You are not running a business. You are copying grandma's hobby of making pies.
Like all grandmas, she had the hobby of making pies and we receive lots of them to make her happy. Like it or not, as grandkids, we are told to thank our grandma for the pie and tell her how wonderful is the pie, how we cannot resist finishing the last pie, which was the best. Then we ends up having more pies, although we did not like the pies till today.
Grandma is a very senior, (and I hate to say “old”) with very limited mobility and almost no eyesight. She will challenge her ability to make more pies and send them to her grandkids because she believes she makes them happier.
I was invited to the introduction of a new product with the business owner, and I was told that it is better product that best serve my health and my life.
I was given a bottle to try and I am just curious. I was told that it is a new product that is better than anything else for my health. I was intrigued and as I start to ask simple questions to find a reason to try the sample.
After asking few questions, I found a very strong resistance to answer these simple questions. Then, I was framed as a consultant who is looking for new clients. Then, I was told to not impose my service. The fact is I am not a consultant and I am not shopping for new clients. I wonder, if I should ask the business owner to simply search my name on google “Wael Badawy” to know who I am and what I do.
The product is introduced, as a combination of ingredients that I know, ingredients that I do not know, and ingredient that I may not heard about it.
This introduction triggered a flag, because I do not generally eat or drink what I do not know, in the absence of a strong motive, such as being ill.
THEN, the ingredients are very healthy and it has better fruits and vegetables that I do not know but I should consume for their valuable impact.
I am not sure what is missing here? But, my understanding is the consumers of organic products like to know everything about their food. They do not like the unknown chemicals that may impact their health. At this point, I saw the second flag, because I was judged again.
For me, rightly or wrongly, “organic” is good enough to justify its high price, but “organic” or natural ingredients that I do not know to be better for my health, is not true. Pure marijuana and marijuana’s leaves are organic and natural but they are dangerous and even though we need to know more details to understand its medicinal effect. If I consume it, I will be addicted and most likely, I will end up in Jail but I am consuming an organic natural plant!!!
THEN, the product’s presentation explained the principle of consuming the full fruit/vegetable in a juice, against extracts. In my mind, this principle is questionable with diverse arguments. As a matter of fact, having a full lime as a juice will change its flavor and texture with time because of oxidation, and it can turn to be poisoning or has a higher level of toxic. On the other hand, I cannot consume the whole orange or the whole banana. I have to peal it first!!!
– Anyway, I will pass on this argument because I am not the expert in food but I know what I eat.
At this point, I started to ask questions to better understand who is the business owner, what is the value of the product and what is the quality of the product in order to have a level of confidence to try the product.
I asked about the size of the business, to feel comfort that there are others who trust this product and buy it. I was looking for the customers’ WHY to compare it to mine, i.e. what are the reasons to buy this over-priced product. Oh, this product will cost 25x – 35x the price of a high quality 100% natural juice.
I asked about the plan to grow the business in the next three or five years. I asked about the vision of the owner to confirm the quality of the product, and there is someone stands behind the product. All what I received is “3 and 5 years are very long time”. In the absence of an answer, it demonstrates that there is no continuity and no guarantee to a quality control process. i.e. two samples of the product with the same ingredient, will have different taste.
I asked about the value of the product? The question aimed to help me to find my WHY, and I can try the sample. The articulated value is “You drink good natural stuff, so your body will perform better”. There is no confirmation or reference other than the business owner has issues and it was solved by personally drinking this combination. There was no testimonial and no confirmation of the business owner story. So, I attempted to clarify and I asked, does it help with a diet plan? or release weight? or having high energy? etc. The value was articulated as you eat better ingredients, you will be healthier and you feel good, with a proof.
I do not eat pizza and burger everyday and I eat apple and banana everyday. As it was said “One apple a day, keeps the doctor away!!!”
The articulated value is very general and I can have a blinder. I will use a mix of fruits and vegetables. AND, WOW, the juice will have the same value.
The answer continues to be “the ingredients used are planted by the owner in business owner’s garden and then picked and prepared to make the product!!!”
