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Common Start Up Mistakes

June 11, 2012 By Leave a Comment

When it comes to starting a small business, many people make huge mistakes that doom the operation from the beginning. This is obviously affected by the type of business that you are running, but many of the general mistakes can be applied to a wide variety of industries.

If you are deciding to go into business for yourself, you probably have a good deal of confidence in the industry or market in which you are operating. This is a definite factor and a big plus for your company. If you are trying to start a business doing something that you have no clue about running, the learning curve is harsh and unforgiving. Don’t get me wrong, taking chances is usually the way to get ahead; just don’t get in over your head in a trade that you know little about.

On hand cash is a major downfall for many startup businesses; the lack thereof is the problem. In general, you should not plan on making a profit for at least six to twelve months into your operation. This is dependent on your type of business, but is a good rule to follow. You must make sure that you have the capital to operate for this period of time without having any positive cash flow. Paying your employees, rent, purchasing inventory and buying or leasing necessary equipment is a major consumer of the company’s cash flow in the early stages.

These expenditures never disappear, but in time your company should be bringing in the cash to maintain these costs, with money left over to grow. The key factor is realizing that the positive cash flow will take some time to generate. Buy having the reserves for at least six to twelve months can be the difference between getting off the ground and closing your doors.

Growing too fast is another major downfall for the upstart business. Of course, everybody wants their business and profits to grow. The key to pulling off proper growth is patience. I have personally witnessed many businesses going out of business because of this fact. You are in the position to grow because you are doing something right to start with.

When a company grows too fast it can cause the quality of your services to decline by not having a true grasp on the growth of your company. The details are missed, the proper personnel are not up to par as your core group was, you start cutting corners to maintain deadlines, ect. This can be easily avoided by planning your growth in a detailed and maintainable fashion. Be sure that you have a grasp on where you are going and how you will obtain that objective in the same manner that your success was accomplished in the first place.

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Things to Remember When Starting a Home Business

April 30, 2012 By Leave a Comment

A lot of small business owners will start their companies from in comfort of their own homes. It allows them to save money while establishing the necessary contacts and client base they need to expand into a successful business. During this time it allows the business owner to scale his business at a rate that matches the demand of his business. It is a great way to get your feet wet and learn what things you are going to need to expand, and gives the owner the skills to run his own business. The owner will be able to do every task in the daily operations and once the company is ready to hire additional employees, the owner will be able to supervise the daily operations in confidence.

Often times, small business owners are unsure about the types of services or products the company will need in order to protect itself and remain successful. A home based business owners may not consider looking into a business insurance policy to cover any products, services or contact they have with other professionals. While it is true that your home owners insurance policy may cover a vast majority of the items within your home, there are some aspects that it will not cover. If you have clients over to your home for business purposes or have something delivery for your business by FedEx or UPS and someone gets hurt or injured, your home owners insurance will not cover those costs or expenses. Those injury claims will fall directly on the business and ultimately, the owner.

You can find several insurance policies to cover the needs of a home based business, most of which are fairly inexpensive. Some of these policies will only cost the home business owner, about a hundred dollars per year for a bare bones basic policy. You can also get several advanced policy options that will cover a great range of services for your home business, such as any additional employees that you may hire or equipment. It is really a matter of what kind of coverage you want and are able to afford. The best thing to do is to contact a local insurance agent and see what kind of coverage options are available in your area and find something that is going to work well for you. An injury claim can bankrupt an uninsured business quickly, and a hundred dollar a year invest to protect your business is well worth its weight in gold.

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How to choose the right name for your business

May 18, 2011 By Leave a Comment

Name TagSo you’re just starting out and one of the first decisions you have to make is what the name of your company will be.  This is going to be the first of many challenging decisions you will have to make as an entrepreneur.  Some say that your name can make your or break you.  I have actually seen it work both ways.  A lot depends on your company, your market and your potential customers.

If you are going to market to consumers, you might want to consider a short, easy to remember name that can be made synonymous with your industry.  As an example, think of Tire Rack – when you hear that name, you have no doubt that their primary business is selling tires.

Here are some other things to consider:

  • Is the name you’ve chosen available? You may want to consider using a company such as CorpNet to help you search to make sure that your name isn’t already taken and help you register with the state, IRS and local authorities.  Companies like this can save you a lot of time and headaches and are usually well worth the investment.
  • Will the name you’ve chosen work online? For some people this comes as an afterthought.  Before you decide completely on the name, think about your web site (you WILL have a web site, right?) and run a quick check through GoDaddy or Network Solutions to see what’s available.  TIP: make sure you don’t make it too hard to remember – your website doesn’t always have to match exactly.  Think about it – which of these is easier to remember:  peteshoemacherlawnserviceinc.com or petedoeslawns.com.
  • Can you create an identity for your company? Choosing your company name is just the first step toward creating your brand.  Eventually you will need to create business cards and in some cases letterhead and other stationary.  While you can go to your local office supply store and use their old-school clip-art, you may want to consider using a company like LogoWorks who can help you create a true identity that is unique to you.  Sometimes, however, going through this exercise makes you realize that branding the name you’ve chosen might not work – look at the lawn care example above.

We hope this guide has given you a little insight and assistance with selecting your name.  Be sure to read the other helpful hints we have here to get your business started off on the right foot.

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