JohnAnDeva

Your Investment

Knowing how much money you have and how much you are willing to invest is one very important thing that you should think about first.  The amount of your investment generally depends on the type of business that you have and how big you want to begin with.

For a small business like a local design company, you can start small.  You can just create a few samples for display and presentation and you can perhaps start with no employee at all.  All you need is a computer and a portfolio to start with.  For marketing, start with your friends and acquaintances first.  Once you have more income, you can move forward to the next level. 

It is very important to at least keep some of your savings in the bank, in case you do not achieve success right away.  You should have enough funds to support your business for at least three (3) months or so, this will give you enough time to promote your business and capture your market.  You should not expect income immediately after set up. 

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Corporation

Setting up a corporation may not be as easy as setting-up a sole proprietorship or a partnership.  It takes more time and is a bit more complicated.  However, it can be worth all your efforts since this structure limit the owner’s personal liability for business debts and court judgments against the business.

Corporations are independent legal and tax entity.  It is separate from the people who own, control and manage the busienss.  Taxes are paid through the personal tax returns of the owners.  The corporation itself pays for the taxes.   The owners only pay personal income tax on the money they draw from the corporation in the form of salaries, bonuses, dividends, and the like.

Setting up a corporation instead of a sole proprietorship or partnership is best if you rund the risk of being sued by customers or of piling up a lot of business debts or when you have substantial personal assets that you want to protect from business creditors.

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Types of Ownership Structures

There are basically 3 types of business ownership for you to choose from: 1. Sole Proprietorship; 2. Partnership, and; 3. Corporation. 

Sole Proprietorship: This is the type that is easiest to set up.  It is a one-operson business that is not registered with the state like a limited liability company or corporation.  There is not a lot of requirements to file and you create one just by going into business for yourself.  However, the disadvantage of this type ownership is that the sole proprietorship is inseparable from its owner.  Meaning, the owner of the business reports income and losses on his/her personal tax.  The owner is also personally liable for any business-related obligations, including debts and court judgments.

Partnership: Partnership is rather similar to sole proprietorship except that it is owned by two or more people.  As in sole proprietorship, the arrangement of a partnership begins whe you start a business with another person.  The partnership owners also file taxes on their shares of the business income on their personal tax returns.   Each of the partners are also liable for the entire amount of any business debts or claims.

In general, sole proprietorship and partnership can be a good choice in businesses where personal liability is not an issue.   When you will not be borrowing much money or you are unlikely to be sued, then you can go for either a partnership or sole proprietorship.

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Your Business Name

Your business name has a lot of things on it.  It is a reflection of your company.  It has a lot to do to turn your business into a success.  Your company name can be the talk of the town or just an anonymous entity. 

Your business name has to be distinctive and easy to remember.  It should communicate to your market what your business is about.  It should reinforce the key elements of your business.  For example, if you are a consulting firm, it has to convey that impression.  If you are a retail store, it has to give people that impression.

Try to know what qualities of your business you want to be identified with your business name.  It will be helpful to ask your family members, friends, and colleagues to give you their ideas.   Reading trade magazines and surfing the web will also help a lot. 

Keep in mind that your  business name should be both marketable and infused with personality.  Make sure that your business name is in no way embarrassing.  It should not be too common either that it doesn’t stand out in the crowd.  Choosing the name of your city, state, region or country can be a hindrance when you want to go for a wider market.

A business name that is too obscure that your customers do not understand what it means is also not a good choice.  It has to have a special meaning and significance.  It must also be easy to spell and pronounce.

In case you already decided on the name but realized that you made a mistake, it will be wiser to just change the name into a better one than go on with your business with the wrong name.

Spend time in thinking about your business name like you did on conceptualizing your business and creating your business plan.  After all, it plays a big part on the success of your business.

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Determining Your Business Objectives

This can be the most exciting part in planning a business.  In this stage, you can let your mind roam and see yourself five (5) years after you have set up your business.  Of course, you would not want to imagine that your business  will be gone by then.  You can be as wishful as you want to be at first.  Write an essay of what you want to happen to your business and how you can make those things to happen.

