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Are You Ready to Turn Your Skill into a New Business?

Are you GREAT at what you do?  Do you have years of experience in a particular trade or field and are now an expert?  Maybe now you are thinking “Hey, I might start a business and make a living out of this.”  Your expertise and hard work are only half the battle.  Now comes the hard part.

Entrepreneurship can be a great source of income, pride and accomplishment.  It can also be quite challenging to run and maintain “the business side” of a business.  This is a common source of confusion and frustration for many new business owners, even for small, single owner operations and they often become sad statistics of startup failure.   It’s important to take steps to make sure you set yourself up to succeed from the beginning.

Here are some common snafu areas for many business owners which can make or break your new venture:

1.  The Business Plan – I know, I know.  You’ve heard it a million times but it’s all written down in your head.  Not only do you need one, you need to revisit it once a year and make sure that is consistent with helping you meet your objectives and goals.  I also recommend writing a “Vision Statement”, which is where you see yourself in 5 years, written in present tense.  For example:  We are the largest supplier of buttons in our metro area of _____ with revenues of_____ per year.  You get the idea. Only a concrete, well thought out goal can be obtained and be able to withstand any challenges.

2.  Taxes and Legal Compliance – Understanding your tax obligations and making sure you are in legal compliance is crucial.   From Federal to State level, there are income taxes, annual filings and reports (if you are incorporated), state Sales and Use Taxes, and Payroll Taxes just to name a few.  Even simple mistakes in any of these areas can lead to stiff penalties and fines, in some cases enough to force you to close your doors.  Even something seemingly as innocent as misclassifying an employee or contractor can have expensive consequences. Don’t get caught off-guard!  Consult an Accountant and/or an Attorney to plan your business, pick the right legal structure and get off to a good start.  You can also start with this FREE Virtual IRS Small business tax workshop available online, anytime.  Oh, and don’t forget about protecting yourself with good insurance!

2.  Accounting and Record Keeping – Not knowing where you stand financially is not only a common cause of business failure but frustration in general.   Having your data organized and keeping track of income and expenses can give you the tools you need to make decisions to steer your business in the right direction.  This will also help save you money at tax time by making sure you don’t miss any allowable deductions.  A good bookkeeping system can also help you with fraud detection and monitoring for theft (if you carry inventory).  This is definitely an area that you will want to hire a professional to help you with from the beginning.  If you weren’t an accountant before you started your business, you won’t be one after.  “Flying blind” will cost you far more in the long run than you’ll pay your bookkeeper.

4.  Marketing – Okay, so you’re awesome at what you do but who else knows it?  How will you reach new customers and let them know how awesome you are?  Have you taken into consideration an advertising budget to get your brand off the ground?  This is also an area where you may need to hire a marketing expert to help you.  With so many new online media streams to promote yourself, it’s important to have a brand or “image” and a consistent marketing message.  This could include everything from your business cards to your website (don’t even THINK about not having one), your social media campaigns on Twitter and Facebook, etc.,  and your blog (like this one I am writing).  There are also many free and inexpensive ways to get customers which are time consuming but necessary.  Word of mouth referrals and good old face-to-face networking are tried and true methods to meet potential clients and build relationships.  Remember, business is personal and these contacts will be key to your long-term growth and success in surprising and unexpected ways.

5.  Pricing Services or Products Correctly – This is a tricky one because so many variables come into play.  Your costs, your volume, and your competition should all be considered when trying to get to that “sweet spot.”  A break-even analysis will be an invaluable tool in helping you understand what you need to charge for each item or service and how many you need to sell just to cover your costs.  You need to know if your pricing structure is both viable and sustainable.

6.  Don’t Reinvent the Wheel – Chances are that whatever your business model is, someone else is already out there doing it and doing it well.  Take some time to talk to some folks who are already in the field and learn from them.  If their business is successful, it’s because they are doing something right.  You can always add your own uniqueness or improve upon “tried and true” formulas to make it your own.  It’s also equally important to use this learning opportunity to figure out what NOT to do and avoid costly mistakes.

Hopefully, you  have been doing research about starting your own business and haven’t been scared off or deterred so far.  Don’t be afraid to ask for help! If you are willing to accept that your dream of business ownership may come with some serious (but manageable) responsibilities, then you are on your way to having a successful future filled with unlimited possibilities.

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