There are millions of people worldwide who dream of being successful entrepreneurs. For this reason, we created a 4-part series, which provides helpful tips for small business owners.
For individuals who have taken the “small business plunge”, It may seem overwhelming due to the perceived amount of ground you will have to cover to ramp up your business. Rest assured, these practical tips for small business owners will get you off to a good start.
Know your Niche
One of the most important tips for business owners is to ensure that you choose your niche wisely. A niche is a specific cohort or segment of the market that thoroughly enjoys using or have a need for a specific product or service. For instance, instead of targeting individuals in the service industry, narrow it down to (i) cleaning companies in the hotel industry; (ii) landscaping companies in a specific location; (iii) transcription services for attorneys in a specific location.
As a small business owner, you must narrow your focus. Avoid generalizing. In fact, when your target market sees your marketing, they should know they are the ones you are catering to and that they need whatever you are offering.
Another example of narrowing your niche would be:
- Interest: Virtual Assistant (Appointment Setting)
- Target Market: Top real estate brokers or associate brokers in the Bay Area
- Research: There is a growing demand for appointment setters. Real Estate is booming. Data shows a steady increase in sales with only a few similar businesses operating in the Bay Area. Their prices are competitive and the business can improve the customer’s experience to increase its profit margin.
- Marketing: Promote online business brand as a virtual appointment setter for top real estate brokers in the Bay Area.
Register your business
We highly recommend that you form a Limited Liability Company (LLC). An LLC provides two major opportunities, (1) liability protection and (2) flexibility on taxes.
An easy way to learn more about forming a business is by simply googling or binging (whichever you prefer) “form an LLC” in the state you wish to operate in, and you are likely to find most, if not all the relevant information you need to successfully register your business.
Begin with the following:
- The name of your LLC
- Who will be your Registered Agent? A Registered Agent is an individual or business that has the responsibility of receiving all official notices from the government as well as the service of process notices on behalf of the business.
- Preparing and Finalizing your Articles of Organization. You must file this legally binding document with the Secretary of State
- Preparing the Operating Agreement and
- Completing and submitting the paperwork to obtain your Employer Identification Number, which is assigned to your business by the Internal Revenue Service.
- Any other information that the state requires from you to maintain your LLC (for example, An Annual Report, Permits, Licenses)
Legal Zoom is a popular legal service for small business owners. This informative review by Priyanka Prakash provides a good overview of Legal Zoom. Among our tips for small business owners is to thoroughly research any business or service provider before contacting them.
Do your research
Gleaning information from the Better Business Bureau, Google, and Facebook reviews is beneficial for research purposes. Make note of any questions or concerns you may have. Call the company for responses to your jottings and solicit feedback from people in Facebook groups dedicated to small businesses to find out what their experiences with the service or company were like.
If you need specific legal advice for your business, always consult a trained lawyer rather than googling the answer.
Buy reliable and durable equipment
You do not have to purchase a MacBook and expensive headphones to provide quality service as a small business owner. Create a list of equipment (if you haven’t already) and do a google search for each.
Amazon sells good equipment from the most popular brands. Companies such as Best Buy also price match if the product is sold and fulfilled by Amazon.
To transition smoothly into your entrepreneurial role, invest in a good quality laptop. The following are important to bear in mind:
- Intel Core i5 or i7 processor. For demanding applications and faster performance, a Core i9 is better but expensive
- At least 8 GB of Random Access Memory (RAM). For advanced graphic design, you may want to increase RAM
- SSD storage
- USB Type C and ethernet ports
- Headphone jack
- SD card slot
- A screen between 14 and 15 inches
- 2 in 1 capability to switch from a traditional laptop to a tablet
- Integrated graphics chip. For advanced graphic design, consider upgrading to a discrete graphics processor
- At least 8 hours of battery life
- Integrated webcam
Also purchase:
- A wired or wireless headset with a built-in microphone
- A printer
Make sure to find out about available technical support. Check for reviews as well to make an informed decision.
Create useful templates
If you have not done it yet, please register your company. A registered business is perceived to be legitimate than an unregistered business.
Source a wide range of templates
Having templates in place will reduce the amount of time you take to complete documents and maintain organization.
Google and Bing provide very good templates. A document drafted by a small business lawyer is the recommended way. However, prices vary between states. It never hurts to do 15-20 mins of online research or make telephone calls to speak with a lawyer or paralegal.
Below are examples of templates for business owners:
- A Service Agreement, which is normally used by Independent Contractors
- Employment Letter, which is typically used by businesses hiring a permanent or temporary employee
- Confidentiality Agreement, which is normally used by companies who outsource their work to keep their proprietary work and matters closely linked to the company and its projects confidential. Sometimes a company might have a permanent or temporary employee sign this type of document, as well as a Service Agreement or Employment Contract
- Privacy Policy and Terms of Use to avoid legal liability related to the company’s website and instructs users on how to use the material on your website. Please note that it is necessary to include the California Privacy Rights disclaimer.
Long breaks ranging from several weeks to months may result in project abandonment. Sharing your ideas and intentions to start a business with someone you trust is a great way to maintain accountability. If you are having difficulty finding someone to talk to, try meeting or speaking with other entrepreneurs at expos, conferences, meetups and Facebook groups to discuss your ideas and get feedback.
Our best practice tip for small business owners is to ensure that all your contracts/agreements are legally binding – signed showing acceptance of documented obligations.
Open a business bank account
A small business bank account is a wise choice as it adds a more professional look to your brand and provides the means for you to separate all expenses related to your business’ operations from your personal expenses.
Required banking information
Normally, banks require:
- An Employer Identification Number (EIN), which is similar to your Social Security Number
- A copy of your Articles of Organization
- A list of people who are authorized to use the account and sign on behalf of the business
- Personal identification as proof of address, namely, a state ID or driver’s license
Shortlist your banks of interest and request confirmation of their required information/documentation before starting the process of opening a bank account.
Know your claimable tax credits
As a small business owner, you may be able to write off specific business expenses. Common deductions include:
- Travel expenses related to business travel
- Car expenses
- Office supplies
- Meals for business meetings
- Training
- Work-related software
- Utilities
- Insurance
- Legal and accounting fees
- Renting office space
Meet with a Certified Public Accountant
It does not hurt to schedule an appointment with a CPA to discuss all your ideas and concerns related to your business to ensure that you are fully informed of the regulations and requirements on a federal and state level.
A seasoned CPA can provide a wealth of industry knowledge to a small business owner. Consulting a CPA is a great way to learn about the most appropriate business loans, obtain an analysis of your financial health and the best course of action.
Secure the best possible CPA that your budget can manage and keep in touch with them during the year (not just tax time). Being fully aware of the types of expenses you can file for on your tax return paperwork will be beneficial to you.
A professional CPA or Bookkeeper would be thrilled to see that you have an accurate paper trail of all your business transactions. Remember to scan and store your invoices, receipts and other sensitive transaction data in a safe, preferably encrypted location.
Check out Part 2, which covers areas such as work-life balance, utilizing the best online applications, organization to improve efficiency, productivity and reduce stress, marketing content and so much more.
