biz ladies: launching a business


Today’s Biz Ladies post comes from previous contributor and retail strategist for creative business owners, Rena Tom. Rena previously owned Rare Device, a boutique and art gallery with locations in Brooklyn and San Francisco that was renowned for its carefully edited collection of design objects, books, housewares and accessories, and for supporting small, innovative designers and artists whose work was not easily found in stores. She remains an avid crafter and blogs about personal projects, as well as retail trends and small business tips, at renatom.net.

Today, Rena shares some of her personal expertise on launching a business. From the initial legal steps to spreading the word about your new biz, Rena presents her easy steps to launching your business the right way. Thanks, Rena, for this insightful post! — Stephanie

Read the full post after the jump . . .

Launching a business, no matter the size, is hard work. Let’s say you’ve got the idea, the temperament and the opportunity to start your own business. Now what? Today I’m going to offer you a framework for further research. Here are 10 tips for taking your business from idea to reality; in a nutshell, planning, communication and analysis are going to be your best friends during this process.

THE BASICS

1. Make it legal. Many businesses grow out of hobbies, and that’s fine, but when all of your friends and family have bought from you and you start selling to strangers, it’s time to get serious. This will mean different things for different businesses, but it will definitely include choosing your business name, legal structure and then putting that business name onto something promotional, like a website, postcards or business cards. Beyond that, you might look into liability insurance, a business bank account, operating permits and payroll services. Know what you need to do to establish your particular business. For example, don’t plan the grand opening of your cafe and then get a letter wondering why you haven’t done your permits and inspections.

2. Write a business plan. Creating your business plan is an exciting process for some people and right up there with going to the dentist for others. I am guilty of procrastinating on this one myself. However, when working with clients, I have found that those with even a simple plan were better prepared to deal with major questions that arise before their launch and after.

If you are going after financing, you’ll need to create a pretty traditional business plan. If you are writing it for yourself, be creative. Start with who/what/when/where/why/how and then think about the future of your business. Pretend someone is writing a Time cover story article five years from now on your amazingly successful business. What does your business look like, and how did you get there?

3. Have enough money. I know, I know, there’s never enough money! But now that you’ve got your business plan in hand, you will have a very good idea of the amount of money you’ll need, not only to start your business but also to have in reserve. When I was operating Rare Device with my business partner, we liked to reserve three months’ worth of expenses in the bank. At certain times of the year, this was not possible, but that cushion is what kept the lights on, our vendors happy and our partner relationship intact.

THE LEAD-UP

4. Communicate your mission. Your mission statement should be part of your business plan. It should be short, sweet and easy to understand, and it should be less about you and more about your customer. Are you making their life better or more beautiful? Are you them saving time or money? Know your mission and tell it to your audience.

5. Document the process. There are a couple approaches to launching a business. Some businesses like to keep everything a mystery until opening day, but increasingly, the strategy is to let people know as soon as possible what you are planning to do. This allows you to build buzz and community beforehand. Establish your blog, Twitter and Facebook accounts early on (and other platforms as appropriate for your industry). Give people sneak peeks behind the curtain. I worked at an art gallery, and we would joke that the busiest days were the ones when the door was ajar and had a sign that said “Installation in Progress.”

6. Be consistent and prepared. Make sure everyone in your business knows the plan. Again, you want to present a very clear vision to your future customers. This goes double for customer service; know how you are going to deal with questions, suggestions, complaints and returns. Have an FAQ ready on day one.

7. Make a launch plan as well as a business plan. A launch strategy deals with how you are going to introduce your business to its target audience. Definitely think about whom your business is for, so you know where they are getting their information, and keep notes on innovative ways people have reached you with their new service, business or product. For some businesses, a press release submitted to media outlets might be really important. Other businesses might start with a tantalizing preview sent to tastemakers or influential groups. Or maybe you make a product and will offer pre-orders to your mailing list.

8. Be ready for success. You personally might feel ready to sit back and let the money roll in, but in order for that to happen, you must have an operational plan in place. If your launch was fantastic and you wake up to 5,000 orders of your widget, what would you do? If you need to find a bigger office or studio in a hurry, where would you go? You don’t have to have all the answers, but try to think of the best-case scenarios for your business and have some idea of how to solve any difficulties that may arise.

NOW WHAT?

9. Spread the news. So you launched your business, and people are talking. That’s great! Don’t forget to repeat or repost because press begets press. Many of my clients are so busy that they forget to promote, which is just a lost opportunity. You’ve worked hard — let people know it paid off.

10. Analyze the feedback. Look at the reactions to your business. Look at your launch strategy and evaluate how some techniques worked better than others. Again, new business owners are very busy and often don’t feel they have time to look backward, but studying your successes and failures and adjusting your business practices accordingly will keep you afloat far beyond the launch.

Kathryn

As someone who has recently launched a small business I echo what Rena says about having a launch plan and spreading the news. I’ve found “spreading the news” to be harder work than the set-up!
A great little check list, thanks

Shannon G.

Great post! Writing a business plan is so helpful in thinking about the future of your business and where it fits into the marketplace. Thanks so much Rena!

Kinga

I launched a blog before my shop/business to let people know what I am up to and was worried that this may have been bad strategy so this article makes me feel good about it…I love documenting the process and posting small sneak peeks and it’s keeping me creative, accountable and working toward a promised goal…..Thanks Rena for all of the advice!

