Taking Care Of Legalities And Other Pre-Opening Business Matters

Discuss starting your business with experts—your lawyer, accountant, bookkeeper, insurance agent, business consultant, and financial advisor, as well as local, state, and federal agency offices that oversee business practices. Because laws for home-based and small businesses vary from town to town, county to county, and state to state, you need to follow proper steps to avoid possible future legal conflicts. Networking with other home-based women entrepreneurs can also be a great help for developing business plan with authentic information and experience. Some cities, counties, and states have organizations or offices specifically funded to help women get started with fantastic business plans. Do your research—there may be more resources out there than you thought!

Selecting A Business Name

Experts suggest using a word or words that describe what you do in your business name. For example, "Karen's Custom Cushions," lets one know that Karen, the owner, will do just what her business name says—sew custom-made cushions for chairs, outdoor furniture, benches, etc. With Deborah Schadler's "Teach Me Tutoring Service," you assume students who need help with their studies will use her services. At the same time, it is wise to have a name that is not too specific and can cover a number of related services. Often a person starts a business in one direction, and then finds an opportunity to go into another. For example, with the "Teach Me Tutoring Service,"
Schadler began tutoring high school students who were having difficulty in certain subjects. Today, she has expanded her services to include coaching students to qualify for scholarships; offering a reading-readiness summer camp; teaching English to new citizens; helping newly promoted company executives improve their grammar and writing skills; and helping brain-trauma patients re-learn basic reading and writing in a local hospital's rehabilitation center. If Schadler had named her business "Schadler' Algebra Tutoring," technically she would only have offered algebra remedial instruction and thus have closed off other business opportunities.

When you decide on a name, register it with both your county and state officials. This registration—also known as DBA, "doing business as"—protects you from someone else using your name for their business plan (assuming the name you picked has not already been registered by someone else) and permits you to conduct business using that name. Contact your county clerk's office and your state business office for the procedure. You then can open a bank account, cash business checks, arrange for a separate business telephone line, etc. under your business name.

Legal Structure

Your business will fall under one of the following legal structures:
* A sole proprietorship is a business that is owned and operated by one person. It is the least costly way—in terms of registering and legal fees—of starting a business.
* A partnership is a business formed by two or more people. Because many partnerships dissolve, it is best to have legal agreements drawn up by your attorney to prevent unforeseen business disputes.
* A corporation is a more complex business association in which the business plan becomes a legal entity in itself with powers and liabilities independent from the persons who own it. It is much more likely that your home-based business will take one of the other two forms.

Permits, Licenses, And Resale Tax Number

Depending upon where you live and the kind of business plans you will be conducting, you may have to get a permit, license, a re-sale tax number, or all three to operate. Locally, check with your city, town or borough, as to zoning and other regulations regarding a home business. With county regulations, contact the office of your county clerk.
The business identification numbers you must get in order to conduct business include the following:
* A re-sale tax number—if you sell any product to consumers, most states require you to collect sales tax. Your resale tax number is also your tax exemption number, which allows you to buy supplies wholesale without paying sales tax. Contact your state department of revenue to get a number and sales tax filing procedures.
* A tax exemption number—if you sell products wholesale only, you do not need to collect sales tax, but you do need a tax exemption number, which also allows you to buy wholesale supplies without paying sales tax. If you sell wholesale, you must record the resale tax number of the shop that buys from you for your tax records.

Establish A Business Bank Account

When you are ready to open for business, you should also open a business bank account. This will keep your start-up money and income earned separate from your personal account. If you are owned of a corporation of business plan marketing, you will need a Social Security number or a federal employee identification number (if you plan to hire employees) from your local Internal Revenue Service (IRS) office. If you are a sole proprietor of your business and do not employ others, your Social Security number can be used as your federal identification. Talk to other women business owners in your area and ask what financial institutions they use and why. Shop around and compare the services of a number of banks and see which one best fits the needs of your business.

Your Business Plan

Just as you need a map to help you find the route to an unknown destination, you need a plan to help you determine which direction to go get your business up and running. Your first business plan should estimate your goals, expenses, and how much you plan to charge for your services, as well as show how you plan to attract and keep customers. After you actually work on your sample business plan, you will find you will need to revise your business plan yearly or even monthly as your business grows. There is no right or wrong way to write a business plan, but you do need to write one. Putting your business plans on paper takes your dream of owning a business and begins to turn it into reality. There are no guarantees that your business will succeed, but a well written and researched business plan plays an essential role in a business's success.

