What does it take to open a business? That is the million-dollar question for anyone that is interested in starting a business. Regardless of what industry you are considering, you will need to take some of the same steps to open a business.
Of course, there are also industry-specific things you need to do to open a business. A quick review of the things you need to do to open a business that is both general and specific will get you prepared.
The General Tasks First
Regardless of what type of business you plan on opening, there are some basic things you need to do to open a business. Some of the things you need to do to open a business are research-based while others are action steps that you need to take.
Research is your friend when you are trying to open a business. The more you know about your industry, the demographics your business will serve, and how many other like businesses are in your area, the better you can plan.
Doing the research into what your competition has to offer in the area is a good way to figure out what added value your business can offer to make you competitive. For example, let’s say you are considering a commercial plumbing company. Offering better prices for your plumbing services than your competition offers can make your business more attractive to customers.
Another example of figuring out what added value you can offer would be if you are considering opening a landscaping company and researching whether your competition offers hardscaping as part of their services. If they do not, that may be the service that sways some of the available customer bases in your area.
Research will also provide you with information about what you will need to open a business including:
- Start up costs
- Inventory
- Tools
If you are starting from scratch and have limited knowledge of what it takes to succeed in the industry, research can be a very valuable tool. Of course, knowing what you will need to open a business is only part of the process. The next part is the action part.
You Have to Take Those First Steps
The first steps into any new venture are undoubtedly the toughest. Whether you have years as a commercial roofing installation contractor or not, it does not make it any easier to venture out on your own and leave job security behind.
One of the best pieces of advice when it comes to how to open a business is that slow and steady wins the race. Starting that commercial roofing service can be a rough go at first as you are trying to line up new jobs and learn the ropes but if you are committed and keep plugging away you can find the success that you need.
Of course, success starts with those critical first steps. Here are some things that just about every person should do to open a business:
- You will need some sort of licensure and insurance. No matter what type of business you plan on starting there is likely a state agency that you need to register your business with or you will need a business license. You will also need some type of business insurance.
- You should keep your business finances and your personal finances separate. Every business should have business financial accounts.
- You will likely need start-up cash. Whether it is a small business loan or “investments” from family and friends, you will have to dig deep to finance your business at first.
Every type of business needs to be registered and licensed. You will need a tax ID number for both federal taxes and state taxes. If you want to open a business you should also become well versed on how the business taxes work in your state.
All of the above will be among the first steps you take to open a business. It is not all “business” though when you decide to start a business. Some of those first steps can be fun, like naming your business. You will need a name for your business, a logo, and to decide on your “corporate culture”.
It Takes a Team
No one builds a business alone. We have all heard about those overnight successes but in almost every case, that overnight success has been plugging away for years and has a team of people behind them.
Let’s say you want to open a bail bond company. You can gather most of the information you need to open that type of business but the fact is because of the specific nature of that business you will need some professional support to ensure that you stay within the letter of the law.
Bail bonds people rely heavily on attorneys not only to ensure that they fully understand the law but attorneys often refer clients to bonds people. It takes a team effort to really find the success that you are planning, no matter what industry.
Another good example is starting a business as a commercial electric service. You may be a whiz at kilowatts but how are you at human resources? How about payroll? Do you understand the tax laws enough to feel confident that you can file your own returns? Probably not, but there are professionals that can help you manage the business end of things while you are out there wiring all the new malls that are going up.
The point is to open a business and do it right you will need to rely on other professionals that are experts in their fields to help you focus on your core business. Establishing relationships with professionals that can help you manage your business early on will ensure that you are well prepared to be successful.
Supplies, Tools, Equipment, and Inventory
Whether you plan on opening a commercial paving services company or you want to open a hair salon, you will need equipment, supplies, and tools to open a business. Every industry has its own specific set of tools and supplies that they use.
What if you are not in a service industry and you are considering opening up a retail business. The fact is you will still need tools and inventory. To open a business you will have to connect with:
- Vendors that can provide you with supplies or inventory.
- Distributors that offer the tools of your trade.
- Equipment dealers if your industry requires equipment.
If you did a good job in your research phase then you should have a tidy list of all the goods you will need to open your business. You may have some flexibility in what you need to get started but you should have a list of needs.
Of course, your start up costs will greatly be influenced by what you need to get started, however, there may be some ways to save. It is important that you investigate all your options. For example, a commercial flooring contractor can save some money initially by renting equipment instead of buying it outright.
Leasing equipment instead of having to pay for it outright can work to your advantage in many different industries from restaurants to a commercial painter business. Looking for the best deal by examining all the options is the best way to find savings.
In many cases, vendors will also work with you to limit out of pocket expenses. A commercial painter may be able to get paint at a deep discount or even take the paint on credit with an agreement to pay after the job is done. Ultimately, there will be costs associated with getting your business off the ground but you may be able to keep costs down by shopping your options.
How Will You Find Customers?
If you want to open a business you have to have a customer base. How will you reach those customers? If you think in the early stages it is too early to start marketing your business, you are way off. It is never too early to start getting the buzz going about your business. Building up anticipation about when your business will launch will ensure that you have people lining up for your business long before you open the proverbial door.
Remember how we talked about getting professional help and building a team when you want to open a business? One of the most valuable members of your team is a marketing professional. The sooner you can get a marketing agency on board the better.
Marketing experts are the professionals who can help you to determine the demographics that you want to attract to your business. They can data mine for you so you do not have to. They can help you to better understand your competition. They can help to brand your business early on so there is that build-up of anticipation with consumers.
There is no doubt that to open a business, no matter what that business is, you need to be able to reach consumers and get them interested in your new exciting brand. Marketing companies specialize is getting people excited and engaging with your audience.
To open a business you have to have a marketing strategy in place to ensure you can find the customers that you need to make your business a success. Make partnering with a marketing company early on in the process a priority.
Human Capital
We talked about partnering with professionals that can help you to achieve your business goals, now let’s address the human capital you will need to invest in. What is human capital? It is the people who work for you.
Even the smallest of businesses will have at least one other employee besides the founder. Let’s say for argument’s sake you went with that landscaping business plan. You cannot take on all the work on your own, you will need at least some help.
To open a business you do not need a degree in human resources but you should have some knowledge about:
- How to do background checks or find a company that can do them for you. You want to make sure you are hiring people who will not tarnish your business reputation.
- State employment laws. Educate yourself about what state employment laws are specific to your industry. For example, for that landscaping company do you have to provide safety equipment? How many breaks do you have to allow?
- What type of taxes do you need to pay if you have employees?
All of the above is general information that you should gather if you are going to hire anyone to work for your business. It is vital that you have a good understanding of your responsibilities as an employer. It is equally as important that you learn how to negotiate with employees about salary, scheduling, and more.
As an employer you are in a unique position that can leave you liable if you do not follow your state employment laws. This may be a completely new role for you, if it is, you may want to contact an employment law specialist that can walk you through your responsibilities.
Always keep in mind that anyone you hire is going to be a direct reflection of your business and they can make or break your reputation with your customer base. Doing a background check and always checking references is a good rule of thumb to follow. You will likely be highly dependent on your first few employees. You do want to take the time to make sure you are hiring the best-qualified candidates that will make your business shine.
No One Said It Would Be Easy
In the US there are approximately 30 million small businesses. Anyone of those 30 million-plus business owners can tell you that it is not easy to open a business but the rewards for those that put the hard work in can be tremendous.
Opening a new business is not for the faint of heart and it is not for anyone who wants to take shortcuts. Being your own boss is still a lot of work, but at least you get to reap all the benefits and have the complete possibility of expansion and growth. Opening your own business is well worth the work.
