Do you have a new idea for a business? If so, congratulations! According to the Small Business Administration, more than 600,000 new businesses are started each year in the United States. Small businesses also account for almost half of the workforce.
As you are getting your business established, a good first step would be to meet with an accountant. The best time to do this is after tax season (May through December). Accountants will typically have a lot more time to meet with you post tax season, and most first time consultations are free. When I first considered starting my own business, my CPA (Certified Public Accountant) was one of my first calls. Everyone’s financial situation is different, and this is not a one-size-fits-all arrangement. Depending upon your current tax filing status (whether you are single, married,have dependents, etc) having a business incorporation strategy will be key to how you not only protect yourself as a business owner from certain liabilities, but also how you can take advantage of certain tax deductions and benefits.
Creating a new business entity (and this is separate from just establishing the name of your business) is not expensive, but in my opinion necessary. Let the experts walk you through this. Some ways that you could structure your business include:
Unincorporated business with one owner or jointly owned by a married couple
Unincorporated business with two or more owners
Registered business composed of active, general partners and passive, limited partners
Limited liability partnership
Partnership structure that shields all partners from personal liability
Limited liability limited partnership
Type of limited partnership with some liability protection for general partners
Limited liability company (LLC)
Registered business with limited liability for all members
Professional limited liability company
LLC structure for professionals, such as doctors and accountants
Incorporated business composed of shareholders, directors, and officers
Incorporated business that is taxed as a pass-through entity
Corporate structure for professionals, such as doctors and accountants
For-profit corporation that is certified for meeting social and environmental standards
Corporation formed primarily to benefit the public interest rather than earn a profit
I’m excited for you to start on the journey to establishing your business! Tap into the experts in your area to ask what is the best fit for you. If you are unsure of who to contact first, reach out to your local Chamber of Commerce, SBDC Office, or business network to get referrals.
Competition amongst businesses, and people, can be energizing and productive. Competition allows us to keep our eye on the ball and consider on a regular basis what others are doing in our space to be successful. Competition can be a healthy part of your business growth.
What happens when other like-kind businesses enter the marketplace, and even <gasp> market to our own customers?
I think it is a natural inclination to react to competition by verifying and validating your value to your customer base. I would even bet that if you have experienced a competing business in your market that you went on the defensive. You drove by their shop, and even sent a “mystery shopper” inside to spy. You probably tried to find out what their “special offers” are, or what they are doing differently to stand out. You would then immediately pass of these new ideas as “fads” and “temporary.”
Here is where competition can help us. Competition should always be considered, even if there isn’t an immediate threat in your market. You should always be working to improve and win over your customer base on a constant and continual basis. What else keeps you on your toes?
As we delve deeper into our competition, I want to ask you the following:
Who are your competitors? They might not be who you think they are. For example, who would have thought that your phone would be the competitor to your TV?
What makes your competitor your competitor? Identifying how and why your customers use your goods or services is key.
Are you a one-time purchase, or something that is needed on a frequent basis?
How easy is it to buy a product or service from you?
What does the sales experience look like at your business?
What does your follow up time after a sale is made look like?
I hope you are using these tools on a regular basis to evaluate your business experience, and not only when the threat of competition is looming.
Let’s switch gears and talk about synergy. Like-kind businesses can also be synergistic. If you take a look around the community you live in, you will probably notice many synergistic business that are located right next door to each other. Take the home improvement industry. In most communities, there are multiple home improvement stores located on opposite corners, or within blocks of each other. Why does this happen you ask? Because of synergy. While two businesses may appear to carry the same products, more than likely if a customer can’t find what they are looking for at one home improvement store, the other one will have it. These two businesses are relying on the customer base in that community to shop at both, for different reasons. One store might offer a better supply of lumber, while the other might feature more garden items. The same can be said for the banking industry. How many high traffic intersections are home to more than one bank or credit union? What appeals to one customer base can create an appeal to a different customer base for different reasons.
What are the lessons learned here?
Continually evaluate your business to determine its strengths and weakness so you won’t even have to defend it to a new competitor.
Determine what your business does best, and create synergy with those around you. It is a-ok to be a specialist, and not be a “one stop shop.” Decide if those synergistic businesses can create a referral network for you, instead of trying to compete.
In an environment where we want to just get through the day sometimes, how are you expanding your thoughts? It is easy to get into a rut of doing the same thing day in and day out without question. Our brains love repetition, and the “auto pilot” mode can put us into a ho hum form of existence.
If you are reading this blog post, than you are searching for more, even if you don’t know what that “more” is yet. More could mean more excitement, more engagement, or even more time / money / challenges to conquer. Here’s where the value of learning comes into play. Learning something new (even if it is a new method of doing an old or existing activity) challenges your brain to get out of its own way and create new pathways.
Learning creates stimulation, conversation, and understanding of yourself and your environment. Try something out for me this week:
Set up a meeting (even virtually) with someone you’d like to get to know better
It is these small action steps that create learning opportunities. I want you to continually be expanding your thought pathways. It might be uncomfortable at first, but the doors you are opening within yourself will spill light and energy into the rest of your life.