I asked about the science or the research behind this drink. The answer is that the business owner has researched each of the known and unknown ingredients. But, the business owner has two degrees (none of them are related to food, or health or technology or medicine). Yes, everyone may be impressed of these two degrees that have no relation to the business.
Moreover, the business owner has no passion to either degree and do not work with these degrees but the business owner offers this product to serve and help others.
The product looks professional with an expiry date to expire in two days!!! The product comes in a quantity of 1, 4 and 8 bottles. I do not know the reason that of the expiry date given that there is no research or science behind the product to determine the impact of the three days instead of two. I wonder If someone orders a pack of eight bottles, will he/her consome them all in two days. What about the logistics of producing, distributing and consuming a product that has to be kept cold (I assume) in two days?
It translates to a very limited number of customers with limited quantity orders, within a very small geographical area. So, the production, distribution and consumption in two days!!!.
I have to say that this is not a business, this is a grandma hobby to make pies, as:
1- The pies are initially FREE, till she asks for a favor in return, which will be fairly pricy.
2- The ingredients are from grandma apple tree in the backyard – Oh, by the way, the apple tree is very natural and very organic, because grandma is a senior and can not take care of the apple tree and no one fertilizes the tree.
3- Grandma believes that she makes her family happier by offering more pies. She consumes her effort, while her grandkids do not prefer to eat the pies, or do not eat them at all.
4- Grandma’s pies have to be eaten hot, and within one or two days.
5- No one knows the secret ingredient of the pies, even grandma herself does not.
6- Grandma pies taste differs from time to time. It is a function of the mood and the time in the oven, but grandma does not read the time.
7- Grandma serves only her family and close friends, which is a very limited consumer base.
The whole time, I was simply looking for a reason to try a sample of a new product. I may feel lucky to put my hand on a free sample of this product. I was trying to find a reason for myself. I know grandma, but I do not know the business owner. So please stop copying grandma hobby making pies and focus on building a business.
Note from the author:
This is a true story and I held the name of the product and business confidential because I have the care and passion to every small business and entrepreneur in our community. I strongly believe that the message within this post will help everyone in their business, So please let me know your thoughts below.
I declare that I owe the business owner the price of the sample because I did not feel comfort to drink it, which is my fault AND now the sample expired!!!
You are not running a business. You are copying a grandma's hobby of making pies.
Like any grandma, she had the hobby of making pies and we use to receive lots and lots of pies to make her happy.
Like or not, grand kids are told to always thank grandma for the pie and tell her how wonderful is the pie, how they can not resist the last pie which was the best. It ends up of having more pies, although they never liked the pies till today.
Grandma is a very senior, (and I hate to say old) with very limited mobility and very bad or no eyesight will challenge her ability to make more pies and send them to her grand kids as she believes she makes them happier.
I was invited to an introduction to a new product with the business owner and I was told that is better for my health and my life. I was given a bottle to try and I just curious. I was told that it is a new product that is better than anything else for my health. I was intrigued and as I start to ask simple questions to find a reason to try the sample.
I found a very strong resistance to answer simple questions. I was framed as a consultant or to be in the business of helping others. I was told to not impose my service. I am not consult and I am not in the business find other businesses to offer them service. I think they should simply search my name on google “Wael Badawy” and they will know who I and what I am not doing.
The product was introduced as a mix of some ingredient that I know and others that I do not know and I may not heard about it. – It triggers a flag to me because I am not in a position to eat or drink what I do not know in the absence of a strong motive. I am also framed that there are fruits and vegetable that I should be taken but I do not them, I am not sure what I am missing !!!
I predict that the consumer of these products are the type of individuals who are using organic products because they like to know everything about their food and they do not like the chemical that they do not know and may impact their health. I saw the second flag, because I was judged again.
I want to say that “organic” is good to justify its high price, but “organic” or natural ingredient that I do not know is better, is not true. Pure marijuana or marijuana’ s leaves are danger plant and even though we need to know more details to understand its medicinal effect. If I consume it, I will be addicted and I may end up in Jail because I am using an organic natural plant !!!
