Chapter 10: Launch!
Once all the pieces are in place for your product or service, your marketing plan, your startup paperwork, and the beginnings of your support team, start putting the pieces together for your launch. Order business cards and stationery (if they are customary for your business), any forms you might need.
Take note of any elements crucial to your operation that are missing.
Do several press releases, direct mailings, joint marketing agreements with other merchants, whatever it takes to get the word out. If you have collected a set of names in the test marketing stage, contact those individuals and let them know what you are doing.
Then, at the appropriate time, hang out your shingle if you have not already done so, and let the world welcome your business!
Chapter 9: Evaluate
Consider the effectiveness of your test marketing. Take note of what you have learned from the extent of the support team you have gathered thus far. What appears to be working, and what doesn’t?
This is the “point of no return” so to speak, where you take in all of your knowledge to date. Has anything come to light which causes you to reconsider this particular type of business?
We don’t expect that anything has gone seriously wrong but if it has, now may be the perfect time to change course. Perhaps there is far more government regulation than you anticipated, or the business would require more travel than you originally thought.
If any new information has come to light that would have affected your decision if you knew it in the beginning of this process, consider carefully whether you should move forward or not. If you decide in the negative, all is not lost; the market research you have done can probably be salvaged.
Maybe you want to serve the same market but with a different type of product in that market. Or a similar market; possibly a subset of the original target market.
Even without any major problems, now is the time to make minor course corrections and adjustments as necessary.
Chapter 8: Assemble Your Support Team
Your support team is going to be vital to your success. There are many businesses today with their owner as the sole employee, and the only way to be successful is to build a support team.
In truth, you could be building your support team from day one, and you should start in earnest now.
I’m going to suggest that your support team will exist on multiple levels:
Employees – now this is not going to apply to everyone but if you do have employees, they will become part of your support team, especially those at the highest level.
Independent contractors and suppliers – you may depend on local services to carry out needed or vital functions for your business, or they might live across the country or on the other side of the world. Either way, you must have some confidence that they will do what they say they will, and do so on time. This includes businesses which supply raw material, components, or wholesale complete products that you resell.
Professional service providers and advisors – these are paid professionals, such as accountants and attorneys, that you depend upon not only to provide services, but to advise you in terms of “what if” scenarios, to give you options when problems arise, and to be proactive about letting you know about pitfalls further down the road. It may also include technical consultants, marketing advisors, or others depending on your specific business.
Peer groups – if you can join a networking group, offline or online, you will have a resource to turn to when necessary. If you don’t know of one, start one! Online, there are thousands of groups devoted to every topic imaginable, and if you can’t find one, it’s easy to start one on Yahoo groups or Google groups.
Mentors – finding someone who has gone before you can be a fantastic resource. They are often available to ask questions and to help you solve problems. Often you must pay several hundred dollars per month for the privilege, so you may not want to engage a mentor right away but you should consider doing so in the future.
Collectively, all of the above: employees, independent contractors and suppliers, professional service providers and advisors, peer groups, and mentors, are your support team.
John Donne said, no man is an island, and it just as true today as it was in the 17th century. You need people around you who can be strong where you are weak, who have specialties you don’t possess, and who have seen what you have not seen.
Chapter 7: Marketing Plan
The next step is creating your marketing plan and doing test marketing. Now we’re getting to the reason you are in business in the first place. It’s not to pay taxes or to comply with government regulations, but your purpose is to provide something useful in the marketplace, something that consumers value and are willing to spend money to acquire.
A marketing plan is simply the methods and media you plan to use to reach your prospects and future customers. You will probably have more than one method, and the exact mix and frequency of contact is going to be different for each business. To be effective in this, you must do two things:
First, you must know your market, you must know what drives them, what causes them to take action… and you should always be increasing your knowledge by doing research. Are your customers predominantly male, female, or an equal mix? Are they homeowners? What is their income level?
Second, you should test to determine which marketing methods and media are valued most by your prospects and customers.
