When to Open Your Business and the Preparations Needed for Success
When do you open your business? The time of year seldom matters. What does matter is that you have completed all necessary preparations and you are ready for an influx of customers. Remember, you only get one chance to make a first impression.
There really aren't many hard and fast rules for when to open your business. It'll largely depend on your individual circumstances.
The simple answer to the question "when?" is after you've completed all of the steps necessary to set up your business. The important point to remember is that you shouldn't start the business before you're really ready. In some cases, the "when" will be decided for you.
Suppose you find what you believe is the ideal location for your new business. In that case, you may not have much choice in negotiating the lease. You may have to start the business whenever the lease begins.
Following are a couple of suggestions for timing the start of your business:
- If your business is seasonal, start it at the beginning of your strongest season.
If you intend to start a landscaping business in a cold weather climate, start it at the end of winter or the beginning of spring.
- If you want to open a retail business, consider starting it the day after Thanksgiving to get holiday shopping season traffic. Many businesses make the bulk of their money between Thanksgiving and Christmas.
As mentioned above, timing is affected by numerous factors. Among the issues you'll need to consider are
- how to equip your business through buying vs. leasing,
- how to market your product or service,
- whether you'll need licenses and/or permits,
- how to line up contractors and suppliers,
- what your staffing needs are, and
- whether you should network or affilate with a trade association.
Should You Buy or Lease Equipment?
As a small business owner, you'll probably need some type of equipment, whether it's office furniture, a computer system, or perhaps even some heavy manufacturing equipment.
For any equipment, the process is the same:
Leasing your equipment. If you decide to lease your equipment, you'll have to enter into a lease agreement. Since a lease agreement is a legal contract, you should consult with your attorney before signing the agreement. Equipment lease agreements vary depending on the situation, so compiling a list of every issue that could be addressed by such a lease isn't possible. However, you can become familiar with the provisions found in most equipment leases.
To learn more about the most important provisions in equipment leases, check out the equipment lease checklist in the Business Tools area.
How Will You Market Your Business?
When determing the costs involved in starting a new business, a budget for marketing an advertising should have been included. Those businesses with a large budget might want to consider hiring a marketing consultant. (For more on marketing consultants and how to find them, see choosing a professional.)
Shoe-string budgets. Most new small businesses, however, operate on a small budget with little room for errors. If you have limited funds, you must spend your dollars wisely and be sure that what you spend reaches the customers you want to reach.
Here are a few suggestions for marketing and advertising on a shoe-string budget. (Pick the ones that look the best to you because you probably can't afford to do all of them and some of them won't apply to your business.)
- Advertise in the local Yellow Pages.
- Mail or hand deliver flyers announcing your business.
- Ask for referrals.
- Advertise through coupon mailing services (create coupons for your products or services).
- Rent customer lists, or develop customer lists from friends, family, and business associates, and send out direct mailings (or emailings).
- Put a business sign on your car door.
- Become known in the community by doing volunteer work.
- Get your name out in the public as an expert in your field by writing articles or giving speeches to local business groups.
- Allow customers to sample your product or service by giving it away for free for a short time.
- Purchase professionally-designed business cards.
- Put low-cost ads in free community flyers.
For a more detailed discussion on how to market and advertise your business, see the marketing your product in the Toolkit Small Business Guide.
Make Sure to Get Required Licenses and Permits
Most state and local governments require businesses operating in their area to obtain licenses or permits. In some instances, the federal government may also require you to obtain a license or permit.
Licenses. There are essentially two types of licenses--general and special. A general business license, similar to a use tax, is assessed annually for the privilege of operating a business in the jurisdiction.
A special license is one that is issued to a business that will provide products or services that require regulation. Special licenses are issued to professionals, such as doctors, lawyers, barbers, and others who have met a certain level of training or education.
Similarly, certain types of businesses must obtain permits certifying that they comply with the special rules applicable to the type of business. Any business that serves food or alcohol is likely to need at least one special license.
Permits. State and local governments regulate the safety, structure, and appearance of the community through the use of local laws, called ordinances. Zoning ordinances, which regulate how property can be used, are a common type of ordinance. Once the jurisdiction determines that you have complied with such ordinances, it will issue a permit that will enable you to operate your business.
If, for some reason, your business is unable or unwilling to comply with an ordinance, you can petition the jurisdiction for a special permit, called a variance, that would allow you to, in effect, violate the ordinance. If you're interested in a variance, talk to your lawyer. Variances are not routinely granted and they can be expensive (in terms of legal fees) to obtain, so make sure you really need the variance before you request it.
You can find out which licenses and permits are required for your business by calling the state and local government offices in the area in which you are going to operate. Ask them to send you information and any forms that may be required. Increasingly, this information is also available online.
Home businesses. If you decide to start a home-based businesses, one of your first steps should be to find out what your local zoning ordinances allow. Some jurisdictions have zoning ordinances that prohibit home-operated businesses altogether. Most, though, are less restrictive and will prohibit only those businesses that may pose a local health hazard or will disrupt the neighborhood. Call your city hall and ask them for zoning information in your area.
Line Up Necessary Contractors and Suppliers
When you start your own business, you may be confronted with the task of finding contractors or suppliers.
When searching for good contractors or suppliers, consider taking some or all of the following steps:
- Talk to local chambers of commerce.
- Talk to trade associations.
- Look in the Yellow Pages.
- Look in the business-to-business telephone pages.
- Search the internet.
- Contact the Better Business Bureau for contractors and suppliers.
- Contact the Small Business Administration.
- Talk to friends and business associates.
- Talk to other small business owners.
Recruit and Hire Employees
If you're one of those new small businesses that needs to hire an employee or employees, you have a daunting task ahead of you. The operation of a small business is often such an intimate process that finding just the right employee seems to be crucially important in a way that it often isn't for larger companies. Mistakes in hiring are greatly magnified in a small business.
Not only is hiring an employee an important process, it also can be extraordinarily time consuming. First, you have to put together a profile of the characteristics that the employee should possess, then create an advertisement designed to draw just the right person. Next, you have to weed through the resumes. Finally comes the interviewing, and then the really hard part - making the final decision. And we haven't even mentioned the time required to train your new employees.
But, fortunately, there are some steps you can take to help you get just the right person and save yourself some time in the process. To learn more about how to do this, see our discussion of recruiting and hiring.
To Build Your Reputation Join a Trade Association
Joining a trade or business association, like opening a separate bank account or getting good business cards, is one of those steps all new business owners should consider taking right from the start. A business association can be a valuable resource for your business.
Through a trade association, you can make contact with other business owners, keep abreast of current technologies and trends, and possibly obtain other group benefits, such as health insurance. You may also be able to locate contractors or suppliers and may even be able to buy customer lists.
If you don't know of any trade associations, ask around. Ask your friends and associates if they know of any trade or business associations. Or contact business owners who are in the same industry as you and ask if they know of any trade associations. You can also call your local chamber of commerce for help.
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