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Up And Running In 30 Days Document Transcript

  • 1. Up and Running in 30 Days by Carol Tice Monday, May 19, 2008provided by You can do a lot in 30 days--like start a business. Follow these steps to get going in less than a month. Can you really start your business in 30 days flat? While it depends on the type of business you want to launch, our experts say you should be able to get at least one aspect of your business up and running within a month, whether it's an e-commerce website or a signed contract with your first customer. Depending on your experience level with the type of business you want to start, some steps may be ongoing responsibilities, take longer to complete or need to be done in a different order than we've listed here. Other steps may be a snap and be possible to complete in a day. Even if the type of business you want to start takes longer to launch than 30 days, our step-by-step guide should have you well on your way to launching your business before your calendar turns over another page. First, set aside time to work on your new business idea, says business consultant Paul Snare, a counselor with SCORE. Snare advises you to chart how you currently spend your time, plotted in 30-minute increments. Then pinpoint hours that can be freed up for working on your business idea. (If you can take a leave from your current job, hire a sitter or let the housekeeping chores slide for a while, so much the better.) We've broken the process down into 30 simple, essential steps to take the first month if you want to get your business open fast. Now you're ready to start working toward opening your doors . . . even if they're just the doors to your home office or virtual storefront. Paperwork 1. To legally be in business, you'll need to complete some basic paperwork. Which government office handles what form varies from state to state, but for the most part, the process is quick, inexpensive and can be done online, says business attorney Mark Kimball. Most business registration steps can be completed overnight, either via messenger or the internet, by requesting expedited service and paying a small fee. 2. If you're forming a partnership, corporation or LLC, begin by registering
  • 2. your corporate entity, usually with the secretary of state's office. Sole proprietors can skip this step, along with the next one, obtaining a federal tax identification number from the IRS. Get a tax ID almost instantly through irs.gov. 3. Apply for a business license, typically through your state's department of licensing. If you're not a sole proprietor using your own name as your business name, be sure to register your business name with the state, searching state databases first to verify that your name isn't already being used. 4. Apply for any desired patents or trademarks as soon as possible. They can take six months or more to be approved, says Kimball. But you can begin operating before receiving these federally approved rights. 5. If your business requires a specialty license that you must pass a test to receive, such as a contractor's license, sign up for necessary classes or training ASAP, advises Peri Pakroo, author of The Small Business Start-Up Kit. If you try to operate before your license is official, your business could be shut down. 6. Once you have your business registration in hand, open a business bank account right away, suggests Pakroo. "There's something about doing that for a lot of business owners that makes it feel more real." Network 7. Don't start a business before discussing your concept with other entrepreneurs, says Raman Chadha, executive director of the Coleman Entrepreneurship Center at DePaul University. While your family can provide you with moral support, you'll need other business-people to function as impartial sounding boards. Network through business organizations, find a mentor or coach, or form an advisory board to connect with entrepreneurs. "Only other entrepreneurs will say, 'What the hell are you doing? Find a cheaper way to do that,'" Chadha says. Networking can provide you with shortcuts to needed supplies, vendors or funders. Actress Annemarie Lawless, 39, found this out when she and husband Michael Sanders, 41, launched their upscale women's clothing company, A Lawless, in New York City in 2005. In her search for a factory to make her high-quality T-shirts and dresses, Lawless beat the streets of Manhattan's garment district, asking other designers for help. Inside an elevator in a clothing factory, Lawless met a designer who gave her an introduction to "the best knit factory in the fashion district," where her clothes are now made. Just a few months after startup, Lawless had more than $80,000 in sales orders,
  • 3. and a mentor gave her a connection to a $20,000 loan to cover production costs. A Lawless was off and running, and expects sales to top $500,000 this year. Market Research Before you quit your day job, find out if there really is a demand for what you offer, says Paul Nicholas, president of business consulting firm Straticom. 8. Start by combing through public sources for information, Nicholas says. Search for market surveys published in trade magazines about your niche, or quiz industry suppliers to learn about what's selling and the type of customer that is buying. 9. To find a location that appeals to that customer, ask a local real estate agent for demographic information. "Realtors have already pulled together fact sheets for any community they're working in," he says. "If it's for a retail site, they'll also have information on foot traffic." 