So you’re thinking of launching a new business?
You’re not alone – entrepreneurialism is the backbone of our nation, and while it is never easy, success is within reach for anyone with grit and integrity. No matter the industry or type of business, there are proven ways that the majority of current successes have reached their goals.
Victoria Treyger, Chief Marketing Officer of Kabbage, Inc. offers the following eight steps to starting a business, in her own words below:
Step 1: Choose Your Product
What will you sell or offer? Is it a product or is it a service? How will you differentiate yourself and your business from your competitors? How is what you offer different or better than what’s already out there? What is your expertise? What is your passion? If you’re not sure, take a moment to think back to past performance reviews you’ve received in the corporate world. What characteristics and traits stand out as your strengths? Build on these and see how they can translate into starting your own business.
Step 2: Identify Your Perfect Customer
This is crucial for anyone starting your own business. Knowing who your target audience is and then catering your product to fulfill a need is the perfect formula for success. So how do you define your target market? Is it men, women, teens? Are they older? Married? Single? Veterans? Moms?
Know Your Target Market: Knowing your target market and what appeals most to them will help you refine your product offerings. It will also help you develop strategic marketing plans. A printed flyer mailed to young millennials will miss the mark, since these folks get the majority of their news and information online. And vice versa, a targeted banner ad campaign on specific websites may be lost on a demographic that does not spend a lot of time online.
Do Your Research: There are ways to do research – some is free and some comes with a price tag. You can start with your local Better Business Bureau, your local Chamber of Commerce, and your library for some demographic information. The local convention and visitor bureau also has residential demographic information that can be helpful when starting your own business. Also, go online and check out your city or town’s website as well as your county offices
Step 3: Know the Market.
Do you know what your competition is doing? How are they winning customers – and more important – how are they keeping customers loyal? What differentiates their product or services from those that your business offers? Businesses with similar products and services can co-exist in the same markets. But it’s up to you to know exactly how your product is different. Make yourself stand out.
Know what your market responds to by doing some simple focus group research. It can be as simple as having cookies and hot cocoa on a cold day and inviting people to chat with you about their needs. Or, a quick email survey through providers like SurveyMonkey can be a quick and easy (and free!) way to gather critical market research to grow your business.
Step 4: Know Your Worth
It’s important to not underestimate yourself or the price you charge for your products or services. Owning your own business does not mean you give away your services cheaply.
That said, when you’re first starting out as a business owner, you also do not want to overestimate your pricing structure. Do some research and see what your others in a similar business charge for their products or services. As a new business owner just starting your own business, you may want to consider starting out low with your pricing. This gives you a chance to build your reputation and credibility as a quality provider. Once your business is a bit more established and your income is more steady and regular, you can consider raising your prices. At that point, you’ve probably earned a loyal and steady customer base as well.
There are many resources online that can give you estimates of salaries for your industry. These may not always be possible when you start your own business. You will have other expenses as a startup that people working for corporations simply won’t have. Take these into consideration when planning your expenses in the short and long term.
Step 5: Get your finances together
Do you know what kind of startup capital you will need? Do you need to get a business loan? Will you borrow from friends or family or have investors or partners? Will you need to borrow against your home or your 401k? Use this time to gather your projected income as well – it often takes time for a new start up business to turn a profit.
Do you have additional sources of income to get you through the leaner times until you begin to make a steady income? You will need to make sure your credit is in good standing – excellent, in fact – if you plan to get a business loan. If your finances are not quite where they should be, consider going in with a business partner. Perhaps your expertise and their financial strength will help make starting your own business a less stressful venture.
You will also need a Tax ID number. But first you must decide what kind of business you will have. In general, you most businesses are one of the following: a sole proprietorship, a partnership, a corporation, or a limited liability corporation. Do your research and find out which one makes the most sense for you. Then, make sure you are following all tax guidelines for the type of business you’ve selected. Again, there are many resources online – one of the best is the sba.gov, which is the Small Business Administration website.
Step 6: Get a nest egg
Many experts recommend having about six months of savings in the bank. This isn’t just for emergency use; this will be your go-to money while you build and grow your business to turn a regular profit. Put some money aside while you continue to work at your corporate job. This way, when you do leave your steady job and are ready to start your own business, you’ll have a bit of a nest egg to lean on while you get up and running.
