Lexington With 318,449 People, Do you want to start your own business but not sure where to start?
It is never been easier than it is now. In fact, starting a home-based business in Lexington is one of the best ways for entrepreneurs like yourself to get started in today’s fast-paced world. This blog post will outline some of the benefits and provide an overview of how you can go about setting up your company so that you are ready for success from day one! Go Entrepreneur!
Lexington Business Outlook and Trends
For those of you who are thinking about starting a small business in Lexington, there is no better time than now. With the current state government’s pro-business initiatives and recent tax benefits for entrepreneurs, it has never been easier to start your own company.
Home-based Business Statistics and Trends
In the U.S., there are over 20 million home-based business owners, and the average annual income for a home-based business owner is $42,000! The number of home-based businesses has increased by more than 50% in the last decade.
More women have home-based businesses than men. 44% of home-based business owners spend less than $5,000 starting their businesses.
12 Steps to Starting a Home Business in Lexington
You might be able to make more money as a freelancer or consultant than you would at your current job. It’s possible to start a successful home side business while still maintaining your day job.
Home-based business owners are often more productive because they don’t have to commute. Plus, working from home can help you save money on gas and other expenses. And you’ll also save money on clothes since you won’t need to dress up every day. There is a lot of flexibility working from home, including time off for family obligations and other interests.
Step 1: Research Your Home Business Idea
All great businesses start with good ideas.
One of the best ways to get profitable business ideas is to review my lists of new business ideas such as small-town business ideas or home-based – lots of which are in your chosen industry and niche.
Another way to find your next startup business idea is to experiment with my fun tool – Business Idea Generator. Creative ideas are a great way to stimulate your entrepreneur’s brain and get your creative juices flowing. The button on this tool will provide you with new concepts for products, services, or side hustle businesses that can help do just that!
Test Your Business Idea
Now that you have researched your idea, it is time to test its viability. It’s important not to invest in an idea until we know for sure whether or not it will be profitable!
Serial entrepreneurs should always test their ideas before investing too much time and money.
As a serial entrepreneur, I have done tons of business idea testing. Some ideas passed, but lots failed. But I am sure glad that the ones who didn’t were only small investments while my newfound confidence in myself was more valuable than anything else!
Below are the best ways I have found to test new product ideas.
- Visit Trade Shows with Your New Products
- Ask Others for Constructive Feedback
- Run A Short Testing Ad Campaign
- Stage a Focus Group Session
Market Research – Your Business Ideas
All successful businesses MUST provide a service or product that is needed by the customer in order to thrive.
The adage, “The customer is always right,” has never been truer than in today’s economic climate. To thrive amidst the competition of cutthroat industries and an ever-changing market landscape, your business needs to be able to meet its customers’ demands
Find out if your new business idea will solve problems that customers are willing to pay for by thoroughly researching the marketplace.
Begin by asking the following questions to study the market, competition, location, and target customers’ needs and wants.
Learn if the Market NEED & WANTS Your New Product or Service
- What problem, need or desire is being solved by your product?
- Who are the people, or companies, that have this problem? Why do they have the problem? What are they trying to achieve?
- How are they answering this problem now, without your new startup? What products and services are they using?
- What are other companies offering for this need – similar or dissimilar products to your business ideas?
- Where does your new firm fit into the marketplace?
- What is your point of difference, competitive edge, over established companies? Why should people buy your product instead of what they are using now?
Step 2: Name Your Home Business
How to Name Your New Business?
How to Name Your Business so Customers Remember Your Brand? A company’s name is one of the most important parts of a business but picking out an appropriate and catchy company name can be tough. Here are my best tips for coming up with names that will stick in people’s minds!
Make a List of Keywords
The words and phrases that your prospective customers type into internet search engines to find companies like yours. Add other towns, states, and countries to your search to find similar firms, outside of your marketing area for inspiration.
Don’t use another firm’s exact name, just use those names to brainstorm your own unique brand name.
- Use market level words such as industry names (ie catering, plumbing) and see what comes up
- Brainstorm a list of related keywords (example for Bakery – sugar, sweet, dough, icing, fluffy, etc)
- Try your competitive advantage term (ie faster, cheaper, cooler, closer) to find interesting concepts
- Your value proposition, innovation, or special feature is a good source to build memorable names (example – Evernote – Remember Everything)
- Outside of Your Industry – Step back and look for an interesting combination of words from outside the industry such as Apple (a fruit) for electronics.