Then the presentation went to explain that principle of consume the whole fruit/vegetable as a juice, against extracts. In mind, it is questionable with many diverse arguments. As a matter of fact, having a full lime as a juice will change its flavour and texture with time because of oxidation, and it can turn to be poisoning or has higher toxic. I can not consume the orange or the banana as a whole, I have to peal it first !!! – Anyway, I will pass on this argument because I am not the expert but I know when i eat.
Then I started to ask questions to better understand who is the owner, what is the business value and what is the quality of the product in order to give me a level of confidence to try the product.
I asked about the size of the business, to feel comfort that there are others trust and use this product. I was looking to understand their WHY, or what are the reasons to buy this over priced product.
I asked about the growth plan in the next three or five years. I asked about the vision of the owner to simple get a confirmation and make sense of the quality of the product and there is someone stands behind it. All what I received is “3 and 5 years are very long time”. In the absence of an answer, it demonstrates that there is no continuity no guarantee to a quality control or that the same product at different time will have the same ingredient and taste the same.
I asked about the value of the product is to try to find my WHY, to tryout the sample. The articulated value is “You drink good natural stuff, so your body will perform better”. I asked, does it help with a diet plan, or release weight, or having high energy, etc. The value was articulated well, you eat better ingredient, you be healthier and you feel good. First of all, I do not eat pizza and burger all days and I eat apple and banana every day. “One apple a day, keeps the doctor away!!!” The articulated value is very general and I can have a strong blinder and I use organic mix of fruits and vegetables. AND, WOW, the mix will have similar value. The answers continues to be “the ingredients used are planted by the owner in business owner garden!!!”
I asked about the science or the research behind this drink. The answer that the business owner has researched each one of these ingredient. The business owner has two degrees (none related to food, or health or technology or medicine) and everyone is impressed of these two degrees with no relation to the business. Moreover, the business owner has no passion to either degree and do not work in these areas and offers this product to serve and help others.
The product looks very professional with an expiry date of two days!!! The product comes in a quantity of 1, 4 and 8. I also noted that the bottle has an expiry date within two days. I do not know the reason that of the expiry date given that there is no research or science behind the product. I wondered If someone want to order a pack of eight bottles, will he/her use them all in two days. what about the logistics of producing, distributing and consuming, a product that has to be kept cold (I assume) within two days. It mean that a very limited number of customers with limited quantity orders, within a very small geographical area. So the production, distribution and consumption in two days !!!.
This is not a business, this is a grandma hobby to make pies, it is:
1- The pies are initially FREE till she as for a favour in return, which will be fairly pricy.
2- The ingredient is from grandma apply tree in the back yard – Oh, by the way, it is natural and very organic because grandma is not in heath conditions to take care of the tree or even fertilize the tree.
3- Grandma believes she makes her grand kids happier by offering more pie and she consumes her effort, while the grandkids do not prefer to eat the pies, or do not eat them at all.
4- Grandma pies have to be eaten hot, and within one or two days.
5- No one knows grandma secret ingredient, even grandmas
6- Grandma pies differ from time to time, based on the mood and the time in the oven, grandma can not read the time.
7- Grandma serves only her family and friends which has a very limited consumer base.
The whole time, I was simply looking for a reason to try a sample of a new product. I may feel lucky to put my hand on a free sample of this product and I was trying to find the reason for myself. BUT, I know grandma but I do not know you. So please stop copying grandma hobby to make pies and focus on building a business.
Note from the author:
This is a true story and I held the name of the product and business because I have the care and passion to every small business and entrepreneur in our community. I strongly believe that the message will help everyone in their business, So please let me know you thought below.
I also say that I owe the business owner the price of the sample because I did not feel comfort to drink it which is my fault and the sample passed the expiry date!!!
“No” does not mean the end of the road.
In almost all meetings, the sales team saying that the customer is saying “NO”. No matter what is the new products or new suggest of a new customer, the sales team are repeatedly saying “but the customer said NO!.”
I wrote this blog to explain my view of the meaning of “No”.
“No” is the end of the road, so does every “No” means the end of the road?
I am like you, I said “No” many times to an offer and then shortly after, I look to buy the same product. So, what happened, why did I change my mind?