Tip: If you are married or have a partner with whom you share living expenses, make sure they can carry a bit of the financial burden while your new business gets off the ground. Emotional as well as financial support is key for an entrepreneur when you start your own business.
Step 7: Write a business plan
There are many resources online to teach you how to write a business plan. Basically, a business plan is a detailed roadmap of where you expect to take your business. It is a clear picture of who you are, what your business is, how you will reach your target customers, and your plan for revenue and profits. Your business plan is a critical factor when applying for business loans. In fact, it is the very first thing – in addition to your credit reports – that a bank loan officer or other nontraditional lender, such as Kabbage, will look at. Lenders review your business plan to make sure you are a good risk. Don’t be fooled into thinking that your business plan needs to be long and lengthy.
Step 8: Seek out free counseling and assistance
The Small Business Administration has local offices in every state. They offer free counseling and training for small business owners. Their services are invaluable to any start up. They can help you develop a business plan, a marketing plan, as well as help you navigate what you need to know about filing and paying taxes as a small business owner. Many of their services and training programs can be found online. Others require that you attend training classes or one on one meetings with small business advisors. These resources are there for your benefit – take full advantage of all they have to offer. And attend as many of their networking events as possible – it’s a great way to meet other small business owners and promote your products and services.
Starting your own business is an exciting adventure! It is possible to take your passion and drive and turn it into a profit-making business where you are your own boss. Follow these steps and do your research and you’ll be well on your way to becoming a successful business owner.
Small businesses must go digital to survive (and thrive)
(BUSINESS ENTREPRENEUR) A study at Cisco reveals how digitizing small businesses is no longer optional, but critical to success, thanks to the pandemic.
As digital transformation efforts ramp up due to the COVID-19 pandemic, a new study released by Cisco has highlighted some key insights into how small businesses will need to adapt in order to survive in the “new normal.”
The study, conducted by International Data Corporation (IDC), analyzed more than 2,000 small businesses across eight different markets, including the United States, Canada, Germany, Mexico, United Kingdom, Brazil, Chile, and France. Using a four-section index to assess a small business’s digitalization efforts, the research found that 16% of companies said they were “thriving and feel their businesses are agile and resilient.” While 36% stated they were in “survival mode.” Regardless of where they were ranked in the index, the study concluded that 70% of firms were in the process of ramping up digital transformation within their company due to the coronavirus pandemic.
“The COVID-19 pandemic has exacerbated the digital divide that was already present in the small business market, and it is forcing companies to accelerate their digitalization,” said Daniel-Zoe Jimenez, AVP, head digital transformation & SMB research at IDC. “Small businesses are realizing that digitalization is no longer an option, but a matter of survival.”
The study also highlighted several challenges associated with digital transformation. The three biggest obstacles that businesses seem to face during the process were digital skills and talent, budgetary issues (lack of funds or previous commitment of funds), and cultural resistance to change. Despite these roadblocks, 45% of companies surveyed stated that they expect over 30% of their business to be digital by 2021. And 32% responded that they are planning on developing a digital strategy. This included investing in talent with the right set of digital skills moving forward.
Those decisions fall in line with Cisco and IDC’s recommendations. These include creating a three-year technology road map and building a workforce with the right skills to succeed in a digital world. Other suggestions include finding the right technology partner, and keeping up with industry trends. Leveraging financing and remanufactured equipment can aid with cash flow and budget requirements.
As small businesses continue to adapt to consumer behavior and the whirlwind of ever-changing rules that have come with the coronavirus, digital transformation will continue to play a major role in the post-COVID world. According to the report, if half of the small businesses surveyed can reach the second-highest tier of the index by 2024, those companies could end up adding an additional $2.3 trillion to the eight markets’ gross domestic product (GDP), contributing to the global economic recovery.
As we approach the six-month mark of the pandemic, just when and how the “new normal” will emerge is still uncertain. But there seems to be a light at the end of the tunnel for small businesses — even if it’s faint green and contains zeroes and ones.
Product Hunt is putting their money where their hunt is
(BUSINESS ENTREPRENEUR) Product Hunt is putting money where their hunt is by announcing a new Maker Grants service to boost small and independent creators.
