Starting a Company

If you’re sure of your idea and the market conversations you’ve had with potential customers and investors seem promising or, better yet, indicate momentous demand, you could consider bypassing the “build a business” phase and going straight to building a company. This would include securing funding from venture capitalists, working with a partner (or partners), staff and a board of directors to build on the direction of the company, and develop products and business structures that support long-term and lucrative growth.

There are a ton of benefits to growing your smaller business into a large, sustaining company including:
Resources. With the right combination of both technical and personnel resources, you can do almost anything to scale your business into a full-fledged company. This means you can execute on multiple products and businesses, helping you move quickly in the right direction and grow your reach. You likely have access to a broader range of market feedback too, which you can use to expand your footprint or create new products when you sense a trend. This also means you can be selective with customers — dropping dead customer weight and executing for the right market will help you reach those profit levels we dream about.
Creating a culture. By hiring a full staff – the right employees to fill the right roles at the right time – you’re also able to chart the culture of your company, and can build success based on the strengths of your workers. It may seem “corporate” to start writing down mission statements, values, and policies, but it doesn’t mean your company has to become boring. Many companies, from Zappos to Hubspot, are well known for their employee-centric approach toward building their company. When you invest in your people firsthand, you’re often rewarded in more ways than when you invest in your customers.
As with businesses, the drawback of starting a company can be cruel:
You need a lot of money. Friends and family likely won’t be your backbone here (unless you’re friends with investors and your family is generous with their wealth). Getting a company off the ground requires staff, technology, and systems. Scaling a company from there requires sales and marketing (and more staff, technology, and systems). All of these things require money. Getting funding through VCs isn’t impossible, but it’s certainly competitive. Securing capital means having a clear vision for how you plan to put it to use; there are a lot of challenging conversations that will happen on the road to getting funding.
Failure’s ripple effect. By delving into a market with one offering or one core business, you may find that your company is not nimble enough to build new businesses or adapt to the market, particularly if you raise enough money to gather a large staff right out of the gate. Companies often need time to develop processes for product development, deployment, customer acquisition, and plans for growth, and inefficiencies could be the downfall for any company that isn’t quick to adapt. Any failures (small or large) are under a microscope for investors, media, staff, and the public to see.
Only you know what the right move is for you. If you’re 98% sure of your business and its potential for growth, then its potential to be a company in the future should play a part in some of the decisions you make now. On the other hand, some folks might find it’s a better decision to “go big or go home” and emerge with a company right out of the gate.
How will you start out?
Photo credit: theatlantic.com, taprootfoundation.org

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Starting a Business

When you start a business, you’re concerned with addressing customer pain points, product development, feedback and marketing and selling your offerings. Generally the intention is to start small and remain nimble, and grow through trial and error. You can grow a business into a company as your processes evolve and improve and you hire more staff.
Though there are a number of benefits to starting a business, there are two in particular that stand out as significant reasons you may want to grow a business first:
Satisfaction. Particularly for someone who is starting his or her first business, it’s incredibly rewarding to be at the helm of a new business that grows and is successful. This product or service is possibly built on your vision alone, and positive reactions by customers might be the best validation for taking on such a risk.
Being your own boss. When you start a business, you control everything, from your time to your income. Having the flexibility to say what happens when and where can be freeing and oftentimes promotes increased productivity and a greater focus on work/life balance.
There are also a number of drawbacks when it comes to starting a business:
You’re bootstrapped. You may have secured some money through small business loans or lines of credit, or even self-funded if you had the means. But to be a small business owner is to be obsessed with your bottom line. This may hinder your progress if you find you don’t have the resources to grow in the form of staff, technological developments, or fine tuning your own skills.
Responsibility. Okay, responsibility in and of itself isn’t a negative thing, but if you’re working on your own to start a business, you’re responsible for its success. This means your interpretation of the marketplace could be way off, or you may have grossly underestimated your start-up costs. There are many variables to consider when starting a business, and if not assessed properly, your own strengths and weaknesses may not be the winning combination to support a successful business.