How do you write a business plan? Contact your local chamber of commerce or Small Business Development Center (SBDC) to help you draw up a plan. You may also want to contact a professional business consultant to help you write a business plan. Some important questions to consider as you write your plan follow. This list of questions is not all-inclusive. You may have additional questions to ask. Remember that the more questions you ask, the more complete your research will be. And the more complete your plan, the fewer surprises you'll have as you start out and the more successful you are likely to be!

I. What Is Your Business?

First, write a broad definition, such as cleaning, entertainment, or child care. Then specify, for example, what type of cleaning you will be doing—homes? Offices? Both? Or what kind of child care—day time? evening? Drop-off? It is important to keep both your broad and specific definitions in mind when you work on sample business plan. Your business may stay in the same broad category such as cleaning, but change directions as to the specific kind of cleaning you do, depending on what is most in demand in your area.

2: What Are Your Objectives?

Be honest with yourself and enlist everything you hope to achieve, both business-wise and personally. Also enlist both short-range and long-range objectives. Short-range objectives may include setting up your home office or applying for a loan to purchase basic equipment. Long-range objectives may include getting a certain number of customers in the first year or making a profit (for many small businesses, it may take two years before any profit is seen). Review your objectives daily, weekly, monthly, and yearly to see if your business plan sample is headed in the right direction. You may need to add (or delete) some objectives as your business grows.

3: How Do You Research Your Market?

For your business to be successful, you have to know if (a) people have a need for your service; and (b) if they are willing to pay for it. Business plan marketing of research firms for thousands of dollars in order to promote them. You, however, can do your own smaller market survey. Here is a list of criteria that should be included:

* Who will use my service? Identify your potential customers so you can target your business at them. Your local chamber of commerce can tell you the income level of your town's residents, the average number of people in a household, age levels, spending trends, and other economic details. Other service business owners in your area can also tell you about their customers.
Do not be discouraged if your preliminary business plan sample is not applicable in your area by showing the survey results. Check out nearby communities. Their residents, even though close in distance, may have completely different profiles, such as college students or military personnel.
* Do they need my service? Ask people you know (and those you do not) if they would use your service and find out why or why not. If they use a similar service or have in the past, ask them what they would like to see improved.
* What would they be willing to pay for my sample business plans? Survey similar business plans, both in your area and in other communities, to get an idea of what prices are charged. Then decide (based on your projected start-up costs and monthly expenses) how much you will need to charge to meet your financial objectives.

* Is the business plan marketing improving your service business? You need to know if the sales potential for your business will be increasing. Contact your local chamber of commerce and nearest SBDC to find out how many service businesses are in your area. Also find out how many other business plans like yours are in existence and if they are busy. Check with county offices dealing with small business plans, women's advisory councils, or the U.S. Department of Labor's Occupational Outlook Handbook to track down statistics on business growth in your area.
* Examine competing businesses. Take an Interview of customers on the behalf of the competent business entrepreneur. Can you offer something unique and possibly better? Many businesses begin to lose customers when they grow, because they forget the adage, "satisfied customers are repeat customers." You may be able to attract customers by learning from your competitors' mistakes.

4: How Will You Get Your Customers?

Now that you have a pretty good idea who your customers are (be aware that your typical customer may change as you discover who really uses your business services), you will want to tell them
(a) What services you provide; (b) what sets your business apart from the competition and how they will benefit from patronizing your sample business plans and (c) how they can engage your business services. Going back to your definition of your business will help you when you want to list the services your business offers in your advertising and promotional materials or in answer to queries about your business. You may add or subtract to these services, depending on what your customers want. Pam Baker started her business with providing routine bookkeeping. She soon expanded her business services to include billings, mailings, correspondence, and other business management matters as her customers asked her to do more. You may also want to make up a one-page, resume-type business sheet or flyer to send out in response to inquiries about your business services.