10. To get a quick summary of a community, including population and household incomes, Nicholas uses epodunk.com. He sizes up the competition by using Google Maps, which will plot all the locations for a business type over a chosen geographic area. 11. Don't overlook business owners in your industry in your hunt for data. They can be surprisingly helpful. Business consultant Snare had one client who staked out a business similar to the one she wanted to open, but in another city where she wouldn't be viewed as a competitor. She then recorded the number of customers who left with packages in a day, giving her a rough idea of sales. When she approached the business's owners, they were flattered to be asked for advice and talked to her for four hours, providing details on pricing, hours, wages and more. Business Plan 12. Once you have confirmed that your idea meets a need in the marketplace, you're ready to write a business plan. Even if you're not seeking outside funding, don't skip this step, says Tim Berry, author of business plan software program Business Plan Pro and a regular blogger about business planning. Many first-time entrepreneurs are intimidated by the need to create a business plan, says Berry, and their efforts to launch a business grind to a halt. If that's the case, think of business planning as an ongoing task, not a project you have to finish. "It's not a ponderous, big, ugly document," he says. "It's not a barrier that stands
  • 4. between you and what you're doing. Plan as you go--don't stop what you're doing because you're doing a plan." Berry encourages entrepreneurs to jump in at any point in the plan and get started. If you have a marketing background, perhaps you will write the marketing portion first. But all business plans should have three key elements: They describe your market, your business's identity and your business's focus. If, for instance, you're planning a Thai restaurant, what kind is it: a family-oriented neighborhood eatery? A fine-dining restaurant that's more of a regional draw? Your focus will affect many other steps as you execute, so think it through before you move forward. With this core in place, the rest of the business plan should outline the necessary tasks, the deadlines by which they need to be done and the person responsible for each item. "It's like dribbling a basketball," Berry says. "You're looking up to where you're going and down into the details." One of the key details many newbies like to fudge is price--but don't. Research your market and get a good idea of what you could charge. You'll need price information to do a cash-flow projection, which is the final, critical element of your business plan. This estimates how long it will take for your business to start making money. Figuring costs isn't hard, says Pakroo. Scan rental ads for lease costs, want ads for salaries, and read trade publications or talk to vendors to learn about the costs of goods. This will give you a good sense of what you would need to charge to make a profit, a figure that may or may not compare well to the price the market will bear. "If doing the business plan makes you decide not to start your business, it's really done its job," Pakroo says. "Better to find out that it didn't have a good chance of making money before you spend $50,000 or more." 13. Getting your website up and running is relatively easy, and should be one of the early steps in launching your business. You don't have to know how to create or operate a website to have one, says Bob Parsons, founder and CEO of top website domain registrar and hosting company GoDaddy.com. You also don't need to spend big bucks upfront to have someone else create and maintain your site for you. GoDaddy and other major providers offer website design and hosting on a monthly-fee basis. A complete e-commerce site can be had for as little as $800 a year, payable in monthly installments.
  • 5. When you're just starting a business, keep your website simple, Parsons says. You'll save money and customer confusion, as your business will likely evolve after launch and removing elements can confuse customers. You can always add elements later on. 14. Before you hit the internet, think carefully about your business name and how it will look as a URL, says Parsons. Pick a new name if you can't get "yourname.com" as your domain. And remember--customers won't visit if they can't easily recall your URL. If your desired name is available, buy up all possible permutations of it to keep competition out. Real Estate First-time retailers have a tendency to run all over town looking at every empty storefront, says Marty Kotis, president and CEO of Kotis Properties. This wastes a lot of time and could result in you occupying a location where your budding business will die out. 15. Study your market to determine the size and type of space you need. Is it a free-standing store, a mall slot, a corner in an office building? Once you've decided, compare rent per square foot against projected sales in each location to determine the best place. 16. To find the right location fast, contract with a realtor and pay him or her to work for you. Without such a contract, a realtor may push the sites that offer the biggest commission check, whether these sites are right for your business or not. Realize that if you want a high-visibility, high-traffic location, you will likely pay higher rent, Kotis says. But it may be worth it for the additional customers such a site can bring. "New restaurant owners often take an out-of-the-way site and think, 'People will find me, because I have such a great product,'" he says. "That's not going to happen." 17. When you find the right location, make sure you understand the lease terms, hiring counsel if necessary. Fight for the provisions you need most, such as the landlord's build-out commitment or the right to put up a large sign. But pick your battles, and don't let lease negotiations drag on. Pakroo warns against assuming you can operate the same type of business as the one that's currently occupying the space--they may have received a one-time waiver. Be sure to check with local authorities before you sign. Purchasing
