5 Things to Consider When Starting a Business

Brad Shimp wrote a great article here called "Before You Start a Business" and I thought I'd add to his thoughts there a bit. I read a great article in INC. magazine that helped spark some of these thoughts, and I looked at how I've started some of my own businesses and Idea Anglers in particular. Hopefully between these things to think about and Brad's article too, you'll either feel good about the business you're thinking about starting, or know that you're not quite ready for the leap.

1. Not all individuals are cut out to start their own business.

It takes a lot more than just an idea, general business knowledge and money to start a business. You have to have nearly super-human ambition and drive. You may have an 8-5 already and are thinking about going out on your own. You have to eat, sleep and breathe your business. Even if you have a clear schedule, expect long hours, starting a business includes working weekend, holidays and even my last vacation was intruded upon by the business. Consider the sacrifice, not only personal but realize that this devotion to your start up is going to effect your friends and family too. You may have that ambition and drive already in place, but don't let it wreck your personal life. While it may eat away at any and all personal time you previously had, make a point to schedule in time for your family and friends. They'll be your #1 supporters, but you can't cut them off. When you take your wife out to dinner, avoid that urge to check your email at the table.

2. Heaven forbid, you may have to stare failure in the eye.

It's bound to happen. I'm not saying your business will fail, but in any business there may come a time when you take a loss on a project, you don't meet sales projections, or a high profile doesn't renew. These things happen and you have to be able to sleep at night knowing that failure won't just affect you. It'll impact your investors, employees and their families. If you started out with the ambition and drive you need, you'll recover and hopefully be even stronger after moving past the obstacles. While starting a business you're passionate about could be the most rewarding thing you can do in a lifetime, don't let the sugar coating of other popular business publications blur your vision.

3. Do not wear your heart on your sleeve.

You simply can't. As the leader, your business posture and emotions effect everyone else in the company, including your clients. If your outboard won't fire up 10 miles out to sea with a vessel full of employees and clients, you can't start shouting four letter words while throwing tools and equipment overboard. Keep your cool, be solid. You are the foundation your company is built on, and if you appear weak, it will reflect on the rest of the business.

4. You need to be able to sell used cars.

It doesn't matter if you're not starting a retail company. You could be starting a technology company, an accounting company or lawn mowing business. Regardless, you have to be able to sell your idea from the get-go. Whether it be to potential partners, investors or your future clients. Technology has led the world to a much less personal approach to business, not much is done on a handshake anymore. You can find and apply for jobs online, you can buy and sell products online, even outsource and freelance. Crowdsourcing is also a great tool that makes all of this possible and easier than ever, but regardless of the screen names, websites and email addresses you can hide behind, you're going to have to be able to sell your business to others. Like a used car salesman, the people you approach may have their heart set on a Toyota, and if you don't have one on the lot, you'll have to talk them into a Ford. The investors you approach, for example, may be looking for a software company with an accounting focus, and you may have to convince them to invest in your software company that's developing social networking software.

5. Be receptive to taking the back seat.

Obviously you wouldn't start a business without the hopes and dreams of it becoming very successful. There may come a time and a day when you have to share some of the responsibilities on your plate with someone else. You may have designed all of your product line, but as times change and demands increase, you may need to hire some fresh new research and development. As the economy shifts and trends change, you might need to alter the direction and focus of the company, and if you can't write a book on the new trends, you may need to hire someone who can and let them lead that new drive. If you're very successful, you might get offers to be purchased by a larger company. Who wouldn't want to be acquired by a company like Google? You may achieve success, but you can't be complacent if you expect to succeed year after year.

I hope I haven't painted a grim picture to starting a business, or discouraged you. A lot of the lessons both in life and business are learned the hard way. It's always a plus when someone can clue you in before you find yourself licking your wounds.

"If you're crazy enough to start a business, we're here to help!" -Idea Anglers

About the Author:
Neal Rohrbach (@nrohrbach) is Co-Founder and Chief Creative Officer at Idea Anglers. He also owns Dixie Design.us, providing graphics, marketing, and web products. His portfolio boasts successful projects on both small and global markets, from "Mom & Pop" businesses to professional sports teams and Fortune 500 companies. He is a marketing zealot, graphic designer and entrepreneur. He thinks outside the box, not off the shelf.