Ask yourself, what can my business plan sample offer its customers that my competition cannot? Be specific. Can you offer a better price? better service? faster service? Will your business handle an aspect other businesses will not (odd hours, small jobs, etc.)? Emphasizing your business's unique features in your advertising will help you draw customers to try your business services. Then, it is up to you to keep them! Using the information from your preliminary research, you now have an idea of the customers you want to direct your business promotion toward. For example, if your research reveals your best Prospective customers are young, married couples; you would choose different methods of promotion than if your customers are single, professional businesswomen. You will want to decide the most effective means to promote your small business marketing plan, so the target customers will be aware of your business and how they can engage your services.

5: Which Promotional Methods Will You Use?

Promotion is essentially communication. The better you communicate to your prospective customers, the more business you will receive. Knowing which advertising will be the most effective may take a period of trial and error. Business promotion falls into two categories: paid and free paid promotion or advertising comprises classified and display ads in newspapers, magazines, community booklets, etc.; radio and television (network and cable) ads; promotional aids including signs, advertisements on vehicles, pencils, business cards, telephone directories, etc.; and direct mailings. Paid advertising, next to equipment, can be the biggest expense of your new small business plans. Some business experts estimate your advertising costs could be anywhere from 2 percent to 10 percent of your annual gross income, so you want every advertising dollar to count and to reach those who are likely to patronize your services.

Before you spend a single penny on advertising, list all the local advertising sources and find out their rates. Ask the persons in charge of advertising who reads or listens to (if it's radio) their advertising. Read and listen to business ads, especially those offering free sample business plans. Notice how many repeat ads are from week to week. You might even call some of the businesses that advertise and ask them about the number of responses they get to their ads. When you are ready to advertise, begin placing your ads where they will be read by prospective customers based on your research. If you are not confident in writing a classified or display ad, ask the advertising representative for help. Most offer free assistance in copywriting and layout. Run your ad of free sample business plans for as long as you can afford and feel it will be effective. Keep track of the response to each ad as to the number of responses and number of customers who actually hire your services. You can then gauge whether it is worth it to continue that specific ad or not.

As your budget allows, try different types of media advertisements. Radio and television will reach several communities. With the rapid increase of cable television, it is worth trying their advertising. "Free" newspapers may also get good responses. Eventually, you'll know which method brings the best results for your business. Free promotion or advertising includes public talks and appearances, press releases, feature articles in local newspapers, demonstrations, promotional events, or donations of your services for home business and party plan of fundraising auctions that help people know your business exists. Free publicity, especially for a service business, is one of the best ways to get business with just a minimum expense and a little effort and ingenuity. You can begin by sending out a press release to local newspapers announcing your business plan marketing. You can also use press releases later when your business is established to announce the sponsorship of a special event or expansion of your business services.

Editors will be more likely to print your release—or follow up with a feature article—if you stick to the proper format (check sources in your library on how to write press releases). A press release must be neatly typed, doubled-spaced, concise, and written on your business stationery. You might also want to include a black and white photograph of you conducting business. Do not forget to include the basics of news stories—who, what, why, when, where, and how. Make sure the answers to these questions appear in the first couple paragraphs of your release. Do not forget to include how people can reach you for more information about your business services. Some other free methods of publicity include:

Word-of-mouth. A good recommendation by a customer to a potential customer is one of the best ways to get people to know your business plan is up and running. Begin by telling friends, relatives, and anyone you talk to that you have started your business. Always carry your business cards to hand out and give several to your friends and relatives to pass on. Establish a network with other men and women for the introduction of business plan marketing (professional women's clubs, members of chambers of commerce, other home-based business owners, etc.). They may even give you tips to help your business plan grow—as long as your business does not compete with theirs. Then, always give the best possible service as you conduct your business. Word-of-mouth can keep your business going if you give that little extra to your customers. Remember, however, that word-of-mouth can also spread negative comments about your business plans, so never forget your customer; no matter how much your business grows!

Community bulletin boards: You see these everywhere—in stores, banks, restaurants, etc. Ask permission to post your business cards or flyers (sometimes only nonprofit organizations are permitted to post notices). Then post your cards or flyers on the board, preferably at eye-level. Check back periodically to see if you need to replenish or rearrange your notices (sometimes accidentally or purposely, your materials may be covered up by other flyers). Make sure, too, your notices look professional and not something hastily scrawled and put together. Offer a seminar or be a speaker. Patricia Gallagher offers short courses for an adult education program on how to run a day care center, based on her own former home-based business. She gets paid as an expert on this subject, plus she sells her book, So You Want to Open a Profitable Day Care Center. She also has been a guest speaker for many community groups and has appeared on radio and television shows.

