Constructing Your Business

“He who has not first laid his foundations may be able with great ability to lay them afterwards, but they will be laid with trouble to the architect and danger to the building”.

Niccolò Machiavelli, The Prince Italian dramatist, historian, & philosopher (1469 – 1527)

Like building a home, a business needs a strong and sturdy foundation.  In the business world, the foundation is the business owner.  Many entrepreneurs start out thinking that because they love what they do and are proficient in their industry, that they will make a successful business owner.  That is partly true.  But that is just the beginning.

Some professionals think that if they owned their own business, they’d make more money, have more freedom for creativity, more control over situations, and more security with regards to staying employed.  What many miss is the risk of losing money and personal assets, working longer hours than they originally thought necessary, pressure to keep the business profitable, lack of a steady paycheck, abiding by governmental laws and regulations, and the tremendous amount of pressure that comes with a new venture.  There are many factors to consider when deciding to open your own business.

Should you be a business owner?

Being honest about why you want to start a business is the first step.  When that question is answered, then ask yourself if you have what it takes to become a business owner.

How do you rate yourself with the following questions?

With 1 being needs improvement, 5 being average and 10 being superior, circle the number that applies to your skills, abilities and attitudes.

1. Confidence – belief in your business and the future success it will bring

1          2          3          4          5          6          7          8          9          10

2. Decision Maker – being able to analyze situations and make the proper choices

1          2          3          4          5          6          7          8          9          10

3. Communicate – being able to express your desires to others

1          2          3          4          5          6          7          8          9          10

4. Expertise – technical ability to continue growing your business

1          2          3          4          5          6          7          8          9          10

5. Risk Taker – investing time, money, effort and energy to accomplish your goals

1          2          3          4          5          6          7          8          9          10

6. Inspiration – being able to work with others and grow their loyalty

1          2          3          4          5          6          7          8          9          10

7. Motivation – mental and physical drive to accomplish your goals

1          2          3          4          5          6          7          8          9          10

If you feel that you honestly possess all seven traits necessary to enter the business ownership world, you are on your way.  However, if you feel that an area or two needs work, ask yourself what you can do to improve on those issues.  If communication is not your strong point, look to join an organization like Toast Masters.  If you feel you need more technical ability, consider taking a class at the local college or university, or sign up for additional continue educational classes offered through various organizations.

By taking action now on possible short comings, you’ll be able to withstand the pressure and have more confidence as you continue on your way to starting and building your business.

There have been numerous studies on what it takes to be a successful business owner. One’s character and behaviors are an important factor to consider when starting a business.

Answer the following questions honestly about your personality traits.

• Do you have good health?
• Are you a self-starter?
• Are you responsible?
• Are you a leader?
• Can you make tough decisions?
• Are you organized?
• Are you a leader?
• Do you like people in general?
• Do you finish what you start?
• Are you a hard worker

 Again, if you find there are areas within your character that need improvement, you must find ways to bring about a change.  Or, if for example you aren’t very organized.  You can hire staff to make up for your deficit.  However, when starting a new business, money is always an issue.   Check out your local library for books on organization, or talk to another person who you admire that has organizational skills.

As you can see, the first step is usually the toughest part of starting a business.  Being honest and open about your strengths and weaknesses can seem a bit daunting.  But as you build your foundation upon truthful evaluation, your business will be able to grow and prosper.

Market Research –

You have now assessed your strengths and weaknesses in regards to becoming a business owner.  The second step is to determine if your service is needed in the community.  Most new business owners decide to build their business in their own back yard.  Prevent a possible disaster by researching the need for your service within your community prior to start-up.

There is a large amount of information about the Complementary Care industry on a national level.  It will be up to you to research if your community fits the average profile of a complementary care client.  Following are four areas that you need to address to see if your service will fill a community need.

• Community Population – basic demographics are usually available at the local Chamber of Commerce.
• Competition – check the local listings in the phone book, chamber directory and newspapers. If there is an established hypnotist/hypnotherapist, make an appointment.  Visit their office, read their literature, review their price schedules, check their website.
• Business Restrictions – check out the city/county business office for licensing, zoning, permitting requirements.
• Community Need – mail or telephone surveys can be helpful in determining whether your service will fill a need in the community.

Once you gather the data from the various sources, ask yourself the following questions.

1. Who is my typical client?
2. What percent of the population fits my client profile?
3. What is the community’s average income?
4. Is the income level enough to support complementary care expense?
5. Is the community’s population growing?
6. Are new businesses being established?
7. If there is another business, what will my niche be?

By asking these questions upfront, you can then determine whether this community will be able to support your business.  If not, check into the surrounding areas.  Is there a larger community near by?  Is it worth the commute to locate outside of my city?