Choosing a Bank

Although banking can seem like a commodity service these days, choosing a bank is one of the most important decisions you'll make as you build your business. There are some important differences in how banks handle their business customers - particularly their small business customers. The better you get to know your banker, and more importantly the better your banker gets to know your business, the better off you'll be.

Building these relationships takes time, consistent relationships, and real interest from your bank. Here are some things to look for when choosing your bank, in order from "obvious but maybe less important than you think" to "less obvious but maybe more important that you think".

Do they have the services you need?This should be a pretty simple checklist and might include items like online wire transfer and check scanning.

Are their fees reasonable?Again pretty simple, but make sure you look at transaction fees as well as monthly feeds. Try to do a good job estimating how frequently you do things like sending foreign wires - these fees can add up quickly.

What types of lending will they do? Some banks have strict policies to lend only against hard collateral like real estate. Some banks will lend against a less tangible asset like an exclusive license. Some banks will lend against cash flow.

How much SBA lending have they done? If you're a small business, you might be eligible for borrowing through a range of programs offered by the Small Business Administration. Knowing what programs are available, keeping up with changes to the programs, and navigating the process of applying for and executing an SBA loan is quite a job, and some banks have done more than others.

Who will your contact be, what's their role at the bank, and how long have they been in the role?Will you be working with a revolving door of junior people just out of college, or you will you be working with a VP who's been around for 10 years? The answer to this question will have a lot to do with the size of your bank, and we'll talk about that more below.

Early in the life of your business, it's easy to be focused on the simple question of which services a bank offers. If you need online banking and your bank offers online banking (they all do), it's easy to just be satisfied that your current needs are being met. That being said, it's really important to look into the future and try to anticipate what you might need next year, or 3 years from now, or 7 years from now.

You need a good long-term relationship with your bank. You need a good long-term relationship with your banker. The better your banker gets to know your business, the more willing he or she will be to 'go out on a limb' for you when you need it.

As is the case with any relationship, there will be bumps in the road, and the better you and your bank know each other, the better you'll be able to work through them together. A good, longstanding relationship with your bank will be invaluable if and when you need to borrow money.

Whether it's a term loan tied to an expansion effort or a line of credit that helps smooth out seasonal bumps in your business, your bank is taking a risk on you each time they loan you money. If they know and trust you and your business, they're much more likely to take that risk when you need them to.

There are a few reasons a small local or regional bank may be a better choice for small businesses.

• They probably offer services that are similar or identical to those of larger banks.
• Local banks have a vested interest in supporting businesses in their community.
• You're a larger part of a small bank's business, so they may be more motivated to help you succeed.
• Your banker is likely to be in a more senior role at a smaller bank, which is especially important if you need to borrow money. Big national banks aren't all bad, but it's not unreasonable to say that at a big bank the 'small business relationship manager' role is likely to be staffed with fairly junior people, may be used as a stepping stone to other roles at the bank, and therefore may have fairly high turnover. This isn't such a good thing if you want your banker to know your business well, or if you need your banker to 'go to bat' for you.
• Due to the need to manage a large pool of borrowers, lending policies at large banks tend to be based on a strict set of guidelines, versus being based on your banker's knowledge of and confidence in your business.

Don't just pick a big name bank and sign right up. Check out some small local banks and see what you think. Choose a bank not only based on services and pricing, but also based on your ability to get to know each other well over the long term. You'll be much more likely to think of your bank as a trusted partner in your business - not a necessary evil.

Shameless plug: Our business is based in Seattle. I switched from working with a large national bank to banking with Viking Bank, a small local bank, and the difference has been night and day. If you're based around Puget Sound, you should bank with Viking. I love my bank!

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Andrew Bennett runs Deneki Outdoors, a company that owns and operates fly fishing lodges in Alaska, British Columbia, the Bahamas and Chile. Deneki Outdoors hasa web site,a blog,a Facebook pageanda Twitter page.

Before You Start a Business

Starting a business is an exciting thing. But before you get started, there are some things you need to figure out.

1. Are you going to work full, part, or some of the time?

How much time are you going to be able to give to your business? This is determined most often by whether you have another job or responsibilities. The good news is, you can start a business no matter how much, or little, time you have to give.

There are two important things to consider no matter how much time you have to give.

First, you need to have really good time management if you are building a business. If you only have 1 hour per day, you need to make sure you are doing the things you need to be doing. The same thing goes for if you have 10 hours.

