Business necessities

rusmanrusman Posts: 7subscriber
edited February 2008 in Business Planning
With all the things I could spend money on to start a business: lawyers, CPAs, web services, advertising, software, books, ad infinitum, I`m wondering what the community thinks are absolutely necessary to get up and running. I am planning to market a product through an ecommerce site with a starting budget of about $2000. `Employees` would be myself and my wife and we are not expecting a salary for at least the first year. I do not have any business or financial knowledge.
So, what do you think?rusman2/22/2008 11:34 PM

Comments

  • robertjrobertj Tampa Bay, FloridaPosts: 0subscriber Member
    I respectfully disagree with Craig`s last statement. I`ve seen many "product driven" companies (large and small) wind up with a "solution" in search of a problem. So my advice is to first be clear as to the "problem" your product will solve.
    Then define who has the problem (your target market), how you will reach them and what your message to them will be - because ultimately the one thing you will absolutely need for your business is customers.
  • KevDevKevDev Posts: 5subscriber Member
    I do not have any business or financial knowledge.
    So, what do you think?

    I think you owe it to yourself to get some! Preferably before you spend any money on your business!
  • thetaxdudethetaxdude Posts: 0subscriber
    Rusman,
     
    I`m sorry, but totally disagree with Janie.  Accountants and  lawyers are very important in the beginning.  I can appreciate the satisfaction of doing it all yourself.  The reality is  even the smartest and most talented people are not good at everything. Remember, it`s easy to start a business, but harder to have a successful business.  Get yourself a good accountant ASAP.  It will save you headaches later.
     
    thetaxdude2/26/2008 12:27 PM
  • skipshoeskipshoe Posts: 0subscriber
    Rusman -
     
    There is a lot of exploratory work I`d recommend first. For the price of a few good books, you might be better to answer your question on your own.
     
    First, I`d recommend that you conduct a "sweet spot analysis" on your team.  Jim Collins talks about the "HedgeHog" principal in his book "Good to Great" - read about the 3 circles of passion, DNA and financial drivers - and apply them to you and your wife.
     
    Second, I like to apply Guy Kawasaki`s Ten slide "pitch deck" to outlining my business for investors.  I know you aren`t going to investors, but building ten slides that really nail the answers to key investor questions is one of the best ways to ensure you understand your business.
     
    Third, I recommend creating a circle of people that you can "bounce your ball" with over breakfast or coffee.   When you run your 10 slides by them, and the ball makes a "splat" sound, you know you need to continue to iterate on your story.  Your circle should start with close friends and advisors who won`t burn bridges if your idea sucks.  Progressively widen your circle until you are ready to launch.
     
    When the 10 slides really sing, you`ll probably already know where you should be investing the money.  Oh - by the way, you`ll probably get a slew of free suggestions and ideas from people as they hear your story. 
     
    What?!  No e-commerce suggestions?! 
     
    As the knowledgeable folks above recommend, make sure you have the basics clear in your mind before executing on the parts that take real cash.  The plan I outline should be under $100 to execute - and you`ll be ready to spend the next $1900 wisely. 
     
    Good luck with your business!
     
     
  • EdLEdL Posts: 3subscriber



     





    Rusman,




     




    I am strong believer in keeping it simple for as long as you can. The first think is to have a business plan (what, how, when). An essential part of it is the Financial Plan. Here is a template that is FREE and all it takes is for you to enter assumptions:



       
    http://www.realeasybooks.com/small-busi ... .htm 





    On the same website you will find ezREB, an accounting software for $99 that you can use - all you need to know is the difference between Cash-In and Cash-out transactions.




     




    On more advice see a SCORE counselor, if you have not done that yet. It is FREE.




     




    Good luck.


    EdL2/27/2008 12:23 PM
  • JaceLongJaceLong Posts: 0subscriber
    Incorporation, and the process that comes with it, bring many benefits.  Just do it.  You can`t build any kind of credit, and the credibility that comes with it, without starting here.  Building business credit in the beginning so that your venture has value before it needs to show it is crucial.  Strong business credit will allow a venture to weather all types of adversity while keeping the initial stress level to a minimum because you can count on financing and help in the form of various trade accounts.  Don`t wait until you need to expand to start looking for the infusion of capitol that is needed.  Build your business credit now so when you are ready to approach help in any form there is a track record of transactions and credibility.  Your widget deserves a platform to stand on and an entity that "has it`s back" in the short term.  Even if your widget isn`t right, your platform is situated for next time, or for the next widget.
  • ryanwithanrryanwithanr Posts: 1subscriber

