START YOUR OWN BUSINESS
THE ONLY STARTUP BOOK YOU’LL EVER NEED
BY THE STAFF OF ENTREPRENEUR MEDIA, INC.
EIGHTH EDITION /
iii Foreword by Jason Feifer . . . . . . . . . . . . . . . . . . . . . . . . . . . ix On Your Mark . . . p a r t 1 THINK c h a p t e r 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 c h a p t e r 2 Taking the Plunge: Get Ready to Be an Entrepreneur . . . 11 Contents
START YOUR OWN BUSINESS iv Contents c h a p t e r 3 Good Idea! How Do I Know If I Have a Great Idea for a Business? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 c h a p t e r 4 Good Timing: Should You Launch Your Business Part or Full Time? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 c h a p t e r 5 Build It or Buy It? Starting a Business vs. Buying One . . . . . . . . . 53 p a r t 2 PLAN c h a p t e r 6 Choose Your Target: Defining Your Market . . . . . . . . . . . . . . . . . 93 c h a p t e r 7 If You Build It, Will They Come? Conducting Market Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 c h a p t e r 8 The Name Game: Naming Your Business . . . . . . . . . . . . . . . . . . . .135 c h a p t e r 9 Make It Legal: Choosing a Business Structure . . . . . . . . . . . . . . . . 147 c h a p t e r 1 0 Plan of Attack: Creating a Winning Business Plan . . . . . . . . . . . . 167 c h a p t e r 1 1 Call in the Pros: Hiring a Lawyer and an Accountant . . . . . . . . 183 p a r t 3 FUND c h a p t e r 1 2 All in the Family: Financing Starts with Yourself and Friends and Relatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
START YOUR OWN BUSINESS Contents v c h a p t e r 1 3 Nothing Ventured, Nothing Gained: How to Find and Attract Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 c h a p t e r 1 4 Looking for Loans: The Ins and Outs of Debt Financing . . . . . 239 c h a p t e r 1 5 Fed Funds: How to Get Government Loans . . . . . . . . . . . . . . . . . . 259 Get Set . . . p a r t 4 PREPARE c h a p t e r 1 6 What’s Your Deal? Negotiating Successfully by Cliff Ennico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .277 c h a p t e r 1 7 Site Seeking: Choosing a Location for Your Business . . . . . . . . 285 c h a p t e r 1 8 Looking Good: Creating a Professional Image . . . . . . . . . . . . . . . 309 c h a p t e r 1 9 Stock Answers: The Lowdown on Inventory . . . . . . . . . . . . . . . . 323 c h a p t e r 2 0 Mailing and Shipping: Transporting Your Goods . . . . . . . . . . . . 345 c h a p t e r 2 1 Charging Ahead: Offering Your Customers Credit . . . . . . . . . . . 357 c h a p t e r 2 2 Cover Your Assets: Getting Business Insurance . . . . . . . . . . . . . 379
START YOUR OWN BUSINESS vi Contents c h a p t e r 2 3 Staffing Smarts: Hiring Employees . . . . . . . . . . . . . . . . . . . . . . . . 397 c h a p t e r 2 4 Perk Up: Setting Employee Policies and Benefits . . . . . . . . . . . . . 435 p a r t 5 BUY c h a p t e r 2 5 Buyer’s Guide: Business Equipment Basics . . . . . . . . . . . . . . . . . . 475 c h a p t e r 2 6 Business 24/7: Using Technology to Boost Your Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491 c h a p t e r 2 7 Your All-Important Website: Building Your Web Presence . . .513 c h a p t e r 2 8 Keep in Touch: Using Technology to Stay Connected . . . . . . . . . 533 Go! p a r t 6 MARKET c h a p t e r 2 9 Brand Building: How to Build Your Brand . . . . . . . . . . . . . . . . . . 553 c h a p t e r 3 0 Genius Marketing: Advertising and Marketing Your Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565 c h a p t e r 3 1 Talking Points: How to Promote Your Business . . . . . . . . . . . . . 623 c h a p t e r 3 2 Sell It! Effective Selling Techniques . . . . . . . . . . . . . . . . . . . . . . . . . 649
START YOUR OWN BUSINESS Contents vii c h a p t e r 3 3 Now Serving: Offering Superior Customer Service . . . . . . . . . . . 669 p a r t 7 ENGAGE c h a p t e r 3 4 Net Sales: Online Advertising and Marketing . . . . . . . . . . . . . . . 681 c h a p t e r 3 5 Social Media: Using Online Platforms to Spread the Word . . . 697 c h a p t e r 3 6 Can You Relate? Social Media Networking . . . . . . . . . . . . . . . . . . 711 p a r t 8 PROFIT c h a p t e r 3 7 Keeping Score: The Basics of Bookkeeping by J. Tol Broome Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .727 c h a p t e r 3 8 Making a Statement: How to Create Financial Statements by J. Tol Broome Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . 747 c h a p t e r 3 9 On the Money: Effectively Managing Your Finances by J. Tol Broome Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 c h a p t e r 4 0 Pay Day: How to Pay Yourself . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795 c h a p t e r 4 1 Tax Talk: What You Need to Know about Your Taxes with Insights from Mark J. Kohler . . . . . . . . . . . . . . . . . . . . . . . . . 801 a p p e n d i x Business and Government Resources . . . . . . . . . . . . . . . . . . . 825
START YOUR OWN BUSINESS viii Contents Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863
THINK
c h a p t e r 1
Introduction
c h a p t e r 2 Taking the Plunge Get Ready to Be an Entrepreneur
c h a p t e r 3 Good Idea!