Play with Words for a Great Brand Name
It can be difficult to think up a catchy name for your brand-new business venture. Here are my best tips on coming up with company names that will get people talking about how amazing your products are:
Take that list of keywords and you created using my tips above and then play around until you find that perfect new startup name.
Combine Two Words – Blend real names of two or more owners into an interesting compound business name.
Acronyms – An acronym is different from a name made up of initials and creates a new word. An example of an acronym name is LEGO (short for Leg Godt – danish for “play well”) pronounced as one word.
Use this online tool to brainstorm some creative acronym business names.
Wordplay and Puns – Puns are jokes that exploit the different meanings of words – a play on words. They can make funny and catchy business names.
Some examples of business name puns; Cake my Day, Live Free or Pie, and Food Mood. Have fun and get business name inspiration with this free Pun Generator tool.
Get Inspired with List of Business Names
To help inspire you I have written lists of catchy business names for lots of types of companies and different industries. Check out these unique business name ideas that are not taken and available!
To check to see if your business name is available in Lexington, you should first do a business name search, a domain name search, and a federal trademark search. Here’s how
How to Register Your Business Name in Kentucky State?
If you want to form a Kentucky State business, requirements vary depending on your legal structure. Sole proprietorships and partnerships operate on the same level as LLCs in terms of name registration requirements, but these corporation business types have their own set of rules to abide by in Lexington.
1- Search Lexington Business Entity Availability
Begin by searching the Lexington Business Name Database. If you file for an identical business name as someone else, your request will be denied. For a business name to be possible for registration, it must be both unique and available.
2- Search Trademark Records
Next, search the U.S. Patent and Trademark Office database here to find out if another person has already trademarked your desired business name.
3- File an Assumed Name in Lexington – File a DBA in NY
Filing an assumed name in Lexington, also known as a DBA name, allows your existing or future business to conduct business using a new name other than its legal business name. That is helpful as you establish your brand name or if you want to change the name of a business without having to file an amendment with the State.
Kentucky State law requires all partnerships to register a business certificate with the appropriate county clerk’s office.
NOTE: The use of the following words and phrases are restricted or prohibited by statute* in the name of a Business Corporation (“BC”), Not-for Profit Corporation (“N-PC”), Limited Liability Company (“LLC”) and/or Limited Partnership (“LP”), such as bank, cooperative, etc. Here is the full list of prohibited words for business names in Kentucky State
Fees: The fee for filing a Certificate of Assumed Name in Kentucky State is $25 plus any associated county fees.
This certificate must be typed or printed out in black ink. It must also have clear signatures so that the Department of State can reproduce it legibly.
4- Domain Name Availability
I recommend that before calling a web developer to build your site, check if your business name is available as a domain. So, be sure you check to see whether the desired URL is already registered. It’s not in use by another firm.
You have to buy the domain name of your business website before someone else does!
Step 3: Meet Your Lexington Legal Requirements: Government Registration, Licenses & Taxes
Choose Your Business Structure
Before starting a new business, entrepreneurs should make sure they’re following all the legal regulations of starting and operating a small company. It’s important to stay on top of government paperwork as well as taxes in order to avoid any setbacks or penalties later down the line.
Next, we will cover the legal requirements for business registration with your State and tax regulations. There are IRS rules to take into consideration as well when you’re starting a new venture that needs to be determined before getting the right business licenses or permits in place.
Establishing legal compliance with your new company will allow you to focus on growing the business.
Legal Business Entity Types – Explained
Your business is considered an entity or an organization in the eyes of the law and government, this means that you need to have a structure such as Sole Proprietor DBA, Corporation, LLC a limited liability company in which you run your business from.
The entity you choose to operate your business will dictate the legal protection afforded to it, which in turn dictates how much personal liability you face.
Here is how to determine the best legal structure for your new startup business such as sole proprietorship, partnerships, corporations, or trusts.
There are many types and variations to business structure. Depending on which kind of business you intend to run, how the day-to-day operations will be carried out, and various other factors, a particular business structure may be of more value to you than another.
Legal Business Formation Entity Types
- Sole Proprietor
- DBA – Doing Business As
- S Corporation
- Limited Liability Company (LLC)
- Non-Profit (Not for Profit) Corporation
A sole proprietorship is the business formation most adopted by individuals. It is also the form of business that carries the most liability for the owner—a single owner, personally responsible for the sole proprietorship.
