5 Inevitable steps before launching a business

Launching a business often seems easier said than done. Our amazing and inspiring community of women entrepreneurs makes it seem effortless. Even when we hear how they struggled and the obstacles they had to overcome, it can still look like success came easy.

Or maybe that negative voice in your head, also known as imposter syndrome, is telling you that you don’t have what it takes to do what others have done. Maybe you feel that it’s easier for other entrepreneurs because they’re more skilled or more talented. But that’s far from the truth. We all are capable of success. If you want to learn the secrets to successfully launch your dream into a business, then read on as we share 5 key steps every aspiring entrepreneur needs to know.

“If you’ve been considering starting a business for some time, stop letting your fears and worries keep from making it a reality,” says Melinda Emerson, known to many as @SmallBizLady, on Small Business Trends.  She is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #Smallbizchat for emerging entrepreneurs on Twitter.

Manuel Martinez, president and CEO of the Los Angeles-based Success Training Institute, said, “preparation, preparation, preparation” are the three keys to successfully launching a business, during a  Money Talk on KCAA Radio segment.

While it seems prudent to launch a business during good economic times, “anytime is a good time to start a business,” said Martinez, who offers education and advice to small business owners. He said that success has less to do with the economy and more to do with being prepared. He stressed that the prepared entrepreneur will have the greatest shot at success even over well-established but ill-prepared competitors.

“Without proper market research and a solid business plan, a business is more likely to fail,” according to The Ultimate Small Business Guide. “The more advanced preparation that is done, the better the chances for success.”

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Preparation is key before launching a business, according to expert Manuel Martinez. (Photo by Daria Nepriakhina on Unsplash)

Being prepared means knowing as much as possible about a proposed venture. Entrepreneurs will significantly benefit from having firsthand experience with the type of enterprise being launched. Regardless of their business acumen, entrepreneurs who lack hands-on experience will be at a disadvantage over better prepared and informed competitors.

The following five key steps to help aspiring entrepreneurs prepare for a new business launch.

5 Key steps to launching a business

1. TRADE: Know the trade

Don’t assume that a decade working as a waitress or bartender provides the necessary insight and experience to successfully run a restaurant or bar of one’s own. There’s a lot more that goes on behind the scenes. Entrepreneurs need to know what it takes to run the entire operation.

Martinez encouraged entrepreneurs to “do something familiar,” adding, “Don’t do what you don’t know.” Those seeking to launch a business should spend time doing the work at a comprehensive level.

Entrepreneurs with no experience in a specific industry should seek a position to learn the business, spending sufficient time to learn about it from top to bottom. Once the doors of a new company are opened, plenty of day-to-day issues will pile up, without the owner having to learn the business from scratch.

2. LAUNCH: Understand exactly what launching a business entails

All small businesses require some form of licensing, such as a business permit, resale license or liquor license. Find out what necessary. Consult with a professional to learn the requirements. Reach out to organizations such as the SCORE and the Small Business Development Centers network of the Small Business Administration for free guidance.

FindLaw provides a list of commonly required licenses and permits, including state and local business licenses, registration for taxes, an occupational or resale license, a business name registration, and zoning, health, building and environmental permits. Business owners should carefully consider the licenses and permits required as well as the cost and time frames for approval.

3. COST: Estimate start-up costs

According to the Small Business Administration, “Since every business is different, and has its own specific cash needs at different stages of development, there is no universal method for estimating your startup costs.”

Entrepreneurs must create a budget and conduct a cash-flow analysis that begins with startup expenses, such as costs for permits and licenses, and extends past the anticipated break-even date. A business owner should determine needs versus wants when weighing where to spend cash and also allow for additional funds in case the break-even points arrives later than expected.

Appropriate cash management makes the difference between open and closed doors in the startup phase.

You might be interested: Alice Rodriguez: Overcoming obstacles and the power to succeed in business and life

4. BUSINESS PLAN: Create a business plan and follow it.

Starting a business and keeping it running is like maintaining a garden: To keep it healthy and producing fruit, it needs continual tending. Create a business plan and follow it daily, to develop the business, staff and products. Keep a finger on the company’s pulse and adapt.

“The importance of planning should never be overlooked,” according to TD Bank‘s website. “Taking time to create an extensive business plan provides you with insight into your business.”

5. RISKS: Manage risks.

“Make sure you are protected from anything that might take down your business that you worked so hard to build,” said Hunter Hoffmann, head of U.S. Communications at Hiscox Small Business Insurance of White Plains, N.Y., during a Money Talk radio interview.

“Entrepreneurs too often fail to properly insure their businesses,” noted insurance broker Dave Terpening Torrance, Calif., during an interview. “They roll the dice hoping for the best.”

