How To Start A New Business

Are you thinking about starting a new business? While the process of starting a new business is actually pretty easy, there are some steps that you'll want to make sure you tackle in a particular order, such as:

1) Registering the business with your Secretary of State

2) Applying for your EIN number online

3) Opening your business bank account

4) Requesting your company's Dun & Bradstreet D-U-N-S number

5) Opening your first business accounts

But the more detailed knowledge that lies beneath those first steps can be a little tricky. That's why I've put together a list of tips and techniques to help you get through that process, and through it the right way.

It doesn't matter if you are 30 or 60, mentioning to friends and family that you're thinking about starting a new business may elicit a variety of responses ranging from encouragement to astonishment, from cheers to groans, from celebration to condemnation. In my case, it was that obnoxious relative across the table who whispered under his breath "At your age?" Well, here's a little insight. Don’t let those naysayers hold you back. Your age, enthusiasm and experience are absolutely the greatest competitive advantage you will ever have!

Several years ago, Benjamin Jones, a professor of strategy at the Kellogg School, partnered with Javier Miranda of the U.S. Census Bureau and MIT’s Pierre Azoulay and J. Daniel Kim, to research the age-old question: "What is the average age of the most successful entrepreneurs?" Here's a small segment of what their study of 2.7 million company founders revealed:

How To Start A New Business

Go with what you're passionate about

The most prominent successful entrepreneurs always put one rule at the top of their list: Do what you love. Researchers found that new business founders with three or more years of experience in the same industry as their startup were twice as likely to have a one-in-1000 fastest-growing company. While much of that success can be attributed to the hands-on, on-the-job experience they have gained over those years, the rest comes from the passion they have for what they do and their willingness to expand their knowledge. Remember —at your age— you have already spent enough time begrudgingly finding successful ways to bring other people's goals to light. There will be long days, low energy, shrinking budgets, missed opportunities, second-guessing and self-doubt. Your passion for what you do will carry you through when everything else is weighing on your shoulders.

Study up to meet your entrepreneurial goals

The fact remains: You don't know what you don't know. While you may be uber-experienced in the day-to-day operations of your specific position in the company, how much do you know about everyone else's tasks and responsibilities? My oldest brother owned several small businesses over his lifetime. We were discussing business ownership over lunch at our favorite Mexican restaurant when he pointed to a woman making tortillas behind the counter. "She may know everything there is to know about making the best flour tortillas, but that doesn't mean she knows how to run a business making tortillas." A successful business owner is always looking for solutions, making notes, revising plans, seeking out opportunities, and growing their knowledge to cover every element of their new venture, no matter how small, tedious or distant the possibility. But we have an advantage our parents and grandparents didn't have. We have the internet, and it is opening doors to an expansive database of on-demand knowledge that is invaluable when you use it to broaden your skills and capabilities.

Build your business credit from day-one on

Building new business credit should start on day one, before you register your business name, apply for your EIN number, open your business bank account, open your first tradelines, buy your first inventory, pay your first bill or even make your first sale. Establishing an early business credit reputation is crucial for accessing future financing, getting better terms on loans and insurance, and demonstrating financial stability to partners and suppliers. A strong credit profile separates your business's finances from your personal finances, which helps protect your personal assets and creates a more professional and credible image for the business from the start. This early action can lead to significant advantages like lower interest rates, improved cash flow management, and the ability to scale and seize opportunities as they arise. You can then leverage that business credit history to secure business loans, lines of credit, and credit cards, especially for expansion, inventory, or covering operating expenses. Everything you do in those first stages of running your new business will lay the groundwork for your company's financial future. Better management of these first steps will lead to better corporate credit scores and ratings that tell future lenders that you are an educated, elevated and responsible business partner.

Keep a notepad on your nightstand

Have you ever been jolted alert just before you fell asleep with a great idea or an elusive answer to a challenging situation? Scientific studies support the idea that the period right before people fall asleep, known as the hypnagogic state (N1 sleep stage), is a creative "sweet spot" for generating new and innovative plans or solutions to problems. Research shows that the phase before we fully fall asleep is hugely creative for our brains.

During the N1 sleep stage, brain activity shifts, cognitive filters relax, and the mind is more open to unconventional ideas and abstract thinking. This mental state allows for "free association" where the brain links seemingly unrelated concepts in novel ways, a core component of creativity and problem-solving. Allegedly, Thomas Edison, Albert Einstein and Salvador Dali all practiced intentional hypnagogic sleep by drifting off while holding a heavy sphere in their hands. When the sphere dropped and rolled onto the floor, it would jolt them awake and they could quickly capture those prominent, creative ideas or images to paper. In essence, "sleeping on it" actually does work, especially if you can capture those fleeting insights that occur in the moments you're drifting off to sleep.

Outline your business plan in advance, but update it in real time

This approach merges strategic foresight with tactical adaptability. An initial business plan outline provides a clear, logical framework covering all essential components, such as your proposed executive summary, market analysis, organization and management, service or product line, marketing and sales strategy, and financial projections. The process of creating the initial plan forces you to articulate your long-term goals, target market, and unique value proposition, ensuring everyone involved is aligned from the start. Having this comprehensive, well-structured plan ready makes your business appear professional and prepared, which is crucial when seeking funding from lenders or investors. The business landscape is dynamic. Performing real-time updates ensure your strategies remain relevant to current market conditions, competitive actions, and technological shifts. As new performance metrics, sales figures, and customer feedback become available, integrating this data into your plan immediately enables more informed, agile decision-making. A "living document" facilitates continuous tracking of key performance indicators (KPIs) against initial projections, making it easier to hold teams (and yourself) accountable and measure actual progress.