Here are some of the media that are available to you:
• Email marketing
• Affiliate marketing (paying others a percentage of every sale they bring to you)
• Direct mail (letters, brochures, postcards, samples, trial offers)
• Informational local seminars
• Cold calling (in person or telephone)
Methods or techniques would include:
• Money back guarantee (almost a must in many markets)
• Trial offers (a limited time or quantity for a small amount of money or free)
• Free support or coaching to accompany a related product or service
• Down sells
Now some explanation on the latter two. Upsells and downsells are used commonly on the internet, but they are not restricted to online sales. When the McDonald’s employee asks, “Do you want fries with that?” they are doing an upsell. You’ve already decided to buy and they are asking if you want to buy more. A down sell is where you decline the offer, and some less expensive option is offered. This technique is often used in telemarketing, and can be used in many direct selling environments.
Here is where the “rubber meets the road” to use a worn out cliche that is nonetheless very appropriate to the topic at hand. Once you have a pretty good handle on your demographic and the means by which to reach them, now is the time to see if you can connect with representative members of your market. You need to know whether people are willing to pay for what you are offering.
If you’re offline, you can try pitching your offer to people who are in your demographic. You may have to get creative to do this. Here are a few ideas:
Find some public place where your target market frequents, and get permission from the business owner to leave a fishbowl or box where people can leave their business cards or fill out an informational card (if your target is not business people). Offer some free service that encompasses part of what you are offering, and also promise that one person will receive a gift certificate to the restaurant, hardware store, or whatever is appropriate.
This step will increase the chances of the business establishment’s owner saying “yes” to your plan. Collect the names for two to four weeks, draw a winner (have someone at the store do the drawing, do it with as much fanfare as possible), and then start calling the names with your free offer and pitch.
See if you can get interviewed on a local radio station, and see if they’ll allow you to make a special, limited time offer to listeners.
Local newspapers will often print news about new businesses that people have started. Follow the radio interview advice above.
Do a free one or two hour informational seminar and see if anyone shows up. This can be a great option; you can audio or video tape the event for future marketing promotions, and you can make a short offer at the end.
Online, you have other options, and many of them will not cost you a penny.
If your target market frequents forums, become an expert in that forum by contributing helpful posts, especially if you can promote your products and services in your forum signature.
Marketing on eBay is a tried-and-true method of doing test marketing, and it still works in many markets.
If you’re willing to spend a little money, Google Adwords is a great way to test. You can include as many ads as you like, and make them compete with one another. You only pay for ads that are clicked on. You can drive the traffic to a survey page, offering something for free if your prospects fill out the survey and give you their email address.
If you have a list of email addresses, you can become an affiliate for products similar to the one you are selling, and take notice of which offers and products your prospects buy most. You can ask that list to fill out a survey. Or you can simply offer them a special deal on *your* offering, provided they tell you what they think people will pay for it.
If you have a relationship with someone who has a list of names of people in your market, see if they will interview you or do a review of your product, send the interview or review to their list, and give them an affiliate commission on any sales.
Chapter 6: Paperwork
Not only must you have sufficient funds in place to begin, there is going to be a great deal of paper work in the beginning.
A. Initial startup paperwork: City/County/State/Federal
I’m assuming that the first step in this process has already been completed; namely the creation of your business entity. If not, that should be your first step in the startup paperwork process. There are at least two reasons for this, first, in the process of creating your entity, you or your representative will have selected a name that is not a duplication of another business name within your state, and second, you will report this business name and entity type to the IRS when signing up with them.
The creation and naming of your business entity is filed with your Secretary of State or equivalent.
Also, at the state level:
• You will probably need to get a license from your state department of licensing.
• If you have a state income tax, you will need to create an account through which to file and pay your business income taxes
• If your state has sales tax, you will need to apply for a resale certificate if you’ll be manufacturing goods or purchasing for resale, and create an account with your department of revenue or equivalent, to whom you will pay any collected sales tax.
By the way, I recommend setting up a liability account in your financial system for “sales tax payable”. Whenever you receive sales tax, make an entry for the sales tax that you owe to the state, and don’t spend it! Keep track of the total payable so that you don’t spend money that doesn’t belong to you, and not have it when it’s time to pay it.
