So far, you have played the name game and thought about the big idea. You should have also done a little research to create a mission statement for your business and made some decisions about its legal structure. This week we are going to continue working on taking your business idea from paper to reality.
5. What do you have? What is the product or service that you plan to offer to the world? What is this great thing that will help you to become successful? Not only must you consider what is but also why would people want to get it from you rather than someone who already offers the same product/service? How much will you charge? On what terms will you provide it and who will be in charge of satisfying your customers? These are serious questions to consider because often small businesses start out by thinking about what they have and what they want to give to their customer but they sometimes leave the customer’s feelings out of the equation. A good product/service may get you one customer but great customer service will keep them coming back. Take a hard look at your business idea and start to consider how it will translate in reality for your customers. Every decision that you make about your business should have “how will this effect my customers” at the forefront of your thought process, not just how much money can I make.
6. Don’t forget about Uncle Sam! When you start to prepare for the reality of business ownership, you have to prepare to pay business taxes. It is imperative that you seek professional guidance to make sure you are fulfilling your financial obligations to the government. Contact your State Department of Revenue for guidance on calculating, collecting and paying sales tax as well as the Internal Revenue Service about payroll taxes and other business taxes.
One very serious tip: Don’t try to make it look like your business is not making money to avoid paying taxes. This will come back and bite you in the rear if you ever decide to apply for any time of financing for your business. If it looks like your business is consistently losing money or not making a profit, why would someone want to invest in your sinking ship. It is best to do the right thing, report your revenues honestly and pay the taxes. You will reap the rewards in the long run.
These are two very important steps toward becoming a successful business owner. You have to understand your product/service and what your customers expect from you and you MUST have a good system in place to manage your business taxes.
As always, feel free to share your experiences with making your business idea a reality and come back next week to keep the process going. You will be an established business before you know it.