How Do I Know If I Have a Great Idea for a Business?
c h a p t e r 4 Good Timing
Should You Launch Your Business Part or Full Time?
c h a p t e r 5 Build It or Buy It?
Starting a Business vs. Buying One
P A R T 1
With the purchase of this book, you’ve taken your first step on the road to entrepreneurship. It’s not a step to be taken lightly, which is why buying this book may be the smartest thing you’ll ever do for your business.
Start Your Own Business can have a major impact on your life. We meet people all the time who tell us how this book or Entrepreneur magazine changed their lives—and few are sorry they took the leap into business ownership. Whether they have succeeded or not, almost no one regrets the journey and the knowledge they come away with.
Start Your Own Business is designed as a roadmap to help you plan a course for your own journey to business ownership. We’re here to show you the best routes to take,
7
Introduction 1 C H A P T E R
help you avoid the potholes and road closures, and navigate the curves and detours.
Some will tell you that the journey you’re about to take is a hazardous one—but not with us at your side! Start Your Own Business prepares you every step of the way. We’re here to instruct and encourage you, to show you new ways to do things, and to remind you of the tried-and-true pathways to success. You wouldn’t go on a climbing adventure without the proper gear, right? Think of Start Your Own Business as part of your entrepreneurship gear kit. Refer to it every step of the way, starting with how to assess whether your idea for a business is a good one (or learn how to find or develop an idea for a business if you know you want to be an entrepreneur but don’t quite know what business you want to own and operate) to finally opening the doors to your new venture. Along the way, we provide forms, worksheets, and checklists you can use in your business planning to make sure you’re on the right track.
Because business ideas, trends, and strategies constantly change, we strive to keep Start Your Own Business up-to-date. For this edition, we’ve updated and revised (or expanded) every chapter.
Our journey goes from the hows and whys of running your own business to the latest on how to attract visitors to your website, keep them there, and make sure they return for more. We also move on to social media marketing and networking. If you haven’t jumped on the social media bandwagon yet, your business can’t afford to be left behind. We show you how to use social networking tools and even digital marketing to connect with potential customers, engage with your audience—and keep up the conversation—because in today’s marketing landscape, that’s how brands are built.
We also feature chapters on running your business virtually, using the latest technology to connect seamlessly, and engaging in the most recent funding options that are readily available.
Many business resources and tip boxes (see examples on the next page) have been updated for this edition.
START YOUR OWN BUSINESS 8 p a r t 1 / Think
Finally, there’s an appendix that’s chock-full of resources with contact information. We list business associations, federal agencies, magazines, and websites covering a wide array of topics from advertising and marketing to accounting and taxes.
tip
Here you will find helpful information or ideas you may not have thought of before.
warning
Here we remind you to heed the warnings to avoid common mistakes and pitfalls that others have made before you.
This box gives you ideas on how to do something better or more efficiently, or simply how to work smarter.
This box points you to current and often comprehensive websites that you might seek out for business information.
save
Look for this box to provide valuable tips on ways you can save money during startup.
Starting your own business isn’t as frightening or risky as some would have you believe. But it’s a journey that shouldn’t be taken alone—and that’s why you bought Start Your Own Business. We’re glad you’ve chosen us to guide you on this exciting journey. You’ll be a smarter traveler for doing so. Let the journey begin.
START YOUR OWN BUSINESS c h a p t e r 1 / Introduction 9
aha!
e-fyi
FYI
“If you’re thinking about entrepreneurship, if you’ve got a business idea, if you’re struggling with your startup—you need this book! It’s chock full of essential information and invaluable lessons you’ll refer to daily on the road to making your business dream a reality.”
BARBARA CORCORAN
Whether you’re looking to start your side hustle or go all-in on your next big idea, Start Your Own Business is the first step toward entrepreneurship. With more than 50 years of experience, the team at Entrepreneur is uniquely qualified to guide a new generation of bold individuals like you looking to make it happen on their own terms. Featuring advice from top business experts, practicing business owners, and thriving entrepreneurs, Start Your Own Business uncovers what you need to know before taking the plunge, securing finances, launching your venture, and growing your business from startup to household name. Learn how to:
Avoid analysis paralysis when launching a business
Define and research your ideal audience
Test ideas in the real world before going to market
Pitch and win funding from venture capitalists, apply for loans, and navigate crowdfunding
Manage your tax and legal tasks with advice from the pros
Use influencers and targeted Facebook and Google Ads campaigns to successfully promote your brand on social media
For more than 50 years, Entrepreneur Media, Inc. has set the course for success for millions of entrepreneurs and small business owners. We’ll teach you the secrets of the winners and give you exactly what you need to lay the groundwork for success.
ISBN-13: 978-1-64201-135-7
Small Business / Entrepreneurship
Cover design by Andrew Welyczko
entrepreneurpress.com
Founder of The Corcoran Group & Shark and Executive Producer on ABC’s Shark Tank
