Setting up a business in today's interconnected world
Setting up a business in today's interconnected world
Brainstorming and research
Have a great new idea? Before giving yourself too much credit for being a genius, take a second to think about why (out of the six billion people in the world) you are the first person to think about your idea. Are you really the first? Most of the time, you won't have been the first person to think of a great idea that wasn't already tried but don't let this stop you. Think about the reasons why your idea has not been implemented, and what barriers to entry may exist. Probably one of the most common barriers to entry of business is lack of financing. Sometimes without capital, it is impossible to go into certain businesses. So before you do anything, ask yourself if the capital required to implementing your business idea is feasible to obtain.
Today's interconnected world allows entrepreneurs to utilize the internet in order to research a prospective business. Among other things, founders can find out how much it costs to start a business, where to possibly get the funding, how to make revenue, what competitor's are up to, and stay up-to-date on the current market. Googling can be a great start to the brainstorming process. Use Google to find out if there is any existing business that is already implementing your idea. If someone is already implementing your idea, ask yourself if you can somehow do it better. If you come to the conclusion that you can't do something better then someone else, it doesn't necessarily mean you can't compete (There isn't just one bottled water company out there, is there?).
Be alarmed if you discover that competition is either extremely low or extremely high, but it's obviously better to have extremely low competition. Beyond looking at a competitive analysis, make sure you record a real business plan. While it might seem a bit paranoiac, keep your records locked away and don't share them with anyone! Those that are close to you will be the first to tell you that you can't achieve your goals, and your friends that you trust so much will be the first to steal your goldmine from underneath you. Make sure to google the words "business plan", and figure out how to make one. Do it. If you are serious about your business idea, you will write a business plan.
Choosing a sexy name
Google, Amazon, eBay, Yahoo, Microsoft, Twitter, Facebook, Myspace, Digg. What do these names have in common? They're catchy! Do they mean anything? Not necessarily. What's important to a business name is that it's catchy and people can remember it. Another key element to choosing a name is that it's unique. Did you know that there's a company called the paper company? Although a generic name can easily be remembered, it may not be easy to get the name restricted. Restricted is represented by that fancy R in a circle next to business names. Choosing a good name, can be a very long process because many good names out there are already used. Google every name that you can think of and be sure it's not already used. Also use a good domain name search and see if you can reserve a domain name, cheap. Hostgator is an easy to use and affordable web host, but there are many out there.
Incorporating
Incorporating is another lengthy task of establishing your business. Are you incorporating it alone, do you have partners; do you want limited liability, where do you want to incorporate? Go to LegalZoom, or another popular legal services website to learn more about the different type of corporations there are to suit your needs. If you aren't establishing your business alone, you'll want to do a bit more research about ownership. Know what a controlling stake' is before you divide your new business into shares. This is the point of the new business process where friendships and business do not mix very well, so be sure to learn about ownership before getting into business with your friends. The location of incorporation is essential, and may have certain implications such as taxes. If you are incorporating within the United States; Florida, Nevada and Delaware are common states to incorporate. Your business may still be required to pay taxes within the state that it does business, and you may also be required to pay certain taxes within the state you are incorporated. For example, Delaware charges a minimum annual tax of about $200-$300 USD for a limited liability corporation. Incorporation is a tricky task and costs money, and some may argue that you should test the waters of your business first, but you should always weigh the risks and know the law.
Implementation
Remember that business plan you put together? Now's the time to actually re-read it and try it out. This is the part where you lay the foundation to your successful future. Business implementation is the process that doesn't end until your business does. While you are trying to effectively bring in revenue, make sure to update your business plan because in the future you might want to expand and pitch your business to a venture capitalist firm. Discovering profit generators for your business is an on-going process, so your initial product or service might not be your prime bread and butter.
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