  • 6. 18. If you're opening a store, you'll need fixtures--like lighting, display racks and computerized cash registers. These items can be expensive, but the U.S. retail sector is in a consolidation phase, and secondhand fixtures are affordable and easy to find, says Lee Diercks, partner and managing director of the retail business consultancy Clear Thinking Group. Many national chains are closing or moving stores, leaving their fixtures behind. Details on what's being sold off can be found on the websites of major liquidators such as Gordon Brothers and Hilco. Not just for retailers, liquidators are good sources of general office equipment as well. Whether you need apparel hangers, gondola racks, postage meters, desks, chairs or even packing tape, a liquidator likely has it for pennies on the dollar. 19. You can use the same tactics to buy a wide array of inventory in apparel, sporting goods, pet supplies, hardware and many other categories. Big retailers sometimes cancel large orders, leaving regional wholesalers who are storing the goods stuck with merchandise they're anxious to unload. "You name it, it's pretty readily available," Diercks says. Another good source of cheap wholesale goods is eBay. Diercks says unwanted wholesale merchandise lots are turning up with increasing frequency on the online auction giant's site, and that even midsize regional chains are filling their shelves using eBay. Hiring 20. Initially, try to keep costs down by hiring independent contractors or contracting out as much of your labor as possible, says Mel Kleiman, president of HR consulting firm Humetrics. This will allow you to pay only for the work you need and to forgo paying costly fringe benefits such as health care or sick leave. National agencies including Kelly Services, Labor Ready and Manpower provide temporary and part-time skilled and unskilled workers to a wide variety of industries. You can also look for locally focused and special-skill temp agencies in your market. 21. If you need to hire workers, start looking as early as possible. Search your phone list, and let friends know you're hiring. Everywhere you visit or shop, talk about your job openings. "All the good people are already working," Kleiman notes. "Go where the people you want to hire are. Computer stores and computer clubs are good places to find computer workers." 22. Determine what you have to offer workers and emphasize these strengths--perhaps it's a ground-floor opportunity, or employees can be their own boss, or they will be helping to build a great new concept. But don't gloss
  • 7. over the downside, either. Startups can often involve long hours, and employees should be prepared for that. 23. Do online research on interviewing techniques to make sure you learn a lot when you talk to candidates. Even if you don't have money for expensive testing, you can give candidates free tests--like asking that an application be completely filled out, and seeing how many comply. 24. One of the best ways to find more applicants is through your interview subjects, Kleiman says. "Ask every applicant if you can talk to three people they've worked with. The most important decision you make as an entrepreneur is deciding who you allow in your door to service your customers." 25. If you need to find specially trained workers, get creative. When Tim Vogel, 36, started his in-home pet grooming and pet-sitting business, Bright-Eyed Pets, with wife Jessica, 35, the couple found there was a shortage of qualified groomers in their Jupiter, Florida, area. So they created their own 600-hour training program. Half their grooming employees are now pet lovers the Vogels trained themselves. Marketing Even before you're officially open for business, you should begin marketing to raise awareness and line up customers. 26. Start by promoting your business to complementary, or even competing, businesses. When Tim Vogel started Bright-Eyed Pets in 2005, he began by promoting the business to local grooming salons, veterinarians, doggy day cares and supply stores. Vogel offered to trade referrals and told those he was promoting to that he focused on in-home services. While a quarter of the competitors passed on the offer, the others began referring difficult pets they couldn't handle to him. These early referrals got the business off the ground fast-- within a couple of months, the first Bright-Eyed van was rolling to customers' homes. Last year, sales were nearly $400,000. 27. Spread word-of-mouth. Vogel got the community talking about Bright-Eyed Pets by putting pictures of customers' dogs on his vans. "I did all the basic guerrilla marketing," he says. "I put postcards in every local business that would take them. I had lawn signs, posters in office mailrooms. The best idea I had was putting [promotional] magnets on the door of my van with a big 'Take One' sign." 28. A little planning ahead of your launch can give your new company great visibility, says Pakroo. "Look six months down the road," she suggests. "If you [have] a guitar shop and there's a big jazz festival coming up, that's an opportunity."
  • 8. 29.Of course, some of the cheapest marketing takes place online. Nicholas of Straticom advises learning how to embed key terms in your site that will bring customers to you through search results. If you can't do it, pay an expert in web analytics. 30. Beyond keywords, find organizations or associations in which your web link can take customers to your site. These groups may also give you access to lists of e-mails you can use to promote your new business. Seattle writer Carol Tice reports on business and finance for The Seattle Times, Seattle Magazine and other leading publications. Copyrighted, Entrepreneur.com, Inc. All rights reserved.