Week 3: Keep the momentum going
Now you’ve made progress, you can’t stop. You have to keep going. Continue working through the next steps. In this week, you’re going to look into insurance, creating your online presence, and figuring out whether or not you need to hire employees.
Day 15: Figure out how you’re going to get paid
Did you know that one of the primary reasons people go out of business is not because they’re not profitable? It’s because they don’t have cash on hand to pay bills, to pay employees and to continue operating.
This is especially true for those people running a service business that invoices clients. Sometimes payments can take up to 90 days to come through! With enough clients that pay late, you could easily run out of cash.
For this reason, it’s a good idea to establish your credit policy in the beginning, even if you’re worried that a lack of leniency will push customers away. Running out of cash will do that even faster.
With a credit policy you can:
- Avoid bad debts and bad feelings
- Standardize credit procedures, providing employees with clear and consistent directions
- Demonstrate to employees and customers that the company is serious about managing credit
- Help the business owner define how credit fits into the overall sales and marketing plan
When deciding on a credit policy, get an idea of your customers payment cycles. For some it’s 30 days, for others it’s 45 or 60.
If you’re worried about whether or not someone can pay, consider asking for cash-in-hand, or for part of the payment upfront. This is a good safeguard against new customers or new businesses.
If you do decide to offer credit, take a proactive approach to getting paid. Call your customers a week or more before their invoice is due and ask them if they’re satisfied or if they anticipate any problems paying.
If payments are still late, you need to be strict. Stick to the policy you’ve decided on. Penalties and late fees are possibilities. If you’d prefer to go down a positive reinforcement route, you could offer discounts for timely or early payments.
Whatever you do, make sure the payment deadline is clear.
Other types of payment you can consider (and that each have pros and cons) include:
- Cash
- Checks
- Credit Cards
- Debit Cards
- Online payment via sites like Paypal, Google Wallet, etc.
Day 16: Cover your assets and get insurance
The biggest mistake you can make as a new business is thinking you don’t need insurance. Apart from covering your own assets in the case of a fire or a burglary in the building, you will also need insurance against the loss of a key employee due to illness or an accident on the job.
It’s also worth checking in with your local business development center, to find out what your state requires in terms of insurance, when they require it, and what the minimum amount required is.
Types of insurance you’ll want to consider purchasing include:
- Workers Compensation Insurance
- General Liability Insurance
- Auto Insurance
- Property Insurance
Other types of insurance you can purchase later, or that might be required by certain banks if you’re borrowing money include:
- Life Insurance
- Business Interruption Coverage
- Disability or Income Insurance
Many insurance companies will offer “package deals” on insurance so if it’s all feeling like a bit too much, perhaps start with a package.
You can get quotes for business insurance from the following sites:
- InsuranceFinder
- Business Insurance Now
Day 17: Work out whether or not you need to hire employees
If yes, put up the ads and if you can, at this stage, begin the interviewing/hiring process.
Figuring this out early is a good idea. Not only will it dictate the type of insurance you need to buy (workers compensation will be necessary if you do hire), but the presence of an employee could make your initial costs much greater, or help you achieve your goals faster.
Do you really have the ability to do everything on your own at the start? If you need to hire someone with specific qualifications or training, outline what that person will do and what the role will require.
This should also help you when it comes time to draft the job description and to write an ad that will appeal to your target employee.
Places you can turn to recruit include:
- Friends and family—tap into your personal network and ask if there’s anyone they can recommend
- Check in with local colleges and schools
- Use an employment agency (if you’re tight on time, they can really help a lot with the initial screening)
- Turn to industry publications and websites, particularly if you’re looking for someone with training and a very specific skillset
- List your opening at a job bank related to your industry
- List your opening online
As you invite people in for interviews, remember to become familiar with Equal Employment Opportunity Commission guidelines so that you know what types of questions you can and can’t ask.
Be careful to look at references as well, especially if the person you’ve hired is going to be driving a company vehicle or handling large sums of money.
Day 18: Brand your business
Before you can advertise your business or set up your website, you’ve got to think of how you’re going to brand your business.
That is, you’ve got to figure out what the “personality” behind your business is. Not only will this help to differentiate you from the competition, but it will clarify your message, create value, and be a key element of your marketing. Your brand will help decide your pricing, the employees you hire, the customers you target, and the PR you do.
The best way to figure out how to brand your business is to learn from others. Look at what they’re doing. Do a lot of research, particularly on those in your industry.
A few good sites to look for branding advice on include:
- Adweek
- Duct Tape Marketing
- Brand Strategy Insider
- Brand New
- iMedia Connection
- Small Business Branding
- Ries’ Pieces on the Business of Branding
- For B2B companies: Branding Business
Day 19 and 20: Establish an online presence
Even if you’re not a digital business, your online presence is important. In fact, not having one today is almost unheard of. Even if you’re not taking business online, you should make it easy for people to find you.
The biggest mistake you can make is thinking that you do not exist online if you have not created your brand presence. People will review you, people will talk about you on social media sites, and people will write about you. If you’re not staying on top of these areas, you are not controlling the conversation.
I’ve suggested you allocate two days to this step simply because I know how much time it can take to get set up.
A few things you might think of doing very early on include:
- Creating a basic website (you may need to do this yourself—in which case you’ll also need to look into getting your own hosting/online space—or have someone do it for you). Bluehost is our preferred hosting company and they’re ideal for most small business owners.
- Creating a Google Local listing so that you’re literally on the map.
- Registering with or listing your business on online directories like Yelp or whatever else is relevant to your industry. A Google search should help you figure this out. Try searching for your competitors as well to see where they’ve listed their business.
- Setting up profiles on social media websites.
Spend some time also thinking about how you’re going to manage your online presence going forward. Your website will be a marketing tool, regardless of whether or not it’s used simply to convey information, or to build your brand.
Day 21: Advertise
Advertising and promoting your business will be something that you actually have to do long-term. However, as you’re just getting started and likely only have a few customers, it will be most important at the beginning.
There are a number of things you can do to advertise:
- Hire a PR firm
- Place an ad in a newspaper or get a radio spot
- Order and distribute leaflets
- Speak with journalists
- If your online presence or website is important, you should consider Google Adwords
- Do your own outreach; get in touch with writers online to see if they’ll be interested in sharing your story. A good and free site to help you get a bit of early publicity is HARO.
- Network at local events and at meetups you find on sites like Meetup or Eventbrite
- Have a grand opening
- Sponsor something
- Run a contest
The key is to do something. Don’t wait for others to find out about you. Get out there and tell them about your business and how it can help them fulfill a need or solve a problem.