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ShopTalk 800 - Your Connection to Small Business Specialists

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Shop Talk: Starting a Business

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Sunday, March 08, 2009

Getting Started

You should start a business that, based on the product/service, has a realistic chance to succeed in the marketplace. One way to evaluate a business venture is to develop a formal business plan which establishes the product/service, the market, production, pricing and financial projections. It is also important to have basic knowledge in accounting, marketing, advertising, legal and personnel areas. Even if you have to trust someone else for expertise in these areas, you need be knowledgeable enough to keep them honest.

Buying a Business

Any business opportunity should be investigated thoroughly for legitimacy. Research should include: disclosure about financial conditions, a list of people using the product/service, state of incorporation or legal business address, and contact the Better Business Bureau to see if any complaints have been filed against the business in question. Remember, if it sounds too good to be true, it probably is!

Developing a Business Plan

Every business should create a business plan which outlines and describes the business idea, management, anticipated results and route to be taken to accomplish the goals. It also helps you develop a structure and guidelines to stay on track with the original concept of the business. Your business plan should include the following segments: business history, management responsibilities, description of products and services, in-depth description of the market and customer base, production description and procedural methods and financial information about profit projections and cost data.

Buying a Franchise

Buying a franchise is often less risky than starting a business from the ground up since it is already established, but if you don't have the expertise required, your chances of success may still be low. If you consider buying a franchise, obtain a disclosure agreement listing financial conditions, requirements of the agreement, other franchisees, and other information that will allow you to investigate and evaluate the franchise before making any contractual agreement. Make sure you understand every aspect of the agreement and what the franchiser expects of you and what you can expect of the franchise.

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Comments 4

David Lance 06 Jun
I am going to open my own Insurance Agency. I will specialize in Health and Life insurance to start. Besides my license from the state what else would I need to get started?
DAN TODD 07 Dec
I need help with registering a federal trademark.
Gene Fairbrother 07 Dec

Hello David and thanks for your comment.

Not exactly sure if this might not be a duplication as the date of your comment is June 6 and I checked our history and responded to your question back in June ... but since it showed up again, I am happy to answer in case there was some sort of system glitch.

You mention that you are going to start and “insurance agency”, which commonly denotes that you might have other licensed agents operating out of your office and under your agency. If this is the case you will need to have a broker’s license to have other licensed agents selling insurance under your name with you participating in commissions. If you are going to be the sole agent operating out of your office you only need your insurance personal license.

If you plan to operate the agency under another name then your own personal name you will also have to file a fictitious name (DBA). This may be through your local county records office or your state business office depending on what your state requires. If you go to your state’s official website and check out the business section it will explain how to file your business name.

This should cover the “technical” aspect of your doing business. If there are other requirements specific to your state, the state website or your state insurance commission should be able to provide that information.

As for the functional aspects of getting your business going there are two key areas that you should create. The first is a good financial tracking program on your computer so you can keep track of your income and expenses and tax liabilities. Along with this, be sure to set-up a separate business checking account and don’t mix your personal and business finances together.

The second key area is for you to develop a basic business plan as to who your customers will be, how you are going to approach them, what your key marketing message will be, how you will be able to stand out from the competition, the value of your products and services, etc.

If you take care of these two primary key elements to your business you will be on a much stronger track then is you don’t do them.

Again, thanks for your comments ... Gene Fairbrother
Gene Fairbrother 11 Mar

Hello Mark ... Thank you for your question.

You could very well have issues by starting a business that provides similar products or services that your current employer provides, presuming you are an employee and not an independent contractor.

Companies generally have policies that restrict employees from conducting any type of business activity, either as an employee or freelance, that is in direct conflict with what they offer. To determine what your employer’s policy is look in your employee handbook, if you have one. This type of policy is generally outlined in this publication.

If your employer doesn’t provide an employee handbook you will need to ask them directly what the policy is. If there is an HR department they should be able to answer your question or you can go to the person you directly answer to.

Once you know what the company policy is, you will be able to determine what you can do and continue your employment or if there are restrictions that you don’t want to deal with you can decide if you want to leave the company and go out on your own. One other consideration for you to address is whether you have any form or non-compete or confidentiality agreement that you signed when you were employed.

Knowing the company policy on outside freelancing is the first step before you can make any decisions on what direction you want to go.

Again ... Thanks for your question.

Gene Fairbrother