Sunday, March 10, 2019

how to start a business

how to start a business


How To Find The Best Location To Start A Business - Forbes

Posted: 08 Mar 2019 04:52 AM PST

ShutterstockAntonio Guillem/Shutterstock.com

What is the best location to start your business?

Location can play a major role in the momentum your startup enjoys, how easy it is to attract funding, and how much you enjoy the journey and actually profit. Use these nine points to pick the optimal location to setup and launch your startup.

1) Know Your Goals & Needs

Even if you are happy starting out in a garage or coworking space it is wise to anticipate what you'll need to really fuel and scale your business over the coming months and years. You can always move or branch out, but you'll need a strong start to get there.

What's your big vision? How much money will you need to raise to get there and from whom? Who else will you need to help on the journey? How much will proximity and overhead impact your ability to survive and scale?

2) Where You Can Afford it

Some destinations are dramatically more expensive than others. That not only applies to direct costs of incorporating a business, but every day overhead and living expenses too.

Peter Thiel has relocated his funds and teams from Silicon Valley to LA because founders were just losing too much money on rent, instead of being able to invest their funds in their startups. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. For a winning pitch deck, take a look at his pitch deck template (see it here) that I recently covered.

Atlanta may be 54% less expensive than San Francisco for living and housing your startup. You may have to watch office expenses and lots of lunches and coffee meetings. If you can even afford to take a salary after that, you'll probably work and sleep a lot better in a real apartment than out of your car. Though, staying hungry can give you a lot of motivation.

Every penny can matter in the early days of a startup. It's either going into the business, or being wasted. Though if other factors force you to more expensive destinations, look for ways to get creative.

In this regard, I have the pleasure of interviewing some of the most successful entrepreneurs on the DealMakers Podcast. I recently interviewed the cofounder of Vimeo, Josh Abramson. He sold his most recent company for $41 million in cash. After college he first moved to San Diego before finding his sweet spot in NYC. He and his cofounders split the rent on a 5,000 square foot New York condo, and enjoyed the business tax deduction for a home office (listen to the full episode here).

3) Where You Can Find the Talent

If you plan on having a fast growth startup that really scales, you are going to need a team. More founders are opting for remote, distributed teams around the world. Many have found technical help overseas in countries like Spain, while maintaining headquarters in the US.

In many cases there may no longer be a need for an old school traditional office. Don't splurge on it and all of the frivolousness that comes with it if you don't need to.

If you do feel the need for an in-house team, you'll have to start or relocate your business where you can find or bring talent. There is a lot of talent in Silicon Valley, New York and London. Though you'll have to pay substantial wages in order for them to eat and stay housed. If that's not in your lean startup budget, consider a less expensive city.

For other less expensive cities you may want to check Miami, Atlanta, or Austin.

4) Where You Can Talk to Customers

Having surveyed numerous high profile investors and founders that have achieved super-sized exits, it is clear that talking to customers is one of the most important things an entrepreneur can do.

It is vital in those first days to find the right product-market fit. It's very important to keep gaining direct feedback from users. Investors want to see that data too. A good example of this is Eric Ryan. His latest company went from zero to $100 million in sales within the first 24 months of launching. During our interview he shared how he even put his own cell phone number on the packaging of his products so that he could be closer to his costumers (listen to the full episode here).

Now, you may not have to speak to them in person, or live full time where the bulk of your customers are, but it does help to be there. You can always spend weekends there or host popup shops, if needed. Or be sure you are mastering this online.

5) Where You are Inspired & Supported

Don't overlook this essential ingredient in launching and growing a startup. There are going to be a lot of tough days. That's okay. The great days make it more than worth it.

The dark days will bother you less if you have a good support system. You can enjoy a lot more good days if you are in a highly entrepreneurial environment. One that is innovative and gets it.

Look at the top startup accelerators and you'll find one of their common threads is getting founders together. Bringing together a class of founders in different startups, as well as connecting previous graduates to newcomers. This also often leads to great introductions to investors.

6) Where You Can Be Most Productive

Ideas are cheap. Execution is what makes the difference.

While many may move to New York or San Francisco to embed themselves in inspiring startup ecosystems, productivity still rules.

If you can be more productive and get more done each day to grow your business from your couch in Idaho than commuting for six hours a days in Los Angeles, then do that. If you can actually get more done in a coworking space than with all the mayhem at home, get out and do it.