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Starting a Business: Where to Begin?

At some point in your life, you’ve probably had a brilliant idea about starting a business. You shared it with friends and family, smiled and remarked how perfect it would be if “that” existed or how great it would be to work for yourself. The next morning, you woke up, battled your commute, and wondered, “What’s stopping me?”
Seeing an idea through to fruition isn’t easy. Starting a business can seem complicated, overwhelming, and time consuming. Imagine all of the brilliant business ideas that haven’t been introduced to the world yet simply because people have no idea where to begin. We can help.
You can start a business by taking these 6 steps. Each one gets you a little bit closer to realizing your dream. Stop daydreaming and bring your brilliant idea to life:
 
Step 1: Create a Business Plan
It’s crucial you have a keen understanding of your market, and be prepared to articulate what sets your products and services apart from others. In any industry, it’s not important to be first, but it is important to offer value that differentiates you and draws customers in.
Look into the many elements of what makes a complete business plan and leave no stone unturned. Visit the Small Business Administration site for guidelines or templates and speak with mentors through score to get feedback on your first few drafts.
Step 2: Seek Assistance and Training
Both the Small Business Administration and SCORE offer counseling and training, which include free online courses where you can go at your own pace, as well as local workshops. Seek out classes or assistance in areas where you may fall short as a small business owner. This can include management, sales, marketing, legal, budgeting and more.
Step 3: Get Funding
If you’re not able to fund your own small business idea, particularly if you want to launch a product, research the options that best suit your endeavor. Your first thought might be to secure a small bank loan or line of credit. Research the websites of major banks or local lenders, and speak with a representative to uncover what an ideal business loan application looks like.
Alternatively, you may want to try to get in front of venture capitalists if you feel your idea has the potential to make a lot of money, be sold to a larger company, or one day go public. Unlike a loan, which has payment terms and a set payback date, VCs measure their returns as a function of the company’s future performance. You can partner with active investors, who expect to play a significant role in the direction and function of your company, or passive investors, who give you the initial funds to create your idea, but allow you to run with your idea.
Step 4: Determine Your Legal Structure
There are a few housekeeping items that you have to take care of in order to establish your business with the government and structure it for future growth.
Step 4a: Access the proper filing forms through the IRS or refer to your state’s website to find out the exact process of filing your business entity. You should find this information under your county clerk’s office or state government website.
Step 4b: Register your company name (often called a “Doing Business As” name) if your company name is different than your own personal name. Each state has different requirements; visit the Registering Your Doing Business As Name guide to see if you need to take this step.
Step 4c: Get an EIN. One must be secured in order to do things like open a bank account, apply for business licenses, and file your tax returns. You can apply for an EIN for free online through the IRS website.
Step 4d: Familiarize yourself with your state’s Tax obligations. You’ll need this information in order to collect sales tax from customers, pay income tax, and understand employment taxes.
Step 5: Licenses & Permits

Depending on the industry and location you are launching your business, you may need to be licensed at a federal or state level. If you’re getting involved in a heavily regulated industry — such as alcohol, agriculture, or transportation — you’ll likely need federal licenses to conduct business anywhere. Review the SBA’s licensing database to find out what licenses and permits apply to you.
Step 6: Get Help
When it comes to starting a business, if you can’t do something or can’t do it well, you’re wasting time. The most successful small business owners don’t try to do everything themselves – it’s unwise. Starting a business requires many different skills, and most people don’t excel at all of them. If you’re not excelling after going through training as described above, or cannot find the time to complete certain necessary tasks, hire someone to compliment the skills you bring to the table. Building a business will require that you rely on a stable of experts to get you where you need to be – this board of individuals might include a lawyer, tax accountant, finance and accounting professional, web designer, marketing specialist, or virtual assistant. These people will likely be independent contractors or vendor partnerships, but some could be in-house employees as well.
Learn more about starting a small business at business.com.
What other steps might you take to bring your big business idea to life?
Photo source: beginnersinvest.about.com, intuit.com

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