For sole proprietors to be legally allowed by law, they can either use their legal personal name or take the optional route of obtaining permission from local authorities first in order for a DBA.
A sole proprietorship is a legal structure like LLC or Corporation, and a DBA isn’t. A DBA means you can operate your business with a trading name different from your registered, legally registered personal name.
DBA – Doing Business As
The “doing business as” or DBA is a legal requirement for businesses operating under different names than their legal name.
In order to operate legally, you need to register with the proper state agency and file an assumed name certificate that states who owns your company. The only time this may not be required is if both owners are using their actual last name on any products they sell – in which case no one needs approval from anyone else!
Sole proprietorships and general partnerships are legally required to file DBAs, but almost any business entity type could benefit from having one. This is because a DBA can serve as an important form of protection when conducting business; for example, if someone becomes liable for damages that occurred during the course of their company’s operations, they may be able to claim that liability was due solely to personal actions or decisions which were not related in any way with the corporation.
A business partnership is a legal relationship that can be formed by any written agreement between two or more individuals.
The partners and investors invest their money in the business, with each partner benefiting from any profits, taking responsibility for losses sustained.
One of the best ways to do start a business is with a partnership. It can reduce costs and help you reach your financial goals faster. The advantages of this are that it builds trust among the partners, and allows them to handle tasks more efficiently while sharing in profits.
Limited Liability Company (LLC)
A popular form of business structure is the limited liability company referred to as an LLC. Each state has its regulations regarding the LLC, to clarify how it differs from the other previously mentioned business formation types, let’s start by defining the LLC.
An LLC can be thought of as a hybrid structure. It is sort of a mix between a corporation and a partnership. One might think of it as a partnership that insulates the owner’s liability to some limited degree but is similar to the corporation’s structure.
Some businesses should incorporate, most notably those seeking venture capital and manufacturers. Other firms should not incorporate such as small one-person companies, often referred to as solopreneurs and those with low capital do not deal in products or services that could be dangerous to your customers.
Next, we will discuss incorporation as a business entity and the different types of corporations’ options.
An S Corporation differs from a regular corporation in that it chooses to pass credits, deductions, income, and losses through to the shareholders. These shareholders would add these to their income tax. It enables the business to simply pass along the numbers to the owners (shareholders) and act as intermediaries.
A corporation is a quite different creature from a sole proprietorship. In the United States, a corporation is a sort of virtual entity. A corporation takes on rights and abilities like a person – that’s why it uses the word “corp” as in the corporal body. The difference is that it features the ability to exist perpetually, quickly transfer interests, and provide limited liability for the corporation’s shareholders (owners).
Read my advice about whether a corporation would be a good legal business entity for you linked below:
Non Profit Corporation (Not for Profit)
A nonprofit organization is one that meets the IRS requirements for tax-exempt status because they provide a public benefit and have social missions. Nonprofit organizations include hospitals, universities, national charities, and charitable foundations that give back to the community for the common good.
Nonprofits must serve the public good in some way. They do not distribute profit to anything other than advancing their own organization’s efforts for an even better future–one of which will be more abundant and prosperous.
Nonprofit organizations exist solely as tools with one goal: to provide a meaningful service or product that benefits society at large while also benefiting themselves by providing them with opportunities such as personal development, education, networking, etc., all aimed towards creating a world without poverty.
A not-for-profit organization is one that does not earn profit for its owners. All money earned through pursuing business activities or donations goes right back into running the charity.
Not-for-profits are not required to operate for the benefit of the public good according to law. A not-for-profit can simply serve its own goals without benefiting anyone else’s interests, this is often done by ‘selfless’ people who don’t want any compensation whatsoever and believe they’re doing what’s best in their communities
When a business becomes a partner, it should register with all states where the partnership does business to be in compliance.
If you are interested in setting up a non-profit, or not-for-profit, check out my expert tips here.
Register Your Business with Government and IRS
Get Your Federal and State Tax IDs Number, The State where your business headquarters are located AND your chosen business structure determine how you will need to register your business.
While not every business must be registered with the government, I recommend that you do so to take advantage of the legal and tax benefits – plus get personal liability protection from business debts and lawsuits.
