Practical Thoughts on How to Start Your Own Business
Starting your own business can be very rewarding. But it’s definitely also a challenge.
When I made the jump from being a corporate executive to an entrepreneur, I found my new role to be hard. In fact, I always say it’s much harder than running Merrill Lynch… and I say that because it’s much harder than running Merrill Lynch.
But it’s also been so worth it because it enables me to have an impact on an issue I care deeply about: empowering women to reach their financial and professional goals.
If you think you can handle the tough times that inevitably come with all the good of entrepreneurship, here are some steps to start your own business:
1. Don’t quit your day job… yet.
Before you dive into the deep end of entrepreneurship, try dipping your toes in first. Research the market you want to break into. A simple Google search can tell you what competition you’ll be facing. You can also search patents and trademarks to see if your idea has already been registered. And try surveying people you know about your proposed product or service.
Even consider opening up shop on the side. Picking up one or two freelance or consulting gigs or peddling a handful of your products on sites such as Ebay, Etsy or Handmade at Amazon is a great way to see if you really have a money-making idea.
Few can do this all alone. In fact, the strength of an entrepreneur’s network can be make-or-break for her business. So don’t be shy about calling on your family, friends, colleagues and everyone you know for any help they can offer—whether it’s giving you feedback or connecting you with potential clients, customers or resources.
Branch out even further and tap into the power of more formalized networks for women like Ellevate Network, Women 2.0, Levo League and Upward Women to get your business started. If nothing else, you can gather plenty of knowledge and inspiration from learning about other people’s experiences and pratfalls.
3. Bulk up your savings.
Even if you think you have a million-dollar idea, it’s likely going to take a long while before you can turn it into a million-dollar business. Before you go all in and leave your day job behind, be sure you can support yourself along the way.
You’ll likely want to give yourself at least two years to see if your business can work. So it follows that you should save enough to cover those two years of expenses. And at the least, you should fatten up your emergency fund with enough cash to cover your living expenses for eight to 12 months and your business expenses for four to six months. Remember that it’s better to overestimate your costs rather than risk not saving enough to give your business a chance to work.
4. Write a business plan.
It’s always good to get your thoughts down in writing. A one-page business plan will help you get organized, focus your ideas and get you on track. Keeping it short will make it easy to adjust as things progress and change (as they’re bound to do!).
Some things you may want to include: your mission statement, target audience, revenue streams, marketing and distribution channels, partnerships and, of course, financials, among other things.
As you outline everything, it’s a good time to recognize that you will be responsible for all of it. If you’re uncomfortable with any portion of the work, figure out now how to get around that. For example, if you aren’t great with keeping the books, you might want to take a class or study up on your own to improve your skills. Or consider having someone do it for you—and work hiring employees and freelancers into your plan.
5. Get funding.
Even as women are starting businesses at a greater rate than men, we still don’t receive anywhere near our fair share of funding.
But things are starting to change: Using crowdfunding sites such as Kickstarter and Indiegogo can be a good option to help you raise capital (while testing the market), and women are as successful as men on these sites, if not more so.
You can also check out fundraising and accelerator options that are specifically geared to women-led businesses, such as the crowdfunding site Plum Alley, accelerators Astia and Springboard Enterprises and angel investing groups Pipeline Angels, Portfolia and Golden Seeds. There are also hybrid organizations that can bring some combination of network, education and funding like the EY Entrepreneurial Winning Women program and the Tory Burch Foundation.
6. Organize your paperwork.
There is a lot of red tape involved in starting a business. Believe me. You need to select your form of ownership, register a name, get a tax identification number and whatever permits or licenses you’ll need—to name just a few things.
7. Become a certified woman-owned business.
Once you’re up and running for a few months (congrats!), you can officially identify as a woman-owned business. Doing so can help you land big clients, including from local and federal governments, as well as large corporations, that aim to parcel out a certain amount of contracts to woman-owned businesses.
The certification process is a lot of paperwork and can take up to 90 days. You need to provide a ton of documentation for review and prove that your company is at least 51% owned and managed by women.
This article was originally published on www.Ellevest.com.