Part Time or Full Time

If you currently have a full time career, the best situation is to stay with that paycheck until such time that your business needs more of your time.  Of course, if you have enough funds in the bank to support going full-time at the beginning, that is the ideal.  Being able to give your full attention to the start-up, marketing, networking and advancement of your business keeps the momentum flowing and gives your clients the impression of a full commitment from you.  The perception of success will increase client confidence.

Partners

Another approach to consider is having a partnership.  Therapy as a complementary care industry can work well with massage therapy, acupuncture, reiki, to name just a few.

Some benefits of partnering are:

• Reduce personal risk
• Additional funds
• Emotional support
• Share management demands
• Increase services provided

But if considering a partner, every issue, from financial to emotion, needs to be discussed, agreed upon and put in writing.  Nothing is more difficult than to divorce a partner in the business world.

Business Structure –

Whether you start your practice individually or with a partner, the business structure needs to be researched to best fit your personal and financial needs.

Things to consider are….

1. How will I track my income?
2. Will I have employees?
3. What share of personal risk am I willing to take?
4. What type of business do I want? Sole proprietor, LLC, Corp?

Some of the forms of business are sole proprietorship, partnership, corporation, Limited Liability Company and limited partnership.   In general terms, a Sole Proprietorship means that all income generated for the business is passed to the owner.  You may have a partner and structure as a sole proprietor as each partner would then share in the profits.

Generally a Doing Business As (DBA) is all that’s needed to establish this form of structure.

A Corporation separates the business from your personal obligations.  In a corporation you will then be considered an employee.  One of the main advantages to forming a corporation is it may shield you in the face of a lawsuit.  However, you as an individual may still be named.  The paperwork required to form a corporation and the tax pro’s and con’s are different in each state.  Seeking the advice of your attorney and/or CPA can save you time and money in the long run.

In the middle is a Limited Liability Company.  Generally, there is one person who is in control of the company in a day to day capacity.  This person is also liable for the actions of the business.  The partner has a limited amount of control and therefore limited liability as well.  Again, the best way to decide on your businesses structure is to be advised by your attorney and/or accountant.  But remember, you may also change your structure as your business grows and becomes more profitable.

Licenses and Permits –

Just as building a house foundation needs licensing and permits, so to does building a business.  Therapy is a service.  And most services require a business license.  Licensing requirements vary from state to state as well as city and county.  Most areas charge a nominal fee for a business license.  While others also collect a portion of the business profits.   If your business is located within the city limits, some areas require a county license as well, so make sure to check with both agencies.

Call your city business licensing authority.  Check the requirements needed and whether they have a website to download the application.  This will save valuable time in your start-up process.  Applications are then generally sent to the zoning department or city planning department to make sure the business location meets the code guidelines.  Therefore, it’s a good idea to have your business location chosen.  This is true for a home based business as well.

State licensing for therapy varies from state to state as well.  Check via the internet about your state requirements and registering your business.

If your business plans on selling products, you’ll need to obtain a seller’s permit or sales tax permit.  Check with your state as to how to obtain this permit.  By having a sales tax number, you will forgo paying taxes on items purchased from wholesalers.    However, sales tax will then need to be collected, report and remitted to the state.

Permits are generally required for yard signage.  Ordinances usually restrict the size, location, lighting and structure.  If renting a space, check with your landlord as well.  Any agreement with the property owner should be approved in writing with a copy of the sign.

To have a successful business, you must be operating legitimately.  Licenses and permits are to safe guard the consumer as well as give credibility to the business.  The amount of time required to be properly authorized to conduct business is well worth the effort.

Blue-Prints

Complete the following checklist to see if you need further research or improvements before continuing your business building.

Have you had any business training?                                                  Yes      No

Are you the entrepreneurial type?                                                      Yes      No

Are you willing to risk time and money?                                           Yes      No

Have you researched your business start-up?                                     Yes      No

Is your family supportive of your business plans?                             Yes      No

Have you researched your areas market?                                           Yes      No

Is there a need for your service?                                                         Yes      No

Will your business have competition?                                                Yes      No

Have you visited your competition?                                                   Yes      No

Can you start your business while remaining employed?                  Yes      No

Do you know the benefits of each type of structure?                         Yes      No

Do you know which business structure to use?                                  Yes      No

Do you want and/or need a partner?                                                   Yes      No

Have you considered a possible person as a partner?                         Yes      No

Have you contacted your areas business department?                       Yes      No

Do you know what license(s) and/or permit(s) you’ll need?             Yes      No

If home based, have you contacted the zoning department?              Yes      No

Is your business location properly zoned?                                         Yes      No

For further information and/or research on start-up, check the following internet sites.

U.S. Small Business Administration

www.sba.gov

Entrepreneur Assist

www.entrepreneur.com

Ewing Marion Kauffman Foundation for Entrepreneurs

www.kauffman.org