Once you properly register your company you will be issued an employer identification number or EIN for short. You need this number – even if you are working alone, self-employed, or hiring only subcontractors and no employees.
An EIN number is the business equivalent of your personal social security number and is used in various steps like opening up an account at a bank or paying taxes. Not all states require that you get one, but it might be worth getting if there’ll likely be more tax-related things coming ahead of time.
Registering your business with state and local governments is usually as simple as registering your company name. Here’s how to do register our business in your state:
Apply for Your Business Licenses and Permits
You are responsible for making sure your business has the proper federal, state, and local licenses and permits to operate legally. A pivotal part of this process for many entrepreneurs is determining what type of licensing they’ll need. Here are two ways to research which business licenses and permits you will need in your State and for your specific industry startup:
- FREE online business license lookup tool
- Low-cost business license research service
Online Business Lookup Tool
Business licensing is something that people often overlook when setting out on the entrepreneurial path–particularly those who have never started any kind of company before.
Protect Your Company’s Intellectual Property Assets
If your new business develops new inventions, manufacturing processes or products you will want to protect your intellectual property with patents, trademarks, and copyrights issued by the US patent and trademark office.
Home Business: License, Insurance, Tax & Zoning Laws
Houses and apartments were built for residences and not for business purposes. As such, when you are using residential properties for commercial purposes you will need to make certain adjustments.
Operating a business out of your home will require serious consideration of these critical criteria:
Check with your insurance broker to see what provisions are included in your homeowners’ policy to protect you against losses from your home business activities. Common losses include inventory theft, property damage, and fire from commercial tools and equipment. You may need to increase your insurance coverage or purchase a separate policy to protect your business assets and personal property.
Consider increasing the security of your home to protect against theft of either the physical or digital assets of your new business. Often this means the installation of an alarm system with monitoring services to protect your physical goods and also computer security software to safeguard your digital material.
Your personal and family privacy is an important consideration when launching a business from home. How will you manage your family schedule, client visits, and employee work schedule? Do some brainstorming and discuss with your family to get their support before launching your business from your family’s home.
Businesses often require more powerful utility systems than those in traditional homes. So, depending upon the type of company you are launching, you may need to upgrade your electrical, water, and sewage systems to accommodate increased usage.
If your business is an online firm, you should invest in professional-grade battery backup systems to protect your electrical supply during outages. Some home business owners invest in generators to ensure an uninterrupted power supply.
Also, internet-based firms will need to upgrade their Internet service and install an automatic cloud-based backup system for their computer files.
Zoning Property Use Laws
Contact your local zoning board to determine the regulations of your town for home businesses. My town, which is a suburban city, allows for home businesses that do not negatively impact my neighbors or the local community. This means that home businesses that create excess trucking, foot traffic, vehicle parking, noise, or waste are prohibited.
Your town may have more specific rules about the number of additional vehicles parked on your property or the street, the number of visitors, open hours, and lighting regulations. My town also allows the selling of food products produced on my property. Items such as eggs, vegetables, and firewood are permissible to sell in front of my house. Every state has different cottage food laws. Get more info here to search your state’s cottage food laws.
Seemingly no house ever has enough storage, and if you plan to start a business out of your home, you will need to increase your storage space. Either this means emptying closets or repurchasing certain rooms or the garage for your business activities. Some entrepreneurs have set up shops in outside sheds or storage units. Evaluate your storage needs and make appropriate accommodations to house your new home business.
Most home businesses face the same tax laws as businesses located in commercial warehouses or retail spaces. Your income tax is based primarily on the type of business entity you set up (a sole proprietor, LLC, or corporation) and the state in which you reside.
The sales tax you are required to collect from your customers is calculated based on the type of product you are selling and the county or city where you are headquartered.
Don’t be misled and think that you are no longer responsible for collecting sales tax because you are selling products from your home. This can be incredibly confusing when it comes to selling items online, either directly to consumers from your own online stores or through online marketplaces such as Etsy or eBay. Here is information on how to calculate and collect the sales tax required when selling goods online.
I also highly recommend you speak to your accountant about your situation to be sure you comply and don’t get any costly tax surprises. Also, he can advise you on the many tax deductions and credits home-based entrepreneurs can claim on their personal tax returns such as these.
Most municipalities do not require a specific home business license. Most state licensing requirements are based on industries, not the property type of your business headquarters.
