New business owners are like new parents. They're so thrilled and clueless it's cute. Their experience raising the business/baby becomes so defining that they can't help but talk about it (a lot).
In public, they talk positive. They don't dredge out dirty details. They don't talk about the sleepless nights, the anxiety, the occasional existential terror—instead keeping those thoughts tucked behind smiling eyes.
But if they find out you're a new parent yourself—or plan to be soon—the war stories come out. Everyone has their tales to tell.
Those new-parent, new-business-owner war stories have two things in common:
- An emotional cocktail made with several parts urgency, and
- A unifying principle that everything should be fine if you (A) have what you need and (B) do your best.
Doing your best? That's something to figure out on your own.
Getting together what you need? It's a short list, and it's right here.
You'll manage your first business fine if you start out equipped and work your way forward. This article will briefly explain the 5 things you need to start and run your own business.
If a modern country like Finland can figure out every baby's needs starting out
(and literally give parents a standard box with that stuff)
you'd better believe we've got the bare essentials for business in one article.
1. Something to Sell
This seems obvious—but we've talked to some people who seem to think they should be paid for (basically) just doing their thing.
They're not necessarily being vain, self-important, or entitled. But they don't make the connection that whatever you sell has to be valuable to someone else, to the point that THEY attribute monetary value to your work and choose to pay you for it.
Backing up a step: are you selling goods, services, or some hybrid of the two? And yes, this is one of those questions that EVERY business should be able to answer quickly and simply, no matter how big or small.
Nike sells goods.
Dentists and dry cleaners sell services.
Restaurants and car companies sell hybrids of the two.
Sounds like simple stuff, but selling goods and selling services are vastly different things (we've seen both—Code&Quill only sells goods, but some of our other/former businesses have only sold services). Sometimes "crossing the streams" and selling both goods and services is just fine, advantageous even. But especially if you're a new business, do your homework first and make sure you'll be maximizing profits (gaining) more than you're splitting resources (losing).
2. A Place to Sell It
Other times, people forget that whatever you sell has to be sold in some kind of marketplace. People don't just magically show up at your door to buy your shit.
Whether it's a physical location, one or more online storefronts, or even just word-of-mouth in a social network, you have to "exist somewhere" to do business.
If you're selling goods: can you sell them online, in person, or both? You might have to test, but figure it out: which sales channels are most profitable against your time and resources? Again, "crossing the streams" and selling in multiple places can be advantageous, but be sure you're doing it strategically.
If you're selling services, it just depends on what you're doing. If you're in our readership, you're likely to be somewhat tech- and Internet-savvy—and TONS of skills like yours can be sold and serviced remotely. Remember that, nowadays, people are far more likely to turn to the Internet for help anyway; if you're professionally available in the right places online and you can make remote clients happy, you've just carved out a living for yourself.
3. Reason for People to Buy
You know what you're selling, and you know where you can sell it. Great start!
There's only one problem: you're very, very unlikely to be the first person selling that product or service. So how do you convince people to buy from YOU rather than your competitors? Why will they like yours better?
And in the first place... how do you make your (potential) customers aware that they want your product or service? How will they know you even exist?
This is basically marketing in a couple of paragraphs. Successful businesses deliver good products and services, yes—but they also know who they're trying to serve and how to reach those people so that sales are possible. If you can answer those questions, you've got a basic marketing strategy.
The variables are infinite, but here's some short marketing advice: as a new business, it's usually a bad idea to compete on price. That's what companies bigger than you are built to do; they're playing a volume game already. Instead, try to serve particular markets particularly well and offer them a unique experience so that price isn't such an issue.
4. An Updated Toolbox
If you've got something to sell, a place to sell it, and some compelling motivations for people to buy, you've gotten through the abstract stuff.
At least, enough to get started. Obviously, your knowledge of your business and its market(s) will evolve over time.
But now, it's time to start putting rubber to road. You've got blueprints... where's the toolbox?
No, the toolbox, not the puppy b— whatever, close enough.
Any literal, physical tools you need, you'll have to figure out on your own. But there are some other "tool needs," often software, that are common to new businesses:
Tools for accepting payments. Square (as one example) works great for both small-scale point-of-sale (POS) payments and for online invoicing. Expect to lose 3-4% of each payment to processing—but it's a fair trade, since it's easy to access and there's no monthly fee.
Tools for email collection and communication. Email is the lifeblood of marketing for tons of businesses, whether product- or service-based. Even if you do it informally, you want to keep your email list in good condition (and growing as much as possible). Tools like MailChimp can be outgrown pretty fast if you have robust email management needs—but by the same token, it can be a great starting point.
Tools for accounting and record-keeping. It should be obvious that, if you run your own business, you'll need to track the business's financials. But it's also REALLY important to keep track of your performance data, your ideas, and project details for your work. You ARE the business now, so don't leave it to your memory!
For accounting stuff, we'd recommend checking out Mint and/or Quickbooks. For tracking everything else, try to keep your notes consolidated. For digital, we recommend apps like Evernote. For analog... well, we're a notebook company!
5. Legal Standing for All of the Above
OH FOR FUCK'S SAKE, you think. GET ME OUT OF THIS ARTICLE I DON'T WANNA READ ABOUT—
We've only got five paragraphs here and we just blew four of them to calm you down. OK? So do us a favor—no, do yourself a favor—and read one more paragraph.
In tons of cases, everything you legally need can be completed in one afternoon. It's not (fundamentally) complicated, it's not super lengthy, and it doesn't mean Uncle Sam will spy (more) on you. People do this stuff every day and you could be one of them. (If you stopped reading right now but heard that it's totally doable, you'd have gotten the main point.)
. . .
But here's a sixth paragraph (oops) so you've got some specifics to Google. (1) You'll need to register your business in one state (probably where you live). Officially speaking, you'll probably want to start with that state's Secretary of State. (2) You'll need an Employer Identification Number (EIN) from the IRS. That's the business equivalent of a SSN (social security number). It's all online. (3) To receive payments as an official business entity, you'll need to add DBA ("Doing Business As") to your existing bank account OR open a separate bank account for your business (no harder than setting up a typical checking account—just ask the bankers).
. . .
With that, you should be set to hit the road! If you're excited, good—you should be! And don't worry if you feel like a silly amateur... we all did once. Silly doesn't hurt.
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