“Insurance professionals can be great sounding boards to business owners,” he added. “An experienced insurance professional has seen and heard the horror stories and can advise new business owners on how to best create an affordable and effective risk management strategy.”

This article was originally written by Jesse Torres and published in 2015. It has been updated for relevancy. 

startups and entrepreneurs

7 Tips startups and entrepreneurs should consider to avoid going down

As a former member of SCORE, an organization that provides advice for startups and entrepreneurs, I used to talk weekly to men and women who were planning to start their own business. In a turbulent and uncertain economy, it might seem a great idea. Those who have an entrepreneurial spirit are enticed to pursue their dreams.

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Young or middle age, professional or skilled, men or women, it was always amazing to see how many of them have very unrealistic expectations about what entitles to run a business. Some not only lacked abilities and knowledge of the everyday operation but also the necessary assets and funding to start and sustain the business.

Many years ago, developing the vision and planning of my own business was a very exciting time. My thinking was “If I can do this for someone else, I can do it for myself.” I envisioned the perfect picture of a successful business but had very little idea of how to run it. Although I had excellent professional skills as a translator, I lacked the operational and financial acumen to pursue this new venture. I was lucky enough to get good advice and in time acquired that experience.

Most prospective startups and entrepreneurs find themselves at the same starting point. So the task of SCORE members is to “drop some bombs”. If you are thinking about starting your own business, considering these specifics might help you make a decision.

  1. You are your own boss and something else

Working for someone else is doing what you do best, and why you have been hired in the first place. When working for yourself, you dedicate 60% of the time –and sometimes even more– to tasks involving other professional skills such as accounting, hiring and managing people, marketing and selling, investing in equipment, and planning and evaluating your business. In other words, you become the CEO, the CFO, the PM, the OM, and the sales force of your business, and work an average of 60 to 80 hours a week. Are you willing to sacrifice time with your family and other activities to do so?

  1. Forget your vacations and other benefits for a long time

As an employee, you receive a salary, benefits, paid time off, annual vacations and probably some sort of health coverage. Startups and entrepreneurs might not have all those benefits for a long time until their business really takes off. Can you and your family be covered in someone else’s plan –your spouse’s, for instance? Do you understand you probably won’t have time or money to take a vacation for a long time?

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  1. You got a new family

Hiring and managing employees entitles not only to have a thorough knowledge about labor laws but also the skills to handle other people’s personal lives. You need to have good character judgment when you hire someone, provide training and tools for your employees to do their jobs, be ready to demand the right performance, and deal with their personal and family problems –most employees become part of “your” family. Also, you need the guts to fire them if the person does not fit in the company’s culture or you need to make business decisions. Are you ready to follow through?

  1. It takes money to make money

Startups and entrepreneurs’ new ventures usually require deep pockets. Unless you bring clients from another business setting, or you started a side business and then you expanded into a full-time activity, clients will certainly take time to show up. You need to build credibility and a brand name among customers. Overhead expenses can be very costly, especially if you have a “brick and mortar” location, which asks for rent, utilities, maintenance, and probably a considerable set up investment. Also, you need reserve funding to sustain your business during rainy days, and a substantial cash flow to pay vendors and employees.

  1. This or that?

Making sound decisions about the type of business you have in mind is a bumpy road. Starting as a consultant with a virtual office is cheaper and faster than opening a store in the local mall and buying merchandise. I advised a woman once who was crazy about a line of products she used and loved, and thought she could sell it; she was looking at a small store in a stripping mall with a monthly rent of over $2000. She was counting on her lifetime savings –not enough to sustain the business for more than three months– and credit cards for startup costs. She had a full-time job, good credit and never had retail experience before. I was torn because I saw a bleak future and shared my concerns with her, and that was all I could do. The decision, in the end, was hers.

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  1. Where is the boss?

Although you are the front face of your business, your best bet is to find and train people to step in at any time. Not an easy task, but learning to delegate was one of the most difficult lessons for me. Because you are so invested in your business –in money and expectations– it is very easy to take over other people’s jobs if you feel they are not performing at their best. So you end doing everybody’s job instead of steering the business, which is your main objective.

  1. Do not forget the big picture

Building a business you can eventually sell is something you might not have in mind when you start but definitely something to be considered. Life changes and although you think your business will last forever, your children might not be interested in following your steps, or you might get sick, or your spouse might have to move to another job and location. At those times, having the ability to sell your small business could become a better option than just closing the doors and letting go of many years of effort.

Keeping in mind these and other factors might allow you to develop a productive small business with realistic expectations, and avoid getting trapped in your own dream.