Legally Speaking: Tips for Starting a New Business
Recommendations When Starting a New Business
Starting a new business is a daunting endeavor! Creating a Business Plan will allow you to refine ideas, consider items previously missed, create a map to guide your next move, and increase credibility when seeking financing.
While you may have a great “napkin sketch” concept, the difficult process of turning an idea into reality can prevent the business from ever materializing. By getting the following down on paper, you can take your business from Idea to Reality:
- Executive Summary & Description. Create a snapshot of your business in summary form; what it looks like from the outside. Describe what goods or services your company provides, what differentiates you from others, and who is your anticipated customer.
- Market Analysis. Research your industry, market, and competitors. Describe conditions for a new player in your industry. What are the barriers to entry, opportunities, and threats facing a new competitor? Measure the strengths and weaknesses of your competition? Are there a few dominant players or many small players and how do the major players distinguish themselves? What is the overall size of the opportunity?
- Organization & Management. Determine how your company will be organized and managed. What business entity will you use? Corporation, Limited Liability Company, Partnership? How is ownership divided, and how is decision-making and authority divided? What happens if the unexpected occurs (disability, divorce, death) with one of the owners or decision makers? What is your succession plan?
- Service or Product Offering. Tell the story about your product or service. Describe what you sell and how its features, benefits, and advantages help the customer. Will you offer individual products, or will you bundle your products with others or with value-added services?
- Explain in clear terms why your business is unique. Consider the following categories of “competitive advantage” and which one you may fall into:
i. Cutting-edge innovation (Apple, Tesla, Facebook)
ii. Superior operational efficiency (Toyota, Amazon)
iii. Client-centric experience (Disneyland, HP Law ; ) - Articulate how YOU and your business partners are different from the competition (skills, experiences, relationships, etc.). Perhaps the most important thing you need to sell is YOURSELF!
- Define how you cater to a niche in the market, which areas are being ignored and what potential opportunities exist going forward.
- Explain in clear terms why your business is unique. Consider the following categories of “competitive advantage” and which one you may fall into:
- Marketing & Sales. Describe your sales and marketing strategy. What are your prices? Advertising options are almost infinite; create brand awareness and sales using social media, online ad words, SEO strategies, mobile apps. Consider whether print advertising or in-person networking will play a role. How will you distribute your product/service? Do you need a brick-and-mortar location, or can you operate as a virtual business? Beyond pricing, what is the quality of experience you wish your customers to have? Higher prices = expectations of higher service.
- Financial Projections & Funding Request. Have clear financial projections for revenue, expenses, pricing and profit. Know ahead of time how much capital you need to execute your plan. Will you seek funding by selling debt (loans) or selling ownership (equity)? Include everything requested by potential lenders or investors, or your request may fall to the bottom of the pile, or worse, into the trash.
The bottom line is that your business plan must stand out! It needs to be thoughtful, organized, and unique. Even if you don’t need outside funding, complete the business plan so you have a roadmap and the knowledge that you haven’t missed an important consideration. Afterall, isn’t your motivation for a new business a desire to…. Leave a Legacy, Not a Burden!
We are a local Glendale AZ firm dedicated to personalized legal services at a reasonable cost with a focus on Estate Planning, Probate, Asset Protection & Small Business Planning. We are committed to high-quality personalized service and look forward to talking with you.
You may also call us directly at 623-299-2722.
Sorry, comments are closed for this post.