attorney.
5. Hire honest, talented people and pay them well. You’ll win their loyalty and they’ll work harder to help you succeed.
6. Advertise in peak seasons when people are likely to buy. Honestly, would you get off the couch to buy a bathing suit in December just because you saw a jazzy commercial? Yeah, me neither.
7. A successful entrepreneur makes good plans, they don’t simply react to problems. When there is a plan in place, you carry it out despite the problems. You can’t create a plan to cater to the problems at hand.
8. Create a record storage policy. Garbage over seven years old can go. Most things over 3 years are unnecessary. Keeping EVERYTHING can create a liability.– Philip-Morris had to pay out millions due to a memo written 30 years ago stating “Well, we all know smoking is bad for you.” Don’t go out of business paying for lawsuits from old emails.
9. Get enough insurance. Seriously. Cover yourself, your employees, your customers, your property, your equipment, your dog, your mother, your mother’s dog and every other known aspect of your life that could be at risk by someone making a dumb decision and blaming it on you.
10. Make people think of your business first when they are in need of services that you offer. Hire college kids for the day to survey random pedestrians to see who knows about your business and what you offer.
11. Make it easy for people to do business with you. If you sell large items, deliver. If you offer a service, make sure your time frames are accurate. Always under promise and over deliver– but don’t lose money in doing so.
If you couldn’t handle all of that, let me simplify….
1. Surround yourself with hardworking, trustworthy, talented people.
2. Choose knowledgeable partners and experienced business “planners.”
3. Plan comprehensively and in great detail.
4. Treat your employees well.
5. Treat your customers well.
6. Spend money to make money with advertising, talent, products, renting a suitable building in a good location (if customers will be visiting) and insurance.
7. Be fair, work hard and do the right thing.