7 Things to Consider Before Setting Up Your Own Business

by / ⠀Startup Advice / March 31, 2021
7 Things to Consider Before Setting Up Your Own Business

While 2020 and the first quarter of 2021 have been trying times for many, those who have a great product or service to offer will find there’s perhaps no better time than now to get started. Setting up your own business requires plenty of planning, financial decisions, and a host of legal obligations. Here are seven of the top-level categories you’ll want to consider before taking the plunge and becoming your own boss.

1. Know your target market inside and out.

Who is your intended customer? What is the target demographic? Although this is one of the most important considerations when starting a new business, it’s often overlooked or minimized. Keeping your typical customer in mind will affect absolutely everything, from how you market yourself to where you place any brick-and-mortar locations.

You’ll save yourself a lot of future wrong turns by taking the time to conduct market research before and after you launch. Knowing how to speak clearly to the people you hope to serve provides the key to their engagement with your product or service.

2. What’s your endgame?

Do you hope to become a leading name in your local area or a specific industry? Or is your mission to expand globally? Pull together your initial 90-day plan but also think about where you hope to be in one, five, and 10 years. Do your best to set realistic goals for each of these longer timelines. Use both your immediate and long-range goals as a filter for decision-making as you launch and grow your business.

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3. Future-proof your business through thoughtful branding.

Picking your company name and branding is an exciting step, but it’s important to do your homework before you commit. While you won’t want to spend too much time and money on this step, you don’t want to have to re-do it anytime soon, either.

Your brand needs to become synonymous with your messaging and what you offer customers. Take time to better understand color theory. Seek help from expert designers and marketers to make sure your brand instantly conveys your expertise.

For the sake of avoiding future problems, it’s critically important you take the time to research your preferred company name. You don’t want to end up in a conflict with another brand by the same name. A quick Google search can provide a good start. It’s also a good strategy to consider search engine optimization when coming up with the name of your company.

Let’s say you’re starting a plumbing business in Montpelier. People searching for a plumber in Montpelier will typically type in terms like “Montpelier plumber” or “plumbers in Montpelier.” Assuming a quick search yields no conflicting results, you might get a headstart on your competitors by going with an obvious company name such as “Montpelier Plumbing Services” or “Montpelier Plumbers.” To get more plumbing contracts, you might need to know about ways to generate plumbing leads for any business.

4. Who are your competitors?

It’s also vital you take a look around at the competition in your local area. There may already be a few dominant companies you can examine and take inspiration from.

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Maybe your competitors are great at marketing themselves or have been established in the community for several years. Look at what they’re doing right and, as appropriate, incorporate some of their winning tactics into your business plan. You might also find it enlightening to spend some time reading online reviews of their service written by current or former customers.

5. Where will you work?

Whether you’re establishing a solo enterprise or plan to hire a couple of employees to get started, the physical location of any office space is a huge consideration.

Maybe you’re thinking about converting your garage into a workshop or perhaps you’re looking at leasing an office in the center of the city. Before you start moving any furniture, though, think carefully about (and take good notes on) a few things:

  • The cost of any office space, plus any costs associated with needed renovation.
  • Cost of telecommunications, utilities, cleaning services, trash removal, etc.
  • Is your address easy to find? Is it accessible to employees and clients?
    • Stay away from renting space that does not comply with ADA guidelines.
  • Is the space cost-effective for the long haul? Can you afford it in a downturn?
  • Is there adequate space for stock or inventory, if necessary, or will you need to find another solution? What will a storage locker or other storage solution cost?

6. How will you handle taxes?

Having a clear plan for how you’re going to manage and file business taxes each year — or every quarter, as required — is something you need to nail down before you open your doors.

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The great news is that nowadays there are websites that offer easy-to-use accounting software for taxes and finances at affordable prices. For example, you could start by checking out discounts offered by Intuit Quickbooks as a way to minimize hassle. Solutions such as this can make a lot of sense when accounting and taxation are not really “your thing.” Mistakes in this category have the potential to grind your business to a halt, so make sure you’re clear on what will work best.

7. How will you handle legal paperwork?

Perhaps these last two categories feel like a buzzkill, but there will be forms to fill out and legal requirements to meet before you can start your business.

For starters, you’ll need to register your business name, acquire a federal tax ID number, apply for any required permits and licenses, and take out business insurance. Even if you plan to pay someone else to take care of this stuff for you, you’ll want to familiarize yourself with city, state, and federal guidelines as a way of guarding yourself against future legal problems.

Paying attention to these seven issues before you roll out the red carpet will pay off in the long run. The trick is to know what you’re good at (and what you aren’t) and hire out the services you feel get in the way of your primary mission. Try to focus on doing what you do best.

About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.