1. Write it Down After you write the essay, you can read it and try to analyze which is realistic and which is not.  You can also ask yourself how hard you will work and how far you will go to make your business succeed.  Your determination is very important for you to achieve your goals.  Ask yourself if you are willing to invest time and money, make sacrifices until your business is established - this can take a year, a few years or several years.

2. What if it Doesn’t Work Out.  Another important thing to ask yourself is what will happen to you when your business does not work.  Do you have any back-up plan in mind in case your business fails? 

3. Number of Employees.  In case you succeed, how many employees will you have in a year, in two years, or in five years? 

4. Your Market.  Think about your market: how much will your market share become in that time frame?  Are you planning to sell a variety of goods and services or do you want to concentrate on a specific niche? 

5. Local or Global? Are dreaming about capturing a global market, then how do you want to go about it?  Do you want to have multiple local branches at first,  open branches in different areas or expand in different countries? 

6. Management and Other Tasks.  Once you business has grown, it may be harder for you to manage it alone.  By that time, do you think you can be comfortable delegating tasks to others?  Decide what tasks you can delegate and what tasks you want to do yourself. 

7. Financial Sources.  You can have a partner or other co-investors, or you might want your company to remain independent and privately owned.  You can also go public. 

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Do I Need a Business Plan?

You might be wondering what a business plan is and why do I need one. A business plan, is basically a written outline of your business. It contains information about your business’ economic viability, description and analysis of your business prospects. It contains an executive summary of your business, business description, market strategies, competitive analysis, design and development plan, operations and management plans, and the financial components of your business.

Having a business plan, just like every plan, helps us focus on our objective and gives us direction when we seem to be lost. It serves as a roadmap that tells you where to go on the course of your business. A business plan helps define and focus your objective using appropriate information and analysis. A business plan is also something that you can present to potential investors, lenders and banks.

At first, it will be ideal if you will your business plan to experts and ask for their opinion. Their input can be very valuable since you might have missed something very important. It is also important that you review and update your business plan as you go along with your business.

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Starting a Business - Part 2

After assessing yourself if you are fit to be a businessman, you can now start thinking about the business itself.

1 . What Kind of Business Do You Want to Have? Think of the thing that you love to do: your skills, interests and personal values. It is always important that you love what you do and you are happy with what you are doing. Your passion in what you do is very important. Loving what you do will make it easier for you to rise again after some bumps and crossroads that you may encounter along the way.

If you are into graphic design, then a design and print shop may be the ideal job for you. If you are into gardening, then selling plants and flowers could be the dream business for you.

2. Do Some Market Research. Of course, this is a very important factor in order for you to succeed. You have to know your target market, what they want, what they need and what you can do to meet those needs. Studying the competition is also crucial. You must know what your competitors are doing to reach their market and how do they meet your market’s needs. Once you know all these, you can now create your business plan.

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Starting a Business

Are you tired of your day job? Do you feel that you don’t get enough compensation considering that you put a lot of effort on your work? You must be thinking about setting up your own business. Here are some basic questions you need to ask yourself before you make your decision:

1. Do You Enjoy Being the Boss? Some people want to be in-charge while some are contented just being on the side lines and following orders. If you are the type of person who would rather take charge, you can be an entrepreneur. Since it is your business, it is important if you will be able to manage it and take-charge of it. This is crucial especially during the start up phase and until your business is running smoothly.

2. Are You a Risk Taker? Getting into business is a risk. You have to realize that your business can either fail or become a success. You must be patient enough to allow your business enough time to get established and grow.

3. Think of How Much Time and Effort You Can Give Your Own Business. In most cases, people work harder for their own business than for an employer. This is perhaps, because of the fact that your effort can result to your own success. Working hard for an employer can give you some recognition and some increase in salary, there are some instances when your efforts do not seem to get recognized. On the other hand, working hard for your business can easily be converted to profit or success.

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