Ultimately you need to find your sweet spot and get more done than the competition.

7) Where You Can Meet Investors

Some cities just offer far better networking opportunities. In some cities there are fantastic odds of meeting investors at the gym, coffee shop and happy hour than others. You can run into a dozen a week, where other cities may continue coming up short handed.

Once you dive into the fundraising process, you'll need to be building relationships with investors every month. You'll need to have regular meetings to pitch, and to get through the due diligence process.

Having to fly and drive that much can soak up a lot of capital and time. Do the full math and see what still makes the most sense.

8) Where Investors Want to Put Their Money

Silicon Valley isn't just more to a high concentration of VCs and funds, it also attracts a lot of international VC money. Just like NYC. Then there are cities like Bangalore, India and London where investors are plowing in a lot of outside money.

9) Where the Taxes and Liability is Low

Selling your company for $1 billion sounds great. Though it is only really as good as how much you get to keep. This is especially true if diluting your ownership through fundraising.

Look for investor friendly and business friendly cities where taxes are low and you can keep far more of your income and any capital gains.

Be Your Own Boss: How to Start Your Own Business - Thrive Global

Posted: 04 Mar 2019 07:29 AM PST

Corporate America is definitely not for everyone. Poor job security, long hours, unsatisfactory pay and working for someone else isn't how a lot of people want to spend their lives. However, most people don't see any other option.

Starting a business sounds like a great idea, but it can be a daunting task for people who don't even know where to start. If you're new to entrepreneurship, then coming up with a business idea, developing a strategy and securing financing can sound intimidating.

If you're not interested in sticking with the regular 9-to-5 grind, here's what you need to know about starting your business.

Choose and Research an Idea

Of course, the first thing you need to do is pick an idea. This doesn't just mean choosing the type of product or service you want to offer; it also means deciding what type of business best suits your idea.  

Should you open a brick-and-mortar store or operate as an online-only business? Are you marketing to consumers or other businesses?

Be sure to carefully and thoroughly research your idea. Determine your primary audience, the costs associated with running this type of business and your competition.

Don't rush this process. Starting a business isn't a race. Take your time and be sure you are confident in your business idea before taking the next steps.

Develop a Business Plan

Once you are confident in the type of business you want to run, write a detailed business plan.

A business plan will be crucial when securing financing and recruiting experienced employees to join your new business venture.Your business plan should detail all of your goals over the next five or so years and how you plan to achieve those goals.

Additionally, your business plan should include:

  • Company description: Include information such as your ownership structure, registered business name and a quick description of what your business does.
  • Products and/or services: Describe the types of products and/or services that you offer, your pricing model and your target audience.
  • Marketing plan: Describe how you plan to market your business and increase brand exposure. Consider social media marketing and online advertising.
  • Financial projections: Potential financiers will be particularly interested in this section. It should outline your expected expenses, revenue and profits over the next several years. The idea is to demonstrate that your business will generate enough profit to pay off your loans.

Writing a clear and concise business plan can help you realistically assess your goals and expectations in addition to helping your business secure financing.

Register Your Business

Registering your business is the first step that turns your idea into reality. You should understand the different types of business structures and which one is right for you.

This process is very important, so you should seriously consider consulting with an attorney to ensure everything is done correctly. You may have to obtain permits and business licenses and abide by certain regulations, depending on your location. You'll also need to choose a business name if you haven't already.

Types of businesses include:

Research the pros and cons of each type of business structure and understand the tax implications of each one.

Secure Financing

Unless you're starting a sole proprietorship that doesn't require a lot of capital for materials, you likely will need to pursue financing. Aside from small-business loans, there are many options to choose from, including:

  • Venture capitalists
  • Angel investors
  • Business credit cards
  • Investments from friends and families

Of course, small-business loans are typically more favorable than these options. Depending on your needs, you can choose from equipment loans, SBA loans, term loans and many other flexible means of financing an emerging business. Be sure to review the different types of small-business loans to determine which option is the best for you.

Once you decide on a source for financing, you should be able to demonstrate how you will use the funds, how these expenses will benefit your business and how you plan to pay back your loan. Loaning money to startups can be incredibly risky, so you need to build confidence with potential investors to increase your chances of being funded.

Starting a small business can be an intimidating and difficult endeavor, but the advantages of being your own boss make it well worth it. These steps can help put you on the right track to starting a successful small business.

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