Regardless of whether you are starting your business at home or in a commercial location, you will need to get the proper licenses for your industry and product type – find out what business licenses and permits you need here
How to Start an LLC in Kentucky State
Want to form an LLC in Lexington? Here is a list of forms you’ll need, fees, and other important information about the process.
Before deciding to form an LLC, you must understand what an LLC is and a viable business structure for your company. An LLC is a business structure offering limited liability to its members. Members of an LLC may include individuals, corporations, other LLCs, and foreign entities
Filing an LLC in Lexington: Forms and Fees
When it comes to starting an LLC, Lexington is a great place to start because the process becomes easy as long as you follow these simple steps. The forms and fees required are listed below:
Begin by completing the form DOS-1336 titled Articles of Organization – DOWNLOAD HERE.
Complete form with the following information for your new business:
- Lexington address for members to be contacted if legal actions, such as lawsuits, are filed against the company.
- LLC member signatures
- LLC name that meets Kentucky State requirements – READ about LLC name regulations here.
Fees to Form LLC in Lexington
Submitting the Articles of Organization online costs about $200 and takes 15 days, and the Certificate of Publication requires a $50 fee.
Check with the Lexington Department of State for the latest filing fees – HERE.
Limited liability company operating agreement
To make your filing process legal, have your Articles of Organization, ready within 90 days.
Certificate of publication
The Certificate of Publication needs to be filed with the Department of State within a 120-day window following filing the DOS-1336.
Step 4: Write Your Home Business Plan
No doubt you’ve heard the old saying of one of my heroes Winston Churchill, “if you don’t plan – you are planning to fail”.
Nowhere is this truer than when starting a business.
Starting a business without any planning is one of the most common mistakes entrepreneurs make. Spare yourself the substantial loss of money, time, and much heartache by taking the time to write a business plan. A well-written business plan is one way you can invest in your future success!
The importance of writing the plan is not entirely in its finished product, but what you discover about your business as you prepare it. During the process of writing your business plan, you will uncover aspects of your business strategy that will not work.
Far better for your startup success and survival that you discover these weaknesses on paper – NOW – then adjust your business model accordingly- than to encounter these problems in your company costing time, money – and quite possibility your company survival.
Think of your business plan as a map for your entrepreneurial journey. You would not set out on a long hike across unknown territory without a field guide and a detailed map.
So, don’t dive into a new business and spend money, time, and emotional energy without a map – your business plan.
Your business plan must answer these 9 critical questions:
- What is the purpose of your business?
- Who are your target customers?
- What are the benefits of doing business with you?
- How do you plan to reach these customers?
- Where will your company be located and what type of facilities will it need?
- What kind of employees will you need, and how many people should work for your company at first?
- Do you have any competitors in this market space, and if so, who are they and what differentiates them from each other and from yourself?
- What does success look like for this business in one year, five years, and ten years from now?
- What are the most important tasks that need to be completed before launching a new product or service?
Step 5: Calculate Your Finances and Fund Your Home Business
This is an important stage where you will calculate financial projections to determine if your business idea is profitable and determine your pricing strategy. Also, you will need to ascertain the amount of capital you will need for both your startup costs and ongoing working capital.
Calculate Your Startup Costs
Two Types of Startup Costs – Setup and Operational
First, you need to know that there are two distinct types of costs, those you will incur as you set up your company (Set up Costs or Startup Costs) and those that will continue to be expensed as you operate (Operational Costs, Expenses, and Working Capital).
One-time investment to open your store or launch your website includes such items as legal business formation, building renovations, and manufacturing equipment.
These are easier to calculate. You will research each item and simply add up the list for your total set up costs.
Ongoing expenses to continue business operations including rent, supplies, employee salaries – and most importantly working capital. These costs are more difficult to calculate because they have many more variables. As your sales increase so will your labor and material and inventory needs.
Forecast Sales & Expenses
The next step is to forecast your sales and expenses and generate a business budget.
I have a that I say that is funny but also true. I tell all new entrepreneurs to take their financial projections and cut their sales in half and double their expenses.
Then, if the numbers show that they will make money they should go forward to launch their business. Certainly, simplistic, but it illustrates that most entrepreneurs overestimate their sales and underestimate their expenses to their own detriment.
Here is the right way to create a business budget.
