According to the Small Business Association, there are 10 steps to setting up a small business.
Step 1: Write a Business Plan
Step 2: Get Business Assistance and Training
Step 3: Choose a Business Location
Step 4: Finance Your Business
Step 5: Determine the Legal Structure of Your Business
Step 6: Register a Business Name (“Doing Business As”)
Step 7: Register for State and Local Taxes
Step 8: Obtain Business Licenses and Permits
Step 9: Understand Employer Responsibilities
Step 10: Find Local Assistance
Sounds pretty simple, right? We’ll let you learn those steps from them and the hundreds of other authorities out there. After all, starting a business is about more than paperwork and licenses. It is a significant shift in lifestyle and priorities that comes with incredible freedom and incredible responsibility.
So we’re going to talk about the real world steps to starting a business. You know, the steps no one tells you about in advance.
1. Planning with your spouse, partner and family.
This is absolutely essential, as there are many lifestyle changes in addition to the financial changes coming. Are you going to work at home? Where? What are the rules for your work time? Can your partner expect dinner ready and the laundry finished when she gets home because you’re working from home? Does your schedule change your child care needs? In addition to the financial questions, discuss how this is going to change your day-to-day lives as well.
2. Figuring out where the money is going to come from. Not the money for the business, the money to live.
Starting a business is expensive. Whether you have saved the money for years or reached out for a small business loan, unexpected expenses happen during start-up. And then there’s health insurance and retirement savings. If you’re starting a business and these things were deducted from your previous employment paychecks, you are now going to have to actively think about how to keep your family insured and your retirement savings growing. And what about personal expenses? You may need to reign in the daily coffee shop, online book buying or movie purchases. If it’s just you, you can decide your priorities by yourself, shifting as needed. If not, make sure you’re discussing these shifting priorities with your partner, who may be feeling the stress of taking on the sole responsibility for the mortgage while you’re pursuing an unknown.
3. Figuring out where the time is going to come from.
Starting a business will consume your life. Between the planning and the stress, the hours when you’re the only employee start to stretch and stretch until most waking time becomes work time. The lines between work and home blur. This is an exciting time, but it can be difficult, especially on the people around you. Set boundaries for yourself and stick to them. Maybe it’s as simple as only working in your home office, using your physical place to signal work and play time to yourself and your family. Or maybe it’s about time. You work from 8-6 and then are with your family in the early mornings and evenings.
4. Setting your own hours and pace.
Closely related to figuring out time is to let go of the notion that owning a business means you have complete freedom in your work life. In one sense, you do. You can set your own schedule and hours and you can determine how much work you do in a day. But owning your own business also means that there’s no one to answer to. No one to keep you on track or pick up where you left off. Your business, especially at the beginning, will struggle or thrive based on the work you’re willing to put in. Mini-goals, to do lists, maintaining balanced hours – all can help you stay accountable to yourself for the work that needs to be done.
5. What to outsource.
Know your strengths. It can be tempting to try and do everything for yourself, especially in the beginning when money is tight. But getting help from an accountant, a lawyer, a marketing person, even painters and builders, can actually save you money in the long-run. If you’re opening a physical store or restaurant, hiring a manager is expensive. But it also means that you don’t have to physically be there the entire time the business is open to the public, allowing you to focus on inventory, payroll, advertising, and all the other work an owner needs to put in for continued success. When you start your business, prioritize the help you need based on your strengths and weaknesses. Your time and money will be helping to grow your business.
6. Setting your business priorities.
What is your number? How much is enough? What does business success look like? What do you want your life to look like? Are you looking to be the next Steve Jobs or are you looking to replace your previous income? Understanding what business success means to you will help you set goals for your business and maintain balance, especially when stress is knocking at the door.
7. Dealing with anxieties.
What if no one wants what I’m selling? What if that invoice doesn’t get paid? What if my bank account comes up empty? What if a hurricane hits on the same day the kitchen is set on fire and all my employees quit? What if? One of the most difficult and unexpected issues that people deal with when starting their own business is anxiety. The what if’s can get overwhelming and the stress can start to get to you, affecting your judgement. When you’re working for someone else, business anxiety is limited to your job. When you’re the owner, the entire business is your job. Find someone to talk to. A mentor in business can be instrumental. And this person could also be providing you a service. At FNG, LLC, we often find ourselves mentoring clients, especially with the financial aspects of these anxieties, and we’re in a unique position to help them with the best way to combat anxieties: making a plan.
8. Contingency plans
You are your business. What if something happens to you? Anything from a 3-day flu to a serious long-term illness can affect your business’s success. What about growing your business? How much of the revenue gets put back into the business and for what needs? Every business owner, from the start-up to the consultant to the boutique retailer, needs to have contingency plans for a variety of scenarios. And these plans will change as the business needs change. Don’t neglect this aspect of your small business. When the anxieties rear their heads, these plans are what help you sleep at night.
We’ve been there. FNG, LLC is a small business, and we learned many lessons on the way. We also work with small businesses and hear from their owners every day. Most of these owners took these steps without forethought, stumbling through the life changes that just happen when you leave someone else’s business to start your own. But being prepared for these steps can ensure that you are focused on building a business you own instead of one that owns you.