National Small Business Week is a time which celebrates the innovation and tenacity of start-ups and entrepreneurs. During the past few years, start-ups and entrepreneurs have been more important than ever, as they are helping power America’s economic comeback. As important as start-ups are to the American economy, launching a new business is a daunting and often overwhelming task.
To set a new business up for success, it’s imperative to thoroughly prepare. However, with all the steps needed to begin and effectively run a business, it’s difficult to know where to start or what actions need to be prioritized. This is where KerberRose Trusted Advisors can help. With more than 40 years of experience and a variety of advisory, accounting and financial services, we help our business clients tackle whatever challenges they encounter. We created this guide to help entrepreneurs build a strong foundation for their new business’s long-term success. Below are some of the key elements and steps a start-up needs to consider.
Business Planning and Strategy
The first step in opening a new business is creating a business plan and strategy. This plan serves as a framework to ensure you remain focused and goal-oriented, while getting your business off the ground. On a surface level, your plan should contain the following elements:
- Story of your business and its specific objectives and goals
- Business’s vision, mission and values
- Description of services and products offered
- Market analysis
- Company’s organizational structure
- General marketing strategy
- Funding requirements
- Financial projections
When starting a new business, it’s important to determine what business type is most advantageous for your business. Each business type has different benefits, risks and tax implications, so it’s important to know which one makes the most sense for your business. New businesses can choose from the following business types:
- Sole Proprietorship: A business owned and run by one person.
- Partnership: When two or more people own a business.
- Corporation: The owners are separate legal entities from the company.
If looking to start a corporation, know a variety of corporation forms exist, all with varying degrees of liability and tax implications, including: LLC, C-Corp, and S-Corp. Corporation formation is very time consuming and complex. It is recommended for anyone looking to start such an entity to first consult with a corporate lawyer or a tax consultant.
Before applying for loans or other forms of funding to start a business, it’s important to establish an estimate for start-up costs. There is no one-size-fits-all approach for estimating start-up costs, because every business is different and starts out with a unique set of circumstances. However, it’s a good idea to base estimates on current and future inventory, assets and expenses.
After developing an understanding of costs, options for obtaining funding, or capital, can be explored. There are a variety of places to turn to raise funds for businesses, including:
- Personal savings
- Borrowing from the bank
- Selling stock to individual venture investors (aka private placement)
- Starting a formal venture capital fund
- Finding a corporate venture investor
- Taking your company public
A business or financial consultant can assist you in creating an accurate estimate of your start-up costs, and also advise on best business practices for whichever capital route you decide to take.
One of the most integral steps in setting up a new business is establishing an accounting system to track and manage finances. Therefore, choosing a knowledgeable accountant, who can stay on top of the growing list of compliance and human resource issues, while keeping finances in line, is important. Furthermore, an accountant should be viewed as a trusted advisor in financial decisions, navigating regulations and mitigating risk.
One of the most important things for a business’s success is finding the right people. The right employees can drive a business to the next tier of success. Before hiring employees, it’s important to have a good understanding of the hiring process; this can be a daunting task on top of all the other steps necessary to start a business. KerberRose Human Resources is committed to helping organizations in virtually any area related to the employee lifecycle including recruiting, development, retaining and transitioning talent. Our solutions to human resources and leadership development needs are both tailor-made and cost-effective. We provide the following services to help attract, hire and retain the best employees for new businesses:
- Job description development, classification and review
- Hiring, recruitment and retention
- Interview training
- Employee handbook development and review
- Compensation plans and structure
In addition to all the necessary steps to hire and retain employees, businesses must comply with employment laws. Two examples of such regulations include anti-discrimination laws and having all employees complete I-9 forms.
Payroll and Timekeeping
After attracting and hiring the right people, they need to be paid. While this may seem like a straight forward process, it can get increasingly complex with the more employees hired. Furthermore, when processing payroll, matters such as withholding taxes, worker’s compensation and more need to be taken into consideration. As such, hiring an external payroll processor may be the best option for a lot of start-up businesses.
The marketing plan for a new business exists as a portion of the overall business plan and must support the overall strategy. A marketing plan is the part of the strategy which defines business offerings, customers and focuses the brand’s voice. While marketing is not the only way to attract customers and generate revenue, when done well, marketing can be very effective in growing your new business. Thus, the marketing strategy is an integral part of any business.
The above list of elements and steps to consider while starting a business is not comprehensive; however, it presents key topics which need to be considered. Starting a business is a constantly evolving process with many working pieces. Even if entrepreneurs take the time to educate themselves on all aspects of running a business, keeping track of everything can be overwhelming. This is where KerberRose Trusted Advisors can help. We have a robust range of advisory services from accounting and payroll services, to marketing services and everything in between. With entrepreneurs’ diligence and drive, and our tireless expertise, we can lay a strong foundation for your small business’s success.