About the Law
Business planning is crucial to all new commercial endeavors, home businesses, storefronts and larger operations. Unfortunately, bankruptcies and business failures continue to prevail in the ongoing sluggish economy. So, having a solid written business plan including a number of basic elements will increase the likelihood of survival.
Define the business List products or services, and where and how you will deliver them. I've observed folks struggle with a "mission statement," which is often an exercise in grammatical ping pong and interpretation of words.
This is not what you need. Clearly define for yourself and others what you will do.
Market research Is there a need for the service? Business planning evaluates the actual demand for the good or service you will provide in your location. Too often I've heard, "We thought it was a good idea." Not good enough.
Where will business come from? Are there computer searches for this product or service? Are there others from whom you can trade referrals?
Identify all potential business sources, such as others in similar, non-competitive endeavors. Introduce yourself and your plans. Determine if mutual referrals will help you both.
Marketing and advertising Without a plan to initiate new business, what's the point? Web marketing is crucial. This can be done relatively inexpensively if you talk to several different providers before making a commitment.
Having a pretty web page is less important than optimizing it and making your web presence easily available to potential customers. Don't overlook print. Some types of business benefit from distributing fliers at events attended by potential customers.
Be creative. But target your marketing. If you think marketing and advertising are dirty words, then having your own business is not for you.
Financing Shop around for low-cost loans. Consider that, in general, the first year you will lose money. With luck and planning. you may break even the second year and start to turn a profit the third.
Never cash in the 401K or other retirement to start a business. Four out of five new businesses fail. You and/or your loved ones will need your retirement.
Do not gamble with life savings. This is always a bad idea. Better that you seek loans that are affordable.
Entity creation is wise. Seek legal advice as to whether a limited liability company, a corporation or some other form of business entity is best for you.
If you neglect to correctly establish your entity, there are uniform partnership and limited liability company acts that may be imposed to resolve disputes. These "one size fits all" statutes may not be friendly when you get into trouble with partners or creditors.
Tax and accounting advice Yes, there is software to paddle the boat. But it's always wise to have a human advisor with whom you can have an actual conversation before making decisions.
Entire textbooks are devoted to this topic. My summary intends to get budding business owners thinking about basics in mapping business success.
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Andrew Myers of Derry has law offices in Derry and North Andover. He is a member of the American Association for Justice and the New Hampshire Trial Lawyers Association. Send questions to firstname.lastname@example.org.