At InsuranceBee, we provide insurance to a number of businesses just starting out.
So, now we’re beginning a new year, we thought some expert advice on how to kickstart your start-up might be timely.
We’ve been chatting to some of the guys at SCORE who offer free business mentoring and education.
Here’s what we found out:
“One key to the success in the development of any venture, is preparing a Business Plan (BP)”, said Michael Sarka, a SCORE Counselor with years of experience in developing business plans.
“This is a most important planning tool and worth the effort to develop”, he went on. And shared some really useful resources to help you prepare yours:
Business Plan Overview – SBA
Master Your Business Plan
Developing a Business Plan
Deciding on your business structure is also key. There are several structures available. Check out the following links to help you decide which one’s right for your company:
Business Ownership Options
Choose Your Business Structure
Sole Proprietorship Basics
Sole proprietorship is the simplest, legal structure for owning your own business.
How to Form an LLC
Here’s what you need to do to create a limited liability company.
How to Form a Corporation
To form your own corporation, you must take these essential steps.
Corporations and S Corporations vs. LLCs
How do you know whether incorporating or forming an LLC is right for your business?
You’ll also need to think about what value your product, or service, offers. Why should someone choose you over the competition?
Marvin Brook, a SCORE Counselor who teaches seminars on writing effective business plans, gave the following advice:
“One thing I always say to someone starting a small business is this: ask yourself why a potential customer would choose your product/service instead of the competitions. Too many people see their product/service only through their own lens and fail to have empathy with their customers. It’s a tough, competitive world and if your clients can’t really see a value-added reason for choosing your product, you should revisit your idea.”
He also emphasized the importance of having a robust financial strategy in place within the business plan:
“Without getting into the details about what a business plan should contain etc., the best tip I can give someone is to understand the financials of your business idea. This is especially difficult for a new venture because of the lack of data to support the cash flows, balance sheets and income statements you need to create.
A key to good cash flows is making a realistic sales projection and pricing correctly.
“To properly price”, Marvin added, “there must be an understanding of fixed and variable costs, along with a clear idea of how much income/profit the business needs to make.
At the end of the day, the new business venture needs to be able to provide an excellent product/service that meets customers’ needs, that’s priced competitively, but that ultimately provides the business with sufficient cash flow/income to continue to operate.
There are many more complexities you can add to this simple proposition, but no matter how elaborate a business plan you draw up, make sure you meet this simple, business requirement”.
SCORE is a non-profit organization with a huge network of mentors available to help small business owners. It also provides workshops and resources for budding across all industries.