    Rusman:
    My response is based off the fact that you call this post "Business
    Necessities". Necessities being that you need certain components in order
    to survive.
    I am going to assume you`ve done your homework already. If you`re at a stage
    where you are ready to launch, I`d have to assume that you`ve considered
    whether or not your product(s) and/or services are satisfying a need of
    consumers; or at least doing something better than your competitors. If that`s
    the case here is what I would recommend based on the info you provided.
    - Business Plan! If you don`t have one, make one. As the saying goes,
    "Failing to plan is planning to fail."
     
    - Test the product, if you haven`t already. It`s relatively inexpensive to get
    your products up and running on the internet. With avenues such as eBay, it`s a
    good way to get your product out there and gauge whether or not a full-blown
    e-commerce site is worth the money at that moment in time.
    - K.I.S.S.: Getting your product out there is essential. Some may disagree with
    Janie`s response above, but I absolutely agree with her. Why dump a bunch of money
    into CPA`s and lawyers when you don`t even know if your business can sustain
    for it`s initial year? Focus on getting your product out there and keep it simple. Use
    quickbooks or other online financial tracking resources for your first year.
    Use an accountant sparingly.
    - Don`t worry about being a corporation or an LLC. If it`s just you and your
    wife, start small. If the business thrives, you can always reform as an LLC or
    a Corporation. It seems like so many people get excited about creating a
    corporation or an LLC, it`s just a bunch of paperwork and really not that big
    of a deal unless you need it.
    As for an e-commerce site, I don`t know what you have already, but $2,000 won`t
    get you far. If that is strictly for marketing it`s not bad. If you are
    planning on having an effective site built, optimized, etc. you should plan on
    spending more. I don`t care who does it, you won`t get what you expect for
    $2,000.
    Lastly, don`t be intimidated by your lack of knowledge. Look at all the
    successful entrepreneurs in the world that have made something of themselves
    with little or no business knowledge. You will learn a lot in your first two
    years. More than any book will ever teach you. You can read about swimming
    techniques all you want, but until you jump in the pool you`ll never know. Take
    advantage of resources such as this and other credible business blogs and
    forums. Read books, but keep an open mind. There is so much crap out there in
    regards to business literature.
    Here are a couple of resources I would recommend:
    http://www.avivadirectory.com/entrepreneur-apps/
    (Great list of apps for small businesses. Web-based but good)
    Books:
    E-Myth by Michael Gerber (I think this would be great for you)
    Good-to-Great as mentioned earlier. (Better after you`re up and running though,
    but great principles nevertheless).
    Sorry for so much writing, I just feel that you need to focus on necessities
    and maximizing your money out of the gates. Fail or succeed, this will be the
    best education of your life!!!

    ryanwithanr2/26/2008 11:20 PM
  • EnjayEnjay Posts: 0subscriber
    Rusman,
     
    It sounds like you need to start with some basic information about ecommerce.
     
    Ken Evoy is the master of internet marketing. He teaches how to write great content that attracts search engines and traffic and pre-sells your visitors. Scroll to the bottom of the page at this URL and download his free Netwriting Masters Course.http://netwriting.sitesell.com/cpm.html 
     
    There is so much information at his website, I can`t even begin to list all the topics. Just follow all the links at his site and you`ll learn tons of valuable information about network marketing and building a profitable website.
     
    Take some time to build a good foundation of knowledge before you start spending your resources.
     
    Nony
  • rusmanrusman Posts: 7subscriber
    Wow. So much excellent advice from everyone. Thank you all so much for responding.
    I feel like I`m putting the cart before the horse because there are so many things I can do and so many directions I can go before actually launching (so no, I`m not ready to launch yet). At some point I need to stop researching and start doing, but as I just said, I`m having a hard time determining what I need to do first - hence this thread.
    I really like the advice given and will work on getting my business plan done. During this time I will work on my prototypes, finish raising capital, and continue with research. At that point I will have a clearer picture of where i need to go. I do like the 10 slides and circle of friends idea suggested by skipshoe.
    PS - Ryanwithanr (how else would you spell Ryan??), you`re bursting my bubble with the ecommerce info.
    Thank you all again.rusman2/29/2008 12:21 AM
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