“No” is an expression of a mind state at the time. This mind state is expressed by a “No” word. So, does the mind state reject the sales offer?
No, there is a seldom chance to have a mind state rejection. It is just an impulsive response to a new offer.
To achieve a sale after hearing a “No”, is to work with the prospect to convert his mind state. To overcome a “No” and hear a “YES”, we should carefully discover the state of mind and not to stop at the word “No”. Asking the right follow up questions and listen to the prospect to figure out the reasons of the state of mind to overcome the “No”. Prospects do not buy based on a need, they buy based on
To Get from “No” to “Yes” in Sales: Listen to What the Client is Really Saying
Sales campaigns can be complex. Frequently, many moving parts need to be aligned. People must agree and products and services must fit the challenges that the client is facing. When you finally get to the point of presenting a proposal and articulating your solution, it is not uncommon to hear no. The challenge to you as a sales professional to not hear “no”, but to try and hear what the client is actually saying.
Remember that clients do not buy based on a need, they buy because their mind state is to say: “YES, I am buying or using this product!!!!!” A quick good example, when two kids are knocking on your door to sell you chocolate for a fund raising, many of us will agree to pay $5 for a bar of chocolate that is from unknown brand/manufacturer, does not test as good as my favourite chocolate that I protect from my family, which I can buy 2 for $1 in the dollar store. So why do I buy this chocolate bar. So, why do I buy this chocolate bar, more expensive than my favourite chocolate, taste not as good as my favourite chocolate and I keep it for them time till I donate it or I throw it away to the garbage.
A second example, is we pay for a dinner in a fancy restaurant for 8 oz. barbeque beef close to $50, while the same piece will cost $30 in an average restaurant and about $10 or cheaper in a low end restaurant with an open buffet salad and a drink. Included.
The third example, is we prefer to pay $6 for a gallon of Milk in a convenient store after waiting in a shot line and we do not go to chain store to pay $4 although we have the same likely hood of waiting in a line.
The reason to pay more to what we do not need is the state of mind in the first example, supporting a charity or a kid to achieve his goals. In the second the decision is driven by a desire to feel important or to have a special treatment or occasion and it does not have any relationship with being hungry or a desire to eat. In the third example, the perception of quick service is driving the decision despite the fact that in a smaller parking lot you a less chance to find a spot and get it faster.
So, how to explore the state of mind and what is the possibilities?
“No” means “I am not comfortable with your solution.”
The prospect will be looking for similar experience of solving his problems. The prospect is concerned that the solution may increase his workload or creating more issues and problems. In many cases, I learned that the prospect is suffering from other issues and non-related problems that impact his comfortable level with new product or service. “No” means talk to me more.
“No” means “We are not ready to commit.”
The prospect is either over loaded with busy schedule or there is a budget cycle that needs to be aligned. In many cases, I learned that the prospect has an issue with his superior and does not want to introduce a new purchase. “No” means come back later but not right now.
“No” means “We don’t get it.”
The prospect has a comprehension problem with the material you provided, in many cases the prospect would ask for more information or clarification. Despite the role of sales to explain what the product about but sometime the prospect himself is getting his brain busy that he hear what you say and does not listen to what you say. In many cases, I learned that the prospect has a board meeting or a major meeting in the immediate after the meeting and then the prospect does not have the state of mind to accept your information. This particular “No” can be always sensed when the prospect will ask can I keep this material, it is an immediate indication that prospect can not get it. “No” means explain to me in a different way, I am interested but I like to understand more!!
“No” means “Too risky for us right now.”
The prospect may feel that he understands the product but in reality the prospect cannot articulate the value and criticality for the product. The prospect is looking for articulation of the value and to trust the relationship. If you have a reference customer that the prospect trust is a good value. You may also build a trusting relationship. The word risky is red flag of a concern, for many small business and start up companies, it is a fear that the company many disappear or lack the resources behind its offering. In other situation, it is a concern of the performance, etc. “No” means comeback with more information to make me feel comfort and trust your solution. Many smart businesses can convert this “No” by introducing another technical salesman, customer support or other clients or consultant to increase the trust. A marketing campaign many be a way to convert this “No” to YES
“No” means ”We do not need your product.”