Have a "happening." Hold a special occasion in connection with your business plans. You can announce it in a press release and either invite the newspapers to take photos or take your own. Elizabeth, who owns a garden consulting business, conducted a children's gardening workshop in the spring. The children learned planting basics, and Elizabeth had free publicity for her business.
Donate your services to a charitable event. Auctions for nonprofit organizations, raffles, and other fundraising events provide opportunities to publicize your business, not to mention being tax-deductible as well.

6: What Will You Charge For Your Services?

This depends on a number of factors: your expenses and your time; the quality of your service; your potential market; your competition's prices; how long you have been in business (you may charge more as you improve your business expertise and hopefully get a reputation for excellenc; and what your customers are willing to pay. A national and/or professional trade association connected with your business plans may offer current rate information and other helpful sources in establishing pricing and billing. Check with your library for business directories and the Encyclopedia of Associations. With some service businesses, there may be price-charging guidelines, but if your business plan is unique or the only one in your community, you may have to set your own prices to make what you believe—and what your accountant or your bookkeeper tells you—to be a reasonable profit.

To find out if you are making a profit, you have to know your break-even point—when your projected income just covers your costs. At this point, you do not make or lose any money.
The SBA's pamphlet, Business Plan for Small Service Firms, gives this formula to find the break-even point. In this documentation, you already added up your fixed costs and your estimated variable costs. Using these two totals and the above formula, you can now figure out your break-even point. Once you know your break-even point, then you can begin to set a price for your services knowing that you must at least charge a certain amount to reach this point. A service price for each job can be determined by using the following formula: Material/supply costs + labor (your time) + overhead + the percentage of profit you want to make = your price. Overhead costs include all costs other than materials used and your labor.

If your sample business plan is your sole source of income, do not forget to include costs such as health insurance, social security, taxes, loan payments, etc. in your overhead calculations. Also, do not forget to charge for your labor. One of the biggest mistakes women business owners make is that they charge too little for their time. Women are the ones who traditionally have done volunteer work and so may not be used to charging for their time. Some women who have not been in the business plan marketing world do not put a value on their work the way their male counterparts do. Thankfully, these attitudes are changing as more women enter the work force, often being the sole supporters of themselves and dependents. Pam Baker says to her clients when they raise a question on her bookkeeping fees, "I tell them I have two children I am helping to support and this business is not just a hobby to me! That usually stops any complaints. My clients know I offer good service at competitive prices."

What percentage of profit do you include in your price? Some women use the service price equation above and double the total for their final price. Their price formula would be: [material/supply costs + labor (per project or hour) + overhead] x2 = price.
Once you've arrived at a price, compare your price to your competitors' prices and see if potential customers would pay what you need to charge. It may take some time before you come up with the right price for you and your customers. With a service business, prices often change based on a particular job or extenuating circumstances. Keep careful records of your time and expenses, and when in doubt, consult with your bookkeeper or accountant for help in determining what to charge.
The women profiled in this article, each have their own methods of determining their prices based on their experience with their business. For example, Donna Kramer, a wedding and party consultant, charges 10 percent to 15 percent of the gross cost of whatever part of the plans she handles, plus the cost of supplies she uses.

Judi Wagner, who has a balloon decorating service, followed the price guidelines in a how-to video purchased through a balloon supply catalog. She also uses her own planning and estimation sheets to help determine the costs for each event. For certain service businesses such as Kramer's and Wagner's, it is important to ask for a deposit when you are hired for a project. Wagner asks for a non-refundable, $50 deposit, which will at least cover her costs in case her client backs out.
The pricing guidelines and formulas described here will not guarantee you a profit in your business. On average, a small business marketing plans takes two years to show a profit. By carefully monitoring your records and seeking professional advice when you need it, your business can become self-supporting and profitable. The women who have successful businesses have done just that.

7: How Will You Get Repeat Customers?

"The best customers are satisfied customers." This adage applies to all businesses, especially small ones. You need your customers and cannot take any of them for granted, at any time. Following are some tips to keep your customers coming back. Be professional. Treat your customers fairly, honestly, and with courtesy. Use business cards, stationery, forms, or brochures to help establish your business plan marketing officially. Return phone calls, reply to letters and other inquiries promptly. Follow the ethics and etiquette of your business plans and avoid underhanded tactics.

