5 Things to Research and Consider Before Starting Your Own Business

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An average of 514,000 new businesses opened in the United States in every month of 2012. Some will thrive, but studies show half of them won’t last a year. A staggering 95 percent of them are destined to fail within five years. With the odds stacked against your venture, it’s vital that you do your research and consider the following five areas before you open for business. Here is a guide that can help you in making sure that you don’t forget anything during your planning period.

Your Business Name

You may have come up with a snappy name for your business, but it’s not time to order your office stationery just yet. Unless the trademark is available, you’ll need to go back to the drawing board. The United States Patent and Trademark Office website offers an easy online search which shows whether your dream business name is up for grabs.

In the digital age, it’s important to cross-reference your preferred business name with available domain names. With more than 98 million dot-com domain names registered, it’s tough to find one that’s suitable. However, if you own just one Internet address, it should be a dot-com. It’s the domain most people are familiar with, so it’ll take some training for them to type anything else into their browser.

Some smartphones also have dot-com buttons, so they’re most commonly used by mobile browsers.

Compare available domains and trademarks to come up with your ideal business brand.

The Legalities

Running a business is about much than taking care of the dollars and cents. It’s crucial to understand the, government laws, regulations, taxes, and licenses required in the set-up and running of your new endeavor. Online research goes a long way, but it’s a good idea to speak to an accountant and a business lawyer to make sure you’re playing by the rules. Failing to charge the right taxes or get a necessary license could be a costly mistake.

Computer Software

The right computer software and smart phone apps can make day-to-day business operations run smoother. Research which programs others in your field recommend, and read plenty of user reviews to decide whether they’re right for you. These impartial evaluations are much more reliable than the copy created by firms intending to sell their products.

It also typically takes time to use these programs to their full potential. Tinkering with a program before your business is operational helps you avoid a steep learning curve on the job. Consider taking a training course if your computer skills are lacking or if the programs you’re using are particularly complex.

Staff Recruiting

You may have expert knowledge about landscaping, but that doesn’t mean you can design an effective website, keep the books straight, and create a business plan. Hiring part-time staff or freelance contractors is a good alternative to finding full-time staff in those early days when money is tight.

Consider what your first priorities are and what areas can wait until your business is more established. Headhunting potential candidates on a site like LinkedIn is more effective and economical than running advertisements on job websites or local newspapers. Naeem Zafar, an entrepreneur and lecturer on the subject at Berkeley’s University of California, suggests “Typically four out of 10 people will say yes if you approach them honestly, correctly, and with an interesting topic.”

Have a clear idea of the skills you need and keep them in mind when you’re interviewing candidates. This will make sure you make objective decisions rather than being swayed by likable personalities.

Expenses

Starting a business, be it a large or small business, takes a significant amount of time and money. While every business is different, a 2009 study from the Ewing Marion Kauffman Foundation put the average amount of start-up capital required at $30,000. Small firms including home-based businesses and online ventures often cost much less, but large enterprises are much more expensive.

Grants and donations from angel investors can offset these costs, but it’s important to consider what you’ll need to pay and what you can reasonably afford. Also, factoring accounts receivables is a way to get instant funding from work that was already completed, but this source of funding comes with a fee. Remember to consider not just business expenses, but your own cost of living and personal financial obligations.

When you start your own company, you can count on working 60- to 80-hour weeks for at least the next two years. Vacation time may also be put on the back-burner for the foreseeable future. Can you afford that time? Do you even want to? Have lengthy talks with your loved ones to decide whether it’s the right time to sacrifice your personal life to fulfil your business dreams.

The statistics can make opening a business seem daunting, but with the right preparation you can beat the odds.

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