The prospect does see the immediate need of the product and how it can serve him. This “No” means that you did not do your due diligent and you need to better articulate the customer specific pain point and how you are solving it. Some intelligent questions will help you understand the gap. This may be a red flag for you to change your messages and come back to the prospect.
This “No” is an alarm that you better understand the prospects and align your solution to solve his pain.
“No” means ”We are not ready.”
The prospect is not inline with the product value, the sale team did not ask the right questions and did not articulate the answer pushing on the point of pain. More work is needed to understand the client, the culture and create a dialogue. This “No” is an invitation to better understand the prospect then comeback. The right set of questions will reveal amazing aspects of the prospects. This is an alarm that you are required to better understand the customer.
“No” means “I can’t support this.”
This prospect is not willing to be your champion or reference. This “No” may not have any relation with the performance of the product. The prospect may have an issue before or a pain that it heart the prospect. The prospect may have issues with his superior or have been threaten so has cannot speak about new products. This “No” may also indicate that the customer does not get what he expected from your products or the value is not delivered. This “No” is an indication of more work needed to align the prospect to your product values. Pay attention!!!
Next time you receive a “No”, try to understand the state of mind of the prospect. Think, adjust and go back; when you are ready. A prospect buys with his feeling and not based on a need, and he pays more than premium when ever he like and without a logical reason and it is not driven by a needs.
The Operational Floating Current Conveyor and Its Application
A five-port general-purpose analog building block, termed as an Operational Floating Current Conveyor (OFCC), is described. The OFCC combines the features of current feedback operational amplifier, second-generation current conveyor and operational floating conveyor. An implementation scheme of the OFCC is described and its terminal operational characteristics are used to yield a working device. The OFCC is then used as a single block to realize the current conveyors (CCII+ and CCII-) as well as the four basic amplifiers (i.e., voltage, current, transconductance, and transresistance amplifiers). The applications of the OFCC are presented and discussed. In the field of the analog filter synthesis, we proposed a new active universal second order filter using OFCC. It has three inputs and one output employing two OFCC, two capacitors and three resistors and can realize lowpass, bandpass, highpass, notch, and all pass filters from the same configuration. The proposed universal filters offer the following advantageous features: using active elements for the same type (OFCC). No requirement for component matching or cancellation constraints, which makes the filter easier to design, orthogonal adjustment of ω0 and Q and the circuits have low sensitivity. The simulation and experimental results are obtained and discussed.
Link to the list of other Peer Journal Publications
Yehya Ghallab, Wael Badawy, M. Abo El-Ella, and M. Elsaid, “The Operational Floating Current Conveyor and Its Application“, Journal of Circuits, Systems and Computers, Volume 15, No. 3, June 2006, pp. 351–372.
Be a Red Apple and surround yourself with Red Apples and don’t mind the Green Apples
Like all aspects of life, and in business, we have different customers who can be negative, positive or neutral. We have different employee who can be negative, positive or neutral. We have different co-works who can be negative, positive or neutral. No matters what is the example, we will always find red apples, green apples and brown apples.
The Red apples are the good ones, the delicious one, the performers, the positive, the high energy etc.
The Green apples are the sour ones, the ones who do not want to move but they do not decide, the undecided, I call them waiting for the train to have a ride or a hit, etc.
The Brown apples are the bad ones, the negative, the rejection, the non-performers, the road blocker, the negatives, Etc. These are the bad influences, who can harm you.
To be successful, you must be a Red Apple, surrounded by at least 90% Red Apples and do not mind up to 10% Green Apples. But, avoid Brown Apples and have 0% Brown Apples in your life. Your goal is convert Green Apples to Red Apples. If you stuck with a Brown Apple, you will be Brown.
It is Red, Red, Red, Apple; and only Red Apple.
The power of one cent
What is the power of one cent?