Second, you need to have consistency. If you keep coming at it day after day, you are going to start to see success. Even if you do not have very much time to give, if you give that little bit of time on a consistent basis, you will make progress.

So, at first it doesn't really matter how much time you are going to give to the business. Instead, focus on spending the time you do have effectively, and going at it consistently.

2. Where are you going to find out the things you don't know?

It shouldn't take you long to figure out that there is a whole lot that you do not know about running a business. Its okay. You don't need a college degree in business adminstration to start and run a successful business. You do need to know where to look for knowledge.

Books, blogs, and seminars are a great place to go for self-learning. You can spend no money, or a lot of money. The upside is that you will be educating yourself and equipping yourself with the knowledge you need. One downside is that the information is often general, and you will have to figure out how to apply it to your specific situation. Another is that you will be learning it and applying it yourself. You need to be careful not to get sidetracked and try to learn a whole new subject that you really won't have the time to accomplish on your own anyway.

Consultants. These are people that you can hire for blocks of time to help out with your business. This may not seem like an early play for your business, but maybe it should be. Even a few hours of advice from a qualified consultant can really help you as you set up and program your business for success.

Is a consultant too expensive? Well, what if you hired a consultant for $100 per hour. Sure, at first this seems exorbitant, a luxury that you cannot afford. Ten hours will cost your $1,000. Ouch, right? Maybe not. If with that 10 hours the consultant can really help you solve some of your early problems and can get your through things that might actually take you weeks, months, years, or eternity to figure out, it is actually money well spent. Of course, if you are hiring your cousin Jeb who just graduated from business school, you might be throwing your money away.

There is another option. You can get a mentor. Finding someone with business experience can be a great move as you start your own. However, it can be difficult to find the right person. Your dad who was a vice president of some big company may not have the insight you need for your bootstrap startup. Not that you shouldn't take his advice. But what you really need is someone who has walked the path you want to walk. If you find a person who has started from scratch and created a booming business, and she is willing to share her knowledge with you, then you have found paydirt! Don't squander that opportunity.

3. What about the law?

Chances are, you don't really know a whole lot about incorporation, let along limited liability corporation, et al. You may think you can just worry about this later on, but it is actually a good idea to get the legal structure of your business squared away right from the beginning.

I am not an expert on this subject, and each situation calls for a different approach. But the key word for you is "protection." Starting a business is a risky endeavor. You may be putting a lot of personal funds in to it, but that doesn't mean you need to risk everything. Form a corporation and learn how to run it properly so that you can protect your assets.

This is not about finding loopholes or any such thing. Sure, later on there are positive tax benefits to certain business structures. But for right now, you need to make sure you are building a wall of safety between your business and your family. One lawsuit, or even one enormous tax bill, can really have very harmful effects on you personally if you do not protect yourself.

So, do spend the time and money to get protected through an corporation. Whether you want an INC or an LLC depends on your situation. Talk to a lawyer who you can understand and who is willing to take the time to explain everything to you (preferably without billing you by the hour for it).

4. What are you really going to be able to do, and what are you going to need help with?

You can try to do everything yourself in your new business. However, chances are, while you are really good at certain things, there are other things that you absolutely stink at. You need to take some time to map these two areas out and to figure out where you are going to need help.

Knowing this from the get go can save you time and headaches later on. It might even save you money, or -- "gasp!" -- make you money!

I have already talked about bringing in consultants. You will also need to tap professionals, like a lawyer to help you set up your corporation and probably an accountant and a banker.

And eventually, you are going to need employees or contractors. If you are the go it alone type all the way, then hiring contractors to do work, such as marketing or writing, is the way to go. You just tell them what you need and they deliver.

Employees are another ball of wax. They take serious commitment. Prepare yourself for employees by creating systems for everything in your business from day one. That way, when they come on, they will be able to get moving right away. And your won't want to take a baseball bat to your head.

Being realistic about what you can and can't do can actually help you create a better business and grow it faster. It will also help you to shape what kind of work and projects you take on, so you don't get sidetracked from your ultimate vision.

5. Are you looking at potential business, or possible business?

There may be scads of possible customers out there for you to tap in to with your new business. However, just because they are there, it doesn't mean that you can get them right away. Do not make the mistake of planning your business based on what's possible. Instead, focus on what you can reasonably attain in the first year. What is potential with your limited resources?

Base your plans around this. Take a hard look at your current network, your current marketing ability, etc. How do you plan to get sales? Build your business around your real potential.