If you have employees, you will probably have to file documents for:
• Industrial insurance
• Unemployment insurance
If you will hire minors, there are often special work permits you are expected to obtain.
In addition, depending on your type of business, there may be additional licenses or permits specific to your type of business. How does one find out about them all? It’s not always easy.
You may want to use some or all of the following methods:
• Retain the services of an experienced accountant
• Ask others in similar businesses
• Call the various agencies and ask questions
• Research online or at your local library
At the federal level, you will need to register your business and obtain an Employer Identification Number or EIN. Now there’s a few cases in which an EIN is not required, generally if you’re a sole proprietor with no employees, but I’m going to suggest you obtain one for privacy reasons. Often there are forms that require a federal tax ID, and if you don’t have an EIN, you’re stuck with using your Social Security number.
You may also need a business license from your city or county, and one or more permits to perform certain functions. No one likes to have to obtain these, but they are a cost of doing business.
If, for instance, I owned a brick and mortar store or operated heavy equipment, I would have to deal with my county to get required licenses and permits. You will want to check with your own city and county to find out what they require.
A good accountant can handle most or all of the above paperwork for you, although you will generally need to sign the applications.
B. Ongoing paperwork: City/County/State/Federal
Much of this ongoing paperwork will be related to taxes. You will have taxes at the federal level, in most cases at the state level, and possibly the county and city level. Not only must you factor in paying these taxes, the process of computing them and filling out the required returns is not always simple. Here’s a couple of tips to help you get a handle on them.
First, create a calendar on which you list all of the required returns. This can be handled in different ways. I like to use Google calendar, it’s very easy to set recurring items that repeat every week, month, year or whatever, and I can share my calendar with whomever I choose. Many people like to use the scheduling feature in Microsoft Outlook.
If you want to go low tech, you can just keep a schedule in a 3-ring binder and fill it out once a year, adding to it as necessary. For maximum effectiveness, you will actually need two entries for each return, one for the actual due date and the other for the date you will be doing the work, because you don’t want to fill them out at the last minute.
For example, your Federal income tax return will be completed once per year, though your estimated tax payments will be due once per quarter. If you have employees, you will have a 941 tax return to complete once per quarter. This is how you document your withheld Federal payroll taxes and the employer’s side of Social Security and Medicare tax. Your federal unemployment tax return, if required, will come due once per year.
Be aware that Federal taxes generally must be deposited on a more frequent basis, either estimated in the case of income taxes, or actual in the case of employment taxes.
At the state level, you will probably also have an annual income tax return, and if you collect sales taxes, you will be reporting and paying those once per month or quarter. If you have employees, all states of which I am aware will have industrial insurance returns to file and pay, along with state unemployment tax.
I’ve just hit the highlights here. Unfortunately, there may be other ongoing requirements as well.
No one likes paying taxes, but they are a cost of doing business. If you ignore them, you will pay dearly in the long run. So do whatever you can to reduce your taxes legally, and make it your aim to get them paid on time. If you follow my advice in this section, I believe you will find keeping up with them much easier.
The second thing you can do to keep up with ongoing paperwork is create checklists and informational sheets if you or someone on your team is completing these, versus an outside professional. An outside professional will generally know what do without your help and also remember that they do many of these returns on a fairly frequent basis. The reason for this is simply to save time and aggravation.
Some of these returns will be filled out only once per year or every three months, and often there will be one or two steps that are difficult to remember. By creating your own personalized checklists to follow each time, and including reminders about problem areas as you discover them, you will be miles ahead of the person that has to re-create the wheel each time.
The third recommendation I have for keeping up with paperwork, is put all of your startup paperwork in a 3-ring binder for easy access. You will receive a notice from the IRS with your Employer Identification Number, and each state and local agency will have something similar for the various accounts and records you are responsible to report on. Keeping it all accessible in one location will make your life much easier later. I personally like to use sheet protectors for this purpose, plastic sleeves that you slide pages into.
While taxes and record keeping is required, it’s not going to keep you in business.