Define Working Capital Requirements
From one entrepreneur to another, you need to get wise about working capital, today, if you plan to keep your business doors open. Because the #1 reason for business failure is lack of working capital. Don’t become a business failure statistic.
Working capital refers to the funds that help you meet the daily expenses and needs of running your business, such as payroll or paying for software, tools, and supplies.
From a business management perspective here’s all that you need to know about working capital in my article about what it is, the amount you need, how to manage it like a pro, and if you are short on working capital how to either get financing and how to reduce your working capital needs without a loan.
Determine Your Prices
Begin your financial planning by determining your best pricing. Pricing your product and service is a bit of art-science. There are multiple ways to determine your best price, cost plus, and market demand & supply.
There are different methods to calculate your prices for your new startup business based on multiple factors such as market demand, competitive prices, and costs expenses.
These are the most often used pricing strategies for small businesses with recommendations for which methods fit different types of businesses.
This method is when you price your product higher than your competitors. This technique is often used at product launches to create a high-value perception in your customer’s minds.
Market Penetration Pricing
This concept is to gain buyers by offering the lowest prices on goods and services to enter a crowded marketplace. It is common for entrepreneurs to use this technique initially. If not planned and executed carefully this is the most dangerous type of pricing strategy for your bottom line and business survival.
By utilizing the power of people’s emotions to buy is the key to success with this pricing strategy. Many consumers consider the price of a particular item a major purchasing factor. Use this to your advantage by reducing your price a little and changing your buyer’s minds a lot. You have all seen the $199 specials, which are only $1 less than two hundred but seem to be a better bargain.
Fund Your Business
Now that you have a great business idea, you will need money to get started in your new venture.
While there are some businesses that you can start with almost no money some are even free. Most startups require some form of a business loan or capital investment.
Startup Funding Resource List
Here are some good ways to fund your startup launch. Personal savings
- Loans – Personal and business
- Credit Cards (Read my entrepreneur tips here first)
- Partners & Investors
- SBA Loans
- Small business grants
- Product Licensing
TIPS: If you need to finance your small business consider top recommendation for small business startup loans – Kabbage.com.
Step 6: Pick Your Business Location in Lexington
Choosing the right location for your firm is one of the most important decisions you will make at the onset of your business launch.
Take your time and do your homework of research and planning, before committing to a lease on retail, restaurant, or office space. Study the demographics of the area and surrounding towns, your competition nearby, and much more. Here are the questions you need to ask before signing a lease:
7 Questions to Determine if Location is Good for your Business
- Image – Does this spot project the brand image you desire?
- Competition – Are neighboring businesses competition or complementary?
- Labor – Will you be able to find employees easily, or is it too far to commute?
- Growth – Is there room for future expansions?
- Vendors – Are vendors able to deliver here efficiently and at a reasonable cost?
- Security – What is the crime rate?
- Zoning – Is this location zoned for your type of business activity?
Step 7: Buy an Home Business Insurance Policy
Get Business Insurance Policy
Running a business is risky. Injury, natural disaster, or lawsuit can force you out of business and leave your family without income! Business insurance protects against these unforeseen risks to keep things running smoothly so the company doesn’t have to close its doors due to an accident or major incident.
Think about it. If your business gets sued, you will lose money that could have easily been prevented by purchasing the right insurance policy!
Insurance Regulations: Federal IRS, State, and City
The protections you get from choosing a business structure like an LLC or corporation typically only protect your personal property and even that protection is limited.
In today’s world, it is impossible to protect everything. Even with the most comprehensive coverage in place, there are still many gaps that can leave your business exposed if you don’t have adequate insurance protection for both personal and business assets as well!
There are a number of aspects to consider when determining the right type and level of business insurance. For example, you will need different coverage if your company employs other people than just yourself or is within certain industries.
The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance; however, there are many additional types available depending on factors such as industry size among others which make it difficult for employers who want their employees protected against all potential risks from liability exposure that could arise from something they do at work like slip-and-fall accidents or even injury caused by faulty equipment in an industrial setting.
To navigate the complex world of business insurance needs I recommend the Coverwallet easy-to-use tool here that will quickly tell you exactly what insurance policies you need and provide competitive price quotes from top insurers.
Step 8: Open a Business Bank Account
To accept customer payments, cash, checks, or credit cards, your business will require a separate bank account from your personal or family bank accounts.