6. Do you  see the bigger picture?

I will just say this. You need an ultimate vision for your new business. That vision needs to be written down and expounded on in a business plan. You also need to think about mundane things like a budget, operational systems, and details. Oh, the details! Without a big picture vision and plan, the details will strangle your business before if ever gets off the ground. With the plan, the details don't go away, you will just have a better handle on them and a better idea of what to do with them.

This is a very quick snapshot of some of the things you need to think about before you start a business. Each of these ideas is expounded upon in great books and blogs and magazines. Educate yourself on what you need to do before you get started.

I want to recommend some books or blogs for you to read. But there are just so many and it kind of depends on your situation. So, if you want to know what I think you should read for your situation, send me an email and describe what business you are starting (or currently running) and what problems you are facing or what areas you need to learn more about. I will send you some personalized suggestions!

-- Bradford Shimp is a co-creator of Idea Anglers. Email Bradford for your reading recommendations or with any questions. Bradford writes a small business advice blog at AllBizAnswers.com and provides business services at BradfordShimp.com.

When is An Idea Worth Turning into a Business?

Ideas are funny things. They are free to have, but take a whole lot of work to turn into reality. You may have a ton of interesting ideas for businesses. However, you will only be able to turn a handful, at best, into businesses by yourself. 

Knowing that it takes a lot of hard work, and in some cases a lot of money, to turn even the best ideas into a successful business, you will feel the pressure to pick the right idea. What separates an idea out from the pack and makes it worthy of being a business?

Start With Your Biggest Passion

The fact is, almost any idea can be turned into a viable business. That is because it is not only the idea that is important, but also how that idea is implemented. In fact, implementation is even more important than the original idea.

Therefore, you don't need to spend as much time as you think on finding the idea that you think will make the most money. Far more important is to find the idea that you are most passionate about.

The point is, if you are going to turn your idea into a business, you are going to have to live with that idea day after day, night after night, maybe for the rest of your life. So while you may have a great idea for a better mousetrap, do you really want to manufacture mousetraps for the rest of your life?

You may want to back off your actual ideas when figuring out your passion. Take a step back and look through the annals of your life. What comes up again and again that gets you excited? For instance, I am passionate about being a writer. I love the written word. Knowing this, I can look at my idea to start a pizza and pasta shop with a critical eye. While I would love the creation process, I wouldn't want to get up early every morning to make fresh dough and pasta.

Look at all of your ideas through the lens of your passion. Which idea has the most staying power for you?

Can You Get Others Interested in Your Idea?

Once you have zeroed in on the idea that you are most passionate about, it is time to try to get others on board. While you may be able to start a business all by yourself, you are going to get much farther much faster if you assemble a good team. Don't worry, at this point you don't have to worry about employees. That will come later on. 

I don't suggest spending too much time looking for support and passion for your idea amongst your family and friends. The exception to this would be if those people are entrepreneurs and experts. Chances are that they are not. Experts and other entrepreneurs are just the type of people you need to discuss your idea with. 

Idea Anglers will soon be offering services designed to help you connect with just those type of people. You will be able to do so in a trusted environment, so your idea will stay yours. You will have a chance to connect with other passionate people to get feedback on your idea and even to find the partners you will need to turn it into reality.

Plan, Plan, Plan

Once you put your idea through the personal passion test and find some collaborators that share your interest, you can start cultivating that seed of an idea. There is a lot to accomplish in the planning stage. One of the best things to tie it all together is to create a business plan. 

Business plans can be daunting tasks. We are hoping to make the process a little easier through collaboration, and perhaps even some neat software down the road. For right now though, just keep it simple. Don't get caught up in fancy language or complicated profit projections just yet.

Some of the first things you need to figure out is a. how you plan to make money, b. who are the people who are going to buy from you, and c. who is going to be on your team to make it all possible.

We will have collaboration tools to help you plan and execute your idea into a business available on the membership side of site once it goes live. In the meantime, we are building a free library of resources to help you along your path to success.  

Just Add Water

As you see, its not really about coming up with a million dollar idea. It is about developing an idea that you can stay passionate about, getting a team of advisors, collaborators, and partners, building a plan and executing it. 

When is an idea worth turning into a business? When its the kind of idea that you will happily work on every day for the rest of your life. If you are not willing to work at it, its not worth turning into a business.