To answer this question, imagine that one cent doubles every day. As shown in the table, one cent after 9 days can buy you a coffee at $2.56. One cent, after 20 days, can buy a car at $5,242.88. One cent after 30 days can buy your dream that is worth $5 Million dollars. AND, you keep it to the following day, you will become a double-digit millionaires. One cent will be a $1,374,389,534.72 on day 38 and will be $5,497,558,138.88 on day 40.
The model above presents the strength of a network. I focus my effort to recruit my team and double double every day, or a week or a month. I can reach a powerful result and I have the passion and dedication to do it for 30 days.
The model is also applicable to sales, if I can double my sales every day, I can reach amazing business size after 30 cycles.
The cycle can be one week, one month, or even one year.
Just keep it doubling and do not rush and have the passion to be a billionaire starting with one cent.
John D. Rockefeller who is the world’s richest man and the first American worth more than a billion dollars, controlling 90% of all oil in the United States at his peak. said “I would rather earn 1% off a 100 people’s efforts than 100% of my own efforts.”
DOs and DONTs in networking events
Networking is the process of fishing for new customers or new order within a focused crowd. The effective networking will result into $$$! Yes: we network to make money, not to have fun. Yes: we network to make money, not to know more people. Yes: we network to make money, not to spend time.
The 4 DONTs of effective networking are
- Do not start with your name or business name
Starting with your name and your business will frame you in the audience mind to the basic service of what you do. It will immediately create a barrier between you and the audience.
When you say: “Hi, I am Joe and I am accountant”
It automatically generates a barrier between you and the audience. In the mindset of the audience, it will be one of these messages
“Oh, one more accountant in the crowd.”
“Oh, another one of them”
“Oh, I hate these guys, they do not do a good job”
All of these messages are toxic to your networking goals
- Do not wear the company shirt
Wearing a company shirt frames you within the company image. It would be reflect on the ability of connecting with the crowd. In my own experience, having a shirt of an elite service with extremely high reputation was not a good idea. The message in the head of the audience were
“Another guy from this company that charges premium?”
“I just got a call from this company last week, please not again.”
It automatically position you in a frame that impact the acceptance to your message.
- Do not have your logo
Having a logo frames you in what your company do and not how better or effective than your competitors. It is the type of barrier that you do not want. You shall focus of how better is your service or product than others. The message shall be “How do you outstand against others and why you are better. NOT what do you do.
- Do not talk about your business
Do say what your business is doing, or the nature of your service. Focus on the values that your provide to the different clients. Focus on why your customer will come to you and how do you stand against the crowd.
The 4 Do’s of effective networking are
- Do ask an engagement question
An engagement question is the best approach to qualify your crowd. You shall be able to adjust your message to your crowd. If you the first question does not qualify the crowd, Ask a second question but there is NO THIRD. If you can not qualify the crowd, think about another question for next time.
- Do say a pain-hitting paragraph
A pain-hitting paragraph is a simple statement that characterizes the pain that your business is addressing. Identifying the pain immediately creates a link to the audience and you will get their ears for few minutes. Three – four statements conquer in the audience mind that you know and feel their pain. The audience perceives you are like them, and people like to buy from people like them, who they like.
- Do say what is your solution to the pain
After the pain-hitting paragraph pause for a moment, so the audience can digest what said. Then, say HOW you solve the pain, WHY your service is better, and the reasons they should use your service and not others.
- Do say how to access your solution
At the end you shall say how the audience can connect to your service, such as access a website. You must leave a contact information with an action so the audience can connect to you. Or simply, say “your name, I will be more than happy to assist you.”
The five toxic ingredients to your business success
The five toxic ingredients to your business success are the top 5 elements that existed in your business and you should be able to watch or fix.
Ingredient #5 Miss guided arrow.
The miss guided arrow results of not having a vivid vision for your business. There is no actionable plan for everyday activities.
It always results from the lack of execution plan towards a Target.
Ingredient #4 Ineffective networking:
Networking is the number method to get prospects and convert them into clients. Goal number one of networking is making $ through selling more. You hang around the wrong crowd.
Ingredient #3 Bad follow up:
Follow up is the most effective way to either sell more or adjust your business to sell more. Businesses usually overlook following up with their current client and then Fail to follow up with your current customers to bring new prospects.