Don't cut corners

In business, legitimacy is everything. Taking shortcuts undermine your company's legitimacy. They cast doubt on your authenticity, cause delays in your progress, bring added scrutiny, breed suspicion and cause confusion to potential vendors, creditors and customers. To build strong and supportive business credit scores, your company has to bring certain standards to the table, such as stability, credibility, validity, trustworthiness, integrity and verifiable data. When these standards are in full view, creditors know your company is not a risk to them or their bottom line.

Read More: https://www.starpointcreditsolutions.com/post/how-shortcuts-undermine-your-company-s-legitimacy

Whether another company pulls your business credit report, asks for a list of credit references, checks your company's corporate documentation, or requires a verified link into your business bank account, they are hoping to see a crystal clear, transparent path that started on day one and has continued straight through to where you are now. No clouds. No hiccups. No questions. No confusion. Just bold, strong, solid black ink on white paper.

Plan for the obstacles

Like anything else in life, starting a new business will bring obstacles that need to be overcome. It is crucial that you have a clear-eyed, strategic plan in place to deal with those obstacles.

• Financial hurdles

Over half of businesses fail because of poor cash flow and a lack of a realistic operating budget. Entrepreneurs often face a lack of initial funding for startup costs and operations, leading to the inability to sustain the business until it becomes profitable. They are ill-prepared for the loss of the steady income, health insurance, and other benefits that come with a traditional job.

• Planning and strategy

The second most common cause for new business failures is inadequate market research. It is imperative that you fully understand the target market, customer needs and competition to avoid a misaligned product or service. A lack of a clear, comprehensive business plan can lead to a lack of direction and poor decision-making. Launching a business into an established market requires an in-depth plan to create a competitive advantage and stand out from competitors.

• Operational and regulatory challenges

Navigating complex regulations, bureaucracy, and policy uncertainty can be a significant barrier. By arming yourself in advance with as much knowledge as possible, you'll be able to spend time efficiently running your business, building your team, finding and training the right employees, and creating a long-term, effective marketing plan that adapts as the business grows.

• Personal and mindset challenges

While a lack of prior experience can be a substantial barrier, self-doubt is the internal demon that can hinder your progress if you let it overwhelm your overall goals. Create and maintain a strong work-life balance. Starting a business demands a lot of time and effort, and that can sometimes make it difficult to establish a healthy routine and maintain boundaries between work and personal life. Take stress breaks. The sheer volume of work and stress involved can be a deterrent. You can overcome these obstacles by creating professional, colorful motivational materials that remind you of where you came from, why you started, and the faith you had to eventually reach your goals.

Spend more time on your company than your competition

Thirty years ago, I had a client who owned the most popular pizzeria in a tourist town crowded with chain restaurants and pizza joints. We were outlining her marketing strategy for the upcoming tourist season when I mentioned a "weekend special" one of the chains was running at the time. She shook her head and responded,

"Every minute you spend worrying about their company is one minute you aren't spending on your own."

Back then, Barbara understood that while it's important to be aware of the competitive landscape, an excessive focus on competitors can lead to a "reactive" rather than "proactive" business strategy. She preferred to focus her time and resources on her own company and customers rather than on the competition. Years of experience had taught her that internal focus drives innovation, builds stronger customer relationships, and enhances operational efficiency. The most successful businesses focus on creating value for their customers and executing their unique vision effectively, which is why, thirty years later, Barbara still greets every customer as they come through the door into the most popular pizzeria in town.

Use your advantages

As an entrepreneur, you may be able to take advantage of opportunities that other businesses don't have. Even at a time when some are attacking the advantages being afforded to businesses that woman-owned, minority-owned, veteran-owned, disability-owned, LGBTQ-owned, or a combination of any of these, there is an innate value to aligning yourself and your business with these inclusive categories. There will come a time when we return to more diverse and equitable society. Corporate classification still opens up opportunities for access to government and corporate contracts, grants, loans, and funding. Other benefits include increased market visibility, access to support networks and mentorship programs, and opportunities to connect with a diverse base of clients and suppliers. Certification provides a verified status that can make a business stand out to potential clients and partners, demonstrating a commitment to diversity and opening up new markets. It also increases access to exclusive networks, industry events, and support systems. This helps in building relationships with other diverse business owners and corporate partners. There are many programs that offer mentorship, training, and executive education to help small businesses grow, improve their knowledge, and navigate challenges. In addition, some consumers actively seek to support businesses that align with their values, which can lead to increased brand loyalty and sales.

Please feel free to save this post and use it as a "cheat sheet" as you plan your next steps to business ownership. I am always happy to help entrepreneurs and start-ups improve their creditworthiness and opportunities to achieve the credit they deserve. If there is anything I can do to help guide your path to entrepreneurial excellence, please don't hesitate to give me a call at 800-918-7505 or schedule an online appointment here: https://www.starpointcreditsolutions.com/book-online