Product Hunt – a technology centric site that aggregates new products daily – recently announced a new Maker Grant program that is designed to identify and help startups get their products started with a $5,000 grant.
Since its inception in 2013 by Ryan Hoover, Product Hunt has been a success vehicle for numerous products and companies by giving them access to a large audience of potential customers and investors. Available as an app across multiple formats, it allows groups to post their ideas and get feedback from a number of sources through comments and an integrated voting system. Everything from books, podcasts, hardware, and games can be found on Product Hunt, with dozens of new entries every day.
And now, Product Hunt’s new venture is to give 3 promising products their own substantial grant each month in an effort to give back to its community by placing money into the hands of its followers.
In a statement in its press release, Product Hunt announced that, “We know that building products can be expensive work, and passion doesn’t always pay the bills. As a way of saying thank you to the community, and to encourage makers to keep building, this year we’re offering cash gifts of $5,000 to three makers each month.”
Users will be able to nominate Makers that they feel deserve the investment by filling out a form. Product Hunt will take these suggestions and make decisions from there. In terms of how this will all be done, the official word is, “We’re reviewing makers who launched in the previous month who we believe are shining examples of innovation, grit, and engagement with the PH community. We’ll also be prioritizing those who are bootstrapping their businesses or working on their side projects without the help of venture funding.”
The big takeaway here is that Product Hunt is championing its support of its Makers through direct monetary help. By giving back into their own users, it strengthens and encourages them to put their best ideas forward and believe in their own innovation. Whereas more standard and traditional methods of grants may require several layers of arbitration, paperwork, and other hurdles, Product Hunt is providing a fast track to capital by leveraging its existing group of passionate users. Even knowing where to look can be intimidating and overwhelming.
At a time when banks may not be the best option for grants and loans, seeing a company choose to instead redirect its own money into the hands of its users is uplifting (and even more so given the turbulent market in a pandemic-choked world). Product Hunt maintains that it will do this each month, and will listen to feedback as it continues to build out the program.
Product Hunt’s userbase has reacted with incredible enthusiasm and praise, with repeated posts expressing a huge level of excitement and gratitude. While there are still some questions to be answered, Product Hunt’s flexible and community-driven approach is poised to potentially change the lives of many Makers. It will be exciting to see how this all plays out, and hopefully will encourage other companies to follow suit in creating positive outcomes through financial support.
Snowpocalypse disaster 2021: How can businesses help their employees?
(BUSINESS ENTREPRENEUR) How did your business manage your human resources during snowpocalypse? How can you protect your team and prepare for the next disaster?
The effects of Snowpocalypse 2021 will be felt for months. It’s not just fixing the power grid, paying off electric bills, or repairing pipes. Many employees lost wages because they couldn’t work. CNBC estimates that over 40% of Americans couldn’t last a month on their savings. Combined with the impact of COVID-19 across many industries, recovering from a 2-week loss of wages from the snowstorm disaster could devastate many Texans.
How does your business manage time off during disasters?
Larger businesses often continue to pay their employee’s salaries during disasters. Exempt employees have different rules over non-exempt employees, but we’ve seen many instances where larger organizations continued to pay employees, even though they couldn’t get into work. Employees with small to medium sized businesses often don’t have an option. These employees either take PTO or don’t get paid. While this might be legal and understandable from the business point of view, there might be other options. What can a business do when a disaster occurs when it comes to employee wages?
Know the law to pay employees right
I’m not even going to try to and sort through the multitude of laws that pertain to nonexempt or exempt employees. Every business should have a disaster policy that informs employees how their salary will be handled during the disaster, whether employees can stay home and work, choose to stay home out of safety or are forced to stay home and can’t work. Know the policies of the ADA, OSHA and FMLA to know what your rights and responsibilities are as an employer when disaster strikes. Make sure you’re paying employees according to state and federal laws.
Consider options to protect employees
We’re not suggesting that businesses put themselves in debt to pay workers during a crisis, but Texas has experienced so many disasters over the past few years, it does make sense to think about how to help employees during those times. Critical time off (CTO) is one option as a benefit to workers during crises. By lowering stress during critical times, your employees come back to work ready to deal with your business.
Building trust with your team by helping them through a crisis can help your business keep your best workers. Now’s the time to look at your disaster response and figure out how to take steps to prepare for the next time.
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