Ingredient #2: Wrong focus:
Businesses (either production or service or consultation) have three main sections or areas:
1- Production: which which is the process of fulfil your clients request. The process of producing the final product to deliver to your clients.
2- Operation: which is the process of producing what you sell. it is how to run your business.
3- Sales and Marketing: which is the process of getting news orders, client or customers.
We always Focus on the wrong part of the business. The area which we feel better happy and within out zone of comfort.
Your biggest challenge in your business is “You”.
You are stubborn, you do not accept advices, you repeat the same mistake.
You are not open to change when it is not working.
If you would like to discuss this post, please email me firstname.lastname@example.org
20 Questions to ask Before Starting a business
So you’ve got what it takes to be an entrepreneur? Now, ask yourself these 20 questions to make sure you’re thinking about the right key business decisions:
- Why am I starting a business?
- What kind of business do I want?
- Who is my ideal customer?
- What products or services will my business provide?
- Am I prepared to spend the time and money needed to get my business started?
- What differentiates my business idea and the products or services I will provide from others in the market?
- Where will my business be located?
- How many employees will I need?
- What types of suppliers do I need?
- How much money do I need to get started?
- Will I need to get a loan?
- How soon will it take before my products or services are available?
- How long do I have until I start making a profit?
- Who is my competition?
- How will I price my product compared to my competition?
- How will I set up the legal structure of my business?
- What taxes do I need to pay?
- What kind of insurance do I need?
- How will I manage my business?
- How will I advertise my business?
10 steps must do, to start your business
Starting a business is exciting—but also demanding. This how to start a business guide addresses some of the most common startup steps to ensure that your company is ready for success.
Prepare a business plan and materials
1. An important first step is preparing a business plan to define your business, products and services, and outline your goals, operating procedures and competition. If your company needs funding from a traditional loan or venture capitalists, a business plan will be required. Make sure your plan includes a marketing approach, so people are aware of what you’re selling and how to find you.
2. Create a business logo, cards and stationery. These items establish your company’s identity and help potential customers find and remember you.
Meet legal requirements
3. Of course, incorporating your business or forming a company with a province or state is important because it protects your personal assets from business debts and liabilities. Other benefits of forming a corporation are tax advantages and greater credibility with customers, vendors and business partners.
4. Select an accountant and attorney. Many small business owners seek advice from accountants and attorneys. As you search for an accountant and attorney, get referrals from friends or family, and look for professionals who have worked with other small business owners or companies in your specific industry.
5. Get necessary tax identification numbers, licenses and permits. A federal tax registration is required for corporations that will have employees. Also keep in mind that most businesses need licenses and/or permits to operate—in your city, municipality, county and/or state.
6. Insure your business and investigate other requirements. Some industries have specific insurance requirements. Discuss your needs with your insurance agent to get the right type and amount of insurance. Remember to look into any other government tax and insurance requirements that might apply to your business, particularly if you have employees. For example:
Payroll tax requirements
Sales and use tax
Prepare yourself financially
7. It is crucial to separate business finances from personal ones, so open a business bank account. Most banks require company details, such as formation date, business type, and owner names and addresses. If your business is not incorporated, most banks will require a DBA (doing business as or fictitious business name). Contact your bank about requirements prior to opening an account.
8. Arrange your business accounting and apply for loans. You may want to use an accountant, or handle finances yourself with a small business accounting solution. Either way, properly account for all business disbursements, payments received, invoices, accounts receivable/accounts payable, etc. And if you don’t have enough capital to start a business, this is also the time to seek funding from banks or through Small Business Administration (SBA) loan programs.
9. Establish a business line of credit. This will help reduce the number of times your company prepays for purchased products and services. It also helps establish a strong credit history, which is helpful for vendor and supplier relationships. Getting a Dun & Bradstreet (D&B) DUNS (or D-U-N-S) number for your business is advisable, as it is often used to check business creditworthiness.
10. Ready your workspace. For home-based businesses, ensure you are meeting city zoning requirements for your area. For non home-based businesses, you’ll likely need to lease office space. Don’t forget to purchase or lease furniture and office equipment to get your business up and running.