Please do not make the beginner entrepreneur run your business through your personal account. You will be making it harder on yourself since it will be tougher to manage transactions, reconcile checking accounts and prepare your tax returns.
All small business experts and the Internal Revenue Service recommend the separation of business and personal bank accounts. By opening a business account, you make this possible.
Additionally, having a business bank account is an important credibility factor to make your business idea a legit company and not just a dream. Also, for corporations, LLC’s and so forth, a separate and individual bank account will be necessary.
Depending on the bank and type of account required, several business days may be needed to get things set up, so don’t wait until the last minute to get things set up.
Set Up Your Accounting Software System
Whether you’re starting a sole proprietorship or an LLC, having the proper accounting setup is essential. It is far better to have your bookkeeping established right from the start rather than find out down the road that you’ve done things wrong and now owe money to the IRS.
I learned this the hard way in one of my early ventures. Start bookkeeping with your second dollar – the first dollar you put in a frame over the door or on your desk.
Depending on the particular business formation type you have chosen, there may be reporting requirements for the accounting, especially payroll and taxes, that require regular and ongoing attention. Consult the IRS for your tax payment and reporting schedule.
I recommend the easy to use, but flexible enough for growing companies, software Freshbooks. From sending email invoices, accepting credit cards, and tracking expenses – it is simple, effective, and affordable. Check out the discount sale here.
Step 9: Build Your Team
Unless the business is completely automated, personnel (employees, freelance, or subcontractors) will likely be required. After all, it’s good old-fashioned hard work that built American business. And it will continue to be the labor of people that make businesses s\\ucceed.
In the case of hiring staff, there will be certain legal considerations that must be taken into account.
- Staff hierarchy – Are management in place? Who runs the various business operations?
- Deductions & taxes – Accounts with the IRS setup? Software or accounting in place for payroll?
- Health care and benefits – Are your staff protected?
- Working conditions – Does the working environment comply with all state regulations?
Use this new hire checklist from the experts at Fresh books
Step 10: Select Your Vendors
Choosing the right supplier for your business is vital. If your supplier isn’t reliable or doesn’t provide high-quality products, your company will struggle to deliver well-priced goods and services that meet your customers’ expectations.
So how do you choose the right supplier? Review these criteria to select the best possible suppliers for your products, components, or raw materials.
- Lead time
- Delivery Schedule
- Shipping Fees
- Minimum order quantity
- Dropshipping capabilities
- Quality assurance methods
- Payment terms
- Credit line accounts
- Return policy
- Communication standards
Negotiate Lower Supplier Prices
Negotiating is a crucial skill for any business person. In many cases, you are the only one in your company who can negotiate with suppliers and vendors on price.
Here are tips on how to negotiate lower material and inventory prices from your suppliers and vendors. Remember every dollar you save on your supply bill is another dollar of profit!
- Negotiate with suppliers and vendors to lower material and inventory prices – don’t accept the list price
- Know the market price for materials, products, or services – do some research before contacting vendors
- Research other companies that offer similar goods or services in your industry
- Find out what competitors are paying for materials and inventory
- Ask about volume discounts if you buy a lot of materials from one supplier – BUT do not overbuy because startup companies need to avoid tying up a large amount of capital in materials.
- Know what your bottom line is before negotiating and don’t be afraid to ask for it
- Be prepared to walk away from a deal if you can’t get the price you want
Step 11: Create Your Brand and Advertise
Branding Your Business
Branding your business involves more than just naming the company. It also involves having a custom-designed logo, a signature font, unique company colors, and even a slogan for your business. Here’s how to use branding to make your products and company memorable.
Get Your Perfect Logo Design
Can you think of a major business without a logo? Bet you can’t!
That’s because major brands are built on the foundation of strong logos, the single most important visual element of branding.
So, you know that you need a standout logo for your company. But how to create one?
Publish Your Company Website
Take your reputation online and build a company website.
Your prospective customers are increasingly turning to the internet for answers but not everyone goes through the necessary steps of getting online for their company. Get a competitive advantage and start your website early in your launch.
Websites are a fantastic way to interact with current and potential customers. They offer the customer easier ways to reach out, make an inquiry, or simply get your name out there.
Set Up Social Media Profiles
You may not have the cash to launch your new business, but you can still make a name for yourself with social media. Use it as an outlet to tell people about what’s coming and offer coupons when that time comes!
