Continuing the last post: How to start your own business from scratch and not fail
Part 4. Get Funding
Talk to your bank. Talk to a bank with which you already have a positive relationship. Ask about what types of new business loans they offer and how they can benefit your business. By using a bank you already know, the bank will have easy access to financial records and be more confident in investing with you.
Get local investors
If bank loans are not enough, look for local investors. There may be a local tycoon or other equally wealthy person who would have an interest in your success. Research people in your area who may have the funds and motivation to help you.
Look for venture capitalists or angel investors. Angels are high-net-worth individuals and venture capitalists are companies. They both finance a promising high-risk company through an ownership interest (partnership) and often bring their experience, management skills, and contacts to the table. They usually work through a network or partnership.
Get close to friends and family
People who have known you for a long time are more likely to have faith in your ability and intentions. These are also the people who are likely to support you if things get difficult in the early stages of your business or you need to raise more money. However, make it clear that the money is intended as venture capital and may be lost entirely or may not be returned to you in the short term.
Use a multitude of funds
If you still can’t get enough funding, use websites to raise the money you need to get started. These funding sources have several advantages: you won’t have to pay interest on the money you receive (since it’s money that is used to provide real products or services) and this will help you not only to measure your interest in what you have to offer, but also to help you build a customer base. You can start your business with hundreds or thousands of customers who are already lined up and ready to tell others about what you have to offer.
Determine the legal structure
Decide which form of ownership is best for you: a sole proprietorship, a partnership, a limited liability company, a corporation, an S-Corporation, a nonprofit organization, or a cooperative.
Register your business name
If your proposed business name is available, register it with the “county clerk”, trademark on the state and federal levels and secure a domain name.
Take advantage of free resources
Many free resources can offer advice, training and assistance. Here is a list of over 300 great free things for entrepreneurs and startups.
Most likely your original idea will have to be modified. Being able to bounce back and adapt to create what customers want will determine whether your business will fail or succeed.
Regardless of the source of your fundraising, be sure to provide key strategic and operational accounting information to your funders on a regular basis, usually twice a year. It’s a good idea to organize a board meeting if everyone can physically attend. If not, you can do so via teleconference.
Part 5. Build infrastructure
Get an office
If you are not making any deposits, then don’t worry about an office or warehouse yet.
You will need a space from which to run your business later. This can be a home office if you require little space and have no employees, or it can require a whole workshop or warehouse. Look at renting in a low-cost neighborhood or business incubator instead of a fancy address. Some universities leave space available for low-rent new business ventures based on an innovative scientific idea. It depends on what you do and how big your business is going to be. Make sure the space is coded and legal for how you intend to use it and within your budget.
Purchase of equipment
Buy all the things you need to start working. This can mean mechanical equipment, computers, telephone, or supply ship. It all depends on what you are doing. Try to buy from commercial supply companies as they will have significant discounts. If you are short on capital, leasing or renting is an attractive option so you don’t block your funds.
Create a system of records
From doing taxes to finding out why she mysteriously misplaced $2,000 to searching through customer records to find out if Mrs. Jones actually paid her bill, you’re going to want a good record system to help your business run smoothly and efficiently. Invest in filing cabinets, labels and digital records software to keep you organized and on top of things.
Part 6. Build a Customer Base
Use Marketing and Public Relations
You want to reach potential customers in ways that make them want to use your business. This is especially important when you are just starting out, before you have established a regular customer base.
Advertise in a way that captures customers’ attention to the minimum and hopefully goes beyond capturing their imagination. Be creative and appeal to the right aspects of the customers you want to use your business for.
Offer free samples of what you do to the right people, in order to get people to say good things about what you have to offer. Word of mouth (i.e. good public relations) is the best way to attract new customers. If you get bad reviews or negative comments, respond positively and fix the problem. People will be much less critical about mistakes if they are willing to fix them.
Use a little network building
Go to conferences, charity galas, meetings with complementary companies and anywhere your clients are likely to be highly concentrated. In other words, go out in public and interact with people. Use your friends’ connections to meet people who may be able to help you. This type of interaction is very important for starting a business. It can’t exist in a vacuum after all.
Have great customer service skills
to be good at interacting with people. Practice reading between the lines of what people are saying. Learn to meet needs you didn’t know you had. Find out how to make people happy. Be charming. Most importantly, be humble. The customer may not always be fair, but you must be able to let them think they are.
Deliver the product or service quickly
Your business is a work in progress and if you launch your product or service quickly, you will be able to create a community of customers who can provide valuable information that can help you improve your offerings. In the words of LinkedIn founder Reid Hoffman, “If you’re not embarrassed by your first product release, you’ve released it too late
Have a website
The world has moved online. Any company that wants to survive the next ten years is going to have a website. People will use it to contact you, find your location, know your hours of operation, ask you questions, make suggestions, and maybe even buy your products or services. By having a website and services that are available through the internet, you will be able to expand your service area throughout the region, or even the world.
Have a logo
One of the most common tasks when starting a new website, a blog or a common site, is to create a logo for the site. Depending on your artistic talent, creating logos may be something you can do in your dream or it may be something that gives you insomnia.
Have a blog all the time
Don’t be ashamed to share your triumphs and struggles. Customers will enjoy your honesty.
Find the right employees
Hire the right people for the job. Even if it is your business, you will not be trained in every task, which is why you need qualified people to complete the job.
Hire a copywriter
Unless you’re an excellent writer, hire a copywriter to write highly targeted client emails. A copywriter will also be useful for press releases and other pieces to spread brand awareness or provide business updates.
Don’t be afraid of the competition
Don’t badmouth the competition when talking to investors or customers. There is no need to become an object of pity. Indeed, talking this way could even point customers to a competitor who may offer a product or service you do not have. Remember, when there is competition, there is a market for your business. Use that knowledge as inspiration to beat a rival.
Benefit from word-of-mouth
There’s nothing better than good old-fashioned word-of-mouth marketing. Let your friends, family and influential people in your field spread the word about your product or service.
Say goodbye to your social life
You’re going to spend a lot of time on business. Even if you plan to go out at night, you can leave early because a light bulb is out. Let’s hope the people closest to you in your life will understand.
Part 7. Get paid
Don’t let other people take advantage of you. Demand payment within a specific period of time (whatever is appropriate for what you do). Send people a bill as soon as possible. If someone is late with a payment, talk to them. If you ignore these problems in hopes that they will go away, you will find yourself working for free and your business will fail.
Accept credit cards
Very few people pay for products or services with cash. It will be much easier for your business, as well as for record keeping and accounting, if you accept credit and debit cards. If you want to save yourself ridiculous fees or keep your business more mobile, consider using the Square. This device connects to a smartphone or tablet and allows you to swipe the client’s card.
Set up an online system
If you plan to have products for sale online, you will need to make sure you establish an agreement on the online payment system. Services like PayPal make this incredibly easy. Research to find out which method is best for you. However, make sure that any system you use is secure. You don’t want your information or customer information to be hacked or exploited.
Make sure customers pay their bills
Always be sure to receive payment for your products or services. Instead of being taken advantage of, set a deadline for payment. It would also be nice to accept credit cards and have an online payment system.
Always keep in mind that success does not happen overnight. It’s going to take some time before you realize a benefit.