Over 90% of businesses are family-owned small businesses, which are started every day by people just like you. Early and flexible planning are the keys to a successful business start-up in Michigan. In this blog post, I have provided ten brief steps that every entrepreneur should go through before launching a new business or buying into an existing business or franchise. When you get to step four, please contact me to schedule a free initial consultation.
Step One: Gauge Your Personal and Family Commitment
Is this the right time for you and your family to start a new business? Will your motivation (and funding) be enough to carry you through set-backs?
Step Two: What Will You Do and Where Will You Do It
You should be able to clearly explain why you think your chosen industry is right for you and why your chosen location is right for that industry. If you cannot do that, more research is needed. Ask the local chamber of commerce or other businesses in your area about your location. If you are not sure whether you have the skills to succeed, buy a book or take some classes.
Step Three: Write a Rough Business Plan
You need to have an idea of when your business should be making money. You should conduct some research on how much your expenses will be and then how much revenue you will need to meet those expenses and pay yourself some income. Estimate how much sales volume you will need to reach that level of revenue and how long it will take to get customers in your door.
Step Four: Choose a Small Business Attorney and Accountant
Meet with your small business attorney and accountant to review your financial and liability assumptions. It is often best to meet with your accountant and small business attorney together initially, so that the work load can be properly allocated between them. Whether you are buying an existing business or franchise or starting your own from scratch, you should obtain independent advice on the viability of your proposed business and the risks you face if your estimates are off.
Step Five: Make Adjustments to Your Business Plan and Secure Funding
Take the recommendations from the accountant and attorney and modify your business plan. Reevaluate the plan with your family or business partner to make sure you have the funds necessary to carry out the plan and secure a line of credit if you can.
Step Six: Identify and Secure Intellectual Property
Intellectual property includes trade names, logos, processes, vendors, and other ideas or information that sets you apart from your potential competitors. This information should remain secret and not shared with anyone until you and your business attorney create a confidentiality agreement and to protect it.
Step Seven: Build a Balanced Team of Professional Advisors
With your revised business plan and your secured intellectual property, you are now ready to build the rest of your professional team. In addition to your business attorney and accountant, you should seek out bankers, real estate agents, land lords, insurance agents, and other professional advisors to start putting your business plan into action.
Step Eight: Assign Business Team Functions
Even if you have a business team of one, you need to at least have a plan procedures in place to ensure that all of the Sales, Marketing, Collections, and Compliance functions are being completed. Your plan should also include some oversight to make sure these functions are getting done. Even if you are the sole businessperson, you should have someone hold you accountable for getting these done, such as your spouse, mentor, accountant, or business attorney.
Step Nine: Market and Sell Your Product or Service
Get out there and make your business work for you!
Step Ten: Rinse and Repeat or Rethink and Retreat
You should conduct a monthly review of your financial situation and ask yourself (a) am I making money; (b) is my return on investment is worth the effort – hint: a 1:1 ROI ratio was outlawed by the 14th Amendment; (c) are my marketing or advertising efforts effective; and (d) is it best to maintain the status quo, adjust course, or retreat? Meeting with your business lawyer and accountant regularly during the start-up period will help you quickly adjust to the unknown market factors and avoid costly mistakes that compound over time.
Schedule a Free Initial Consultation
with Small Business Attorney Shawn Eyestone
When you get to Step Four or know that starting or buying a business is the right decision for you, please call or email us to schedule a free initial consultation to see how we can help you put your plan in action.