Depending on your target audience, certain social media platforms will be more beneficial than others. Check out this report of the most popular social media platforms and user demographics . Match your target customer with the site they frequent most and focus your efforts there first.
Reserve your company name on the best social media sites instantly at Knowem for one low price.
Advertising Your Products
Advertising comes in many forms, from billboards to a website to a storefront sign. In the good old days, there was a focus on flyers, and today it’s social media. Regardless of the method, getting your business name out is essential to growing your client base.
Defining a solid strategy for advertising and setting an advertising budget is a significant step for any business. Here are some low-cost advertising ideas to get you started:
- Advertise on social media platforms like Facebook and Twitter
- Get your business listed in the phone book or online directories
- Ask for referrals from friends, family, and acquaintances
- Write a catchy slogan that will catch people’s attention when they see it or hear it in passing
- Create a Facebook page for your company and post content related to your business
- Use Google Adwords to advertise on other websites
- Write an article about your business and submit it to relevant blogs or magazines
- Design flyers that are eye-catching, informative, and easy to read
- Print business cards printed and hand them out to potential customers
- Advertise on social media sites like Facebook, Twitter, or Instagram
- Put up flyers around town with your contact information
- Place ads in local newspapers – display or classified service directory
- Send direct mail to potential customers with coupons
- Start an email newsletter campaign with the goal of building relationships with current and future customers
- Promote your products or services on sites like Craigslist, Facebook Marketplace, or eBay
- Add your website to search engines and directories
- Consider using YouTube informational videos as marketing tools
- Create flyers to post on bulletin boards and give to people you meet at events
- Start an industry blog and post regularly
- Use Google My Business to create an online business profile with photos, location, hours of operation, etc.
- Make sure your website is mobile-friendly and has contact information
Grand Opening Events
If you are launching a new retail store or restaurant, go ahead and have a grand opening event and invite the media to get the buzz going and generate powerful word-of-mouth advertising.
Step 12: Promote Your Lexington Business
After launching your business, it can be hard to know what to do next. If you are a small business owner who is looking for advice on how to grow their company, we have some tips that will help get you started! Here are five ways that you can grow your startup after launch:
1) Introduce new products and services
One of the best ways to grow your company is by introducing new products and services that will diversify how you offer value. For example, if a business creates coffee mugs with their logo on them they can introduce travel cups or t-shirts as well for customers who are looking for more than just one item. New products breathe new life into companies and give you opportunities to contact customers and promote your entire line.
If you are looking for new product ideas, try talking to your customers and seeing what they think would be valuable. You can also ask potential clients about their needs before presenting a solution which helps make sure that the products or services introduced will meet customer expectations in order to create loyal fans who come back time after again!
2) Collaborate with other companies for joint ventures
Join forces with other companies who have a similar goal in order to get the word out about your company and product. For example, if you are an office supply store then contact local stationery stores who specialize in paper or ink pens so that they can promote their products as well at trade shows together on one table with information for both companies’ customers available side by side!
3) Get involved in trade shows or conferences
Trade shows are excellent places to meet new customers and old customers who have not visited the company in a while! A good trade show for your small business might be one that specializes specifically in what you offer.
Make sure to bring plenty of promotional materials and enough staff members so everyone can answer any questions or concerns immediately
Business partnerships can be found at industry conferences too! Networking is essential to the success of a startup. Attend relevant conferences and introduce yourself as an entrepreneur with new ideas! Networking can be done online through social media, but it will have more impact if you meet face-to-face at industry events or trade shows that are catered specifically for your niche market
4) Expand into new markets
Increase your marketplace by shipping your goods internationally or expand your service area to new cities or states.
If this sounds like an option for growth that would benefit both parties then consider partnering with another company outside of your area in order to share distribution and marketing costs.
5) Run contests and sweepstakes
Promotional contests are a great way for companies to increase the visibility and awareness of their brand. The purpose is typically engagement, loyalty, or sales promotion rather than a marketing campaign with the sole aim being lead generation (though contests can be used in this way).
The best way to use sweepstakes is to tie it into a promotion. For example, you could offer discounts for the first 20 customers who ordered your product after following two simple steps on social media or fill out and submit an entry form from our website is fine too!
Now you know, that it’s not easy starting a new business, but it is possible. With the right knowledge and skills, you can start your own home-based business in Lexington. Good luck my entrepreneurial friend.