Be flexible. Jackie Ruiz, who has a successful catering business, says, "Don't be afraid to go the extra mile for your customer by being competent in your business and complimentary in dealing with your customers.” Going the extra mile might mean fulfilling a special request for a customer, or helping out in a way another business plan sample would not have time to do. As long as it does not interfere with the workings of your business or cause conflicts with your family or coworkers, you may find it advantageous to help out your customers in special ways. For example, Pam Baker will sometimes see clients on Saturday mornings or other unscheduled times, but she reciprocates by occasionally taking time off from her business to attend the family matters.
Small businesses can often be more flexible with clients' needs than larger businesses, and every client likes to be treated with special attention. Clients will show their appreciation with repeat business and referrals to others.

• Provide top quality service. You may not be the biggest provider in your service area, but you can do your best for each client, and the word will spread to other prospective clients. Providing top quality service requires understanding what your client wants. You can better understand a client's expectations by asking the following questions:
  
• Have you ever used a similar service?
  
• If so, why are you considering changing?
  
• What do you expect (generally) from my service business?
  
• What do you need most from my service?
  
• Who do 1 contact if I have questions or problems that might arise?
  
• What is your payment schedule?
  
• How long will you need my service?
  
• Do you use the services of any other independent business plan sample? (You may want to contact others who have had business dealings with a new client to hear how they were treated by this company or individual)
  
• What questions do you have about my service?

This list gives you an idea of what you might want to ask new clients. No doubt, you will develop your own list, based on your own experiences. Take careful notes of your clients' answers, and make a copy of them for future reference.
If you have questions when you begin working, do not assume you know what your client wants—ask more questions. It's better to clarify something in the beginning than to do work a client does not want or need.

Evaluate your business plans. When you first start up your business, you will want as much feedback as possible from your customers. Ask them if they were satisfied with your service. Why or why not? Did they have any suggestions for improving your service? Are there any additional services they would like your business plan sample to provide? Would they use your business services again? Would they recommend your business services to another business or person?
You can ask these questions in person, over the phone, or in the form of a questionnaire. If your customer is extremely satisfied with your service, ask if they will write a letter stating the reasons they are satisfied. Then ask permission to use this testimonial to attract prospective customers.
When you have a number of testimonials, you can put them into a promotional notebook or packet like Carol Manna has. Manna, owner/president of an organizational business, put together more than thirty articles and letters of satisfaction about her business into a portfolio that she gives to prospective customers. To each portfolio, Manna attaches plastic holders that contain her business cards and brochures. The result is a professional-looking and complete promotional package that both advertises and describes in detail Manna's business services.

Even if your sample business plan becomes successful to the point that your customers seek out your services, you should keep assessing your business services. By monitoring your customers' needs and satisfaction levels, you can keep your business up-to-date. If you lose touch with your customers, you may find them stolen away by competitors. Know how to handle customer complaints. No matter how many satisfied customers you have, someday you will probably have to handle a customer complaint. If you are the sole proprietor of your business (and actually do your business services), it is hard not to take complaints personally. Joann Kaiser, who has her own wall decorating business, says, "When I had my first complaint, I was devastated! It really upset me that my customer was not satisfied. Fortunately, after I talked to my customer, I realized I had misunderstood what she really wanted. I changed what she wanted at no cost and my customer was happy again."

It is good business to adhere to the motto, "the customer is always right" (even if they really aren't). If you are courteous, diplomatic, and really listen to the customer complaint, you should be able to handle most problems. Of course, some customers are easier to work for than others. If you get repetitive complaints from one person or business and you believe you (or your employees) are doing the best possible job, you might suggest, politely, and that you will help them find another business plan sample very similar to your services. It is good, too, to have a service contract, especially for larger jobs. This protects both you and your customer should problems develop. If you are unsure how to word such an agreement, consult your lawyer. How will you financially support your business plans? This is one of the most important parts of your business plan. A good financial plan includes information such as start-up costs, sources of financing, a balance sheet showing your assets and liabilities, a budget for each month of your first year of operation along with a profit and loss projection, break-even point determination, and a cash-flow prediction. A business plan takes time to research and put together, but the better defined it is, the better you will be able to follow the right path toward success.