How To Plan Business
It’s the American dream—being your own boss—but even the most entrepreneurial spirit had better take a step back and consider how to plan a business before hanging an “Open” sign in the window. The obvious question of what you’ll be producing (product or service), where you’ll set up shop, and if you can afford it are likely all answered before you’ve gotten this far. Now it’s time to investigate a deeper level of questions. Here are a few considerations for planning a business.
- Who’s your customer? If you haven’t answered this question already, you’re in the wrong line of work. Identify your customer demographic: age group, gender, ethnicity, buying pattern, income, location—who he is and why he would buy your product or service. Once you’ve got a line on the customer who's going to be supplying your paychecks, you can move on to addressing other issues, such as why he should buy from you.
- What’s your brand? A business name is only the beginning. Once you’ve identified your company’s name, it’s time to consider branding. Logo identity, tag lines or slogans—all these elements help build a customer perception of you and your business and must be developed carefully when planning your business. Consider the cost of hiring a good graphic design or brand identity firm to help with this process.
- Make it legal. Most business names must be registered with your city or county. A sole proprietor who sells handmade jewelry under the name of “Black Pearl Jewels” will need to register this name as a “DBA,” or “doing-business-as” name. Registering business names is not overly expensive, and most times, can be done online. Corporate names are registered when you set up your corporation. A final note in planning your business: many states require an occupational license to work out of your home. This is an annual fee and it is usually nominal.
- Choose your structure. Are you a sole proprietor who works independently? Or are you a corporation with shareholders and employees? Consider your structure carefully as you begin to plan your business. Visit the Small Business Administration or the IRS websites to lend a helping hand in making this decision.
- How will you reach your customer? Will you advertise? How? Where? Do you have a budget? All of these are Marketing 101 questions. You can have the best widget in the world—one that ties your customer’s shoes while whipping up a beer-crust pizza—but if he isn’t aware of your product, it’s useless. Consider all the avenues of business promotion and marketing. Build a website that fits your branding message. Develop business identity materials (business card, letterhead, etc.) to accompany your mailouts and to leave behind at networking events. Hire a design firm to develop a top-notch brochure and other collateral materials. Plan your press: notify trade associations and magazines of your business and its solutions. All of this takes time, but is well worth it.
The rest of the business planning is the fun stuff. Building your business plan and your marketing plan, setting up shop, determining your wardrobe (pajamas and slippers?), and doing The Happy Dance of Prosperity in your living room when you win each new project. Take your time and research all possible scenarios when planning your new business. It will pay off later.