Charlie

I need to print this out, study it, sleep with it under my pillow, scrawl it on the bathroom mirror. Thank you, Rena- you’re an inspiration!

Rena

Kinga, unless your biz depends on a level of secrecy, I think the more people can spread the word before opening, the better! It’s also a way to record of all the progress you are making and feel good about it when you are having a tough day :)

Meg

This is really helpful. I opened a shop recently, and haven’t even told my family and friends yet. Too much of a nerd. I told myself when I hit 25 sales, then 50, 75 …
One day!

Sara

This is an excellent post. I wish there was more elaboration on the Launch Plan. I’m opening my letterpress studio in October 21st. My plan is to invite a local bride magazine, be in several non traditional craft fairs in the area and work with Etsy. But, am I missing something? How else can I get the word out?

Angel Y.

I’m so excited about this post! I’m currently in the process of writing my business plan and it’s great to see others are also in the development phase. Keep your head up ladies!

Laura @ Found Beauty Studio

As someone who slowly started my business six years ago and then moved more and more slowly toward going full time, I can seriously echo all of this and add that it doesn’t have to be an overnight thing. I did a business plan years ago and it did take me six years to get here. I based my own plan off of the strategic plans I’ve done with nonprofits as part of my consulting gig, but does anyone have any great templates they’d like to share?

Emma

A great post thank you! I definately agree with some of the comments above – I have found spreadng the word is the hardest task. But once you do start things can snowball quickly. It is a great idea to build up business slowly and have realistic expectations about the time needed for people to start doing business with you.

Katie

This is awesome! I’ve been thinking about taking my hobbies into business for a long time, and this is definitely helpful in turning that into a reality!

Thank you!

Dan Jablons

As a retail consultant (www.retailsmartguys.com) I would agree with this list, but there is a key component that I would add if your business includes the buying and selling of inventory. That is a cash flow plan which shows what you will buy and what your sales forecasts are to support that inventory plan. Retail businesses must have this because their largest expense is their inventory, and incorrect planning of inventory purchases is the reason why most retail businesses do not survive their first year.

Macy Lopez

Very well toned advice from one biz lady to another. Everyone can learn something out of this entry. Indeed, experience and constant hunger for learning leads you to greater knowledge. All the best to Rena and thank you to you.

Jill Simpson

There are some great ideas in here, thanks! I am launching an e-commerce site soon and hadn’t thought about starting my blog ahead of the launch.

Deeyn for Nannie Inez, good living

Thank you so much for the advise. We are opening a design pop up shop November 1st but the sleepless nights set in months ago. Getting the word out is a big task but I am trying to think of creative ways to be engaging. Business has evolved and I wonder how effective traditional promotion will be.

Dan you are absolutely right about cash flow. You walk a fine line between saving money and not having enough interesting product or over spending and carrying too much inventory. Hopefully over time this gets easier as you learn your customer. However in the early days most retailers have to pay for product up front which is a huge hit to cash flow. I am at this place now and it is very difficult.

Kirsten

I have been working non-stop to launch my new company this year.
Sketch-Folio.com offers:
Flat Fashion sketches – Hundreds of downloadable flat fashion sketches designed weekly with Adobe illustrator as well as custom orders (by uploading a jpeg).

Its nice to know that I can check off all of your tips!! Great article. Thanks!

Shannon

Thank you, Rena! I agree with Sara in that I’d love to see a follow-up post on the launch plan. I have a launch party scheduled for my online jewelry business in a local brick-and-mortar shop and I could use some advice on basic logistics.

Vintage style darling

I started my business sort of overnight, with a lot of excitement and energy. Not enough planning! 7 years on, after reading like 300 books, had numerous consultant, from business, marketing, PR, to accounting, I learned that I could have planned, oh at least 6 months. But nothing prepare you for what lies ahead, your biggest challenge would be when success overcomes you, there is no back up plan to support you.

Vintage style darling

For anyone is launching a brick and mortar shop, I might not be expert, but certainly experienced. I had used hard earn cash renting commercial property, like 7 !! And two of them is shop.

So stand in front of the shop you want to rent, find out the footfall, like 100,200 people going in that day? Assume like 10 people buys from you, that you can price your item accordingly. How much do you need to make to support and have a small profit for you business? So let’s say you need $400 a day to break even, like paying for all the rent, staff, stock, tax, bills etc. Then anything extra you made could be profit. Of course, there is so many hidden costs. Do not underestimate.

There is another really painful lesson I learned, commercial property landlords are mostly evil. They will charge you when you leave, there can be a long inventory of ‘improving’ your property, one of my landlord was claiming that we cannot leave because there was a finger print on the door handle!
So be very careful, find out the previous tenants from the estate, it should be easy to do, have a chat with them, sounds like hassles, but it is much better for you in the long run. It can avoid a lot of aggravations at the end if you wish to leave.

dawn

Hi Stephanie-

Do you have an email address I can send you some questions about starting a handbag collection? I made up the sample and now Im looking for a factory to make them. I would really like to stay in the US and manufacture it here, please let me know! I want my bags out in the world soon. Chat soon

Francesca

Really happy I stumbled upon your site – thank you BIZ LADIES! I am studying Cert 4 in Small Business at present, and about to launch my new business idea on December 22, 2012. My 3 way garment is aimed at the female traveling backpacker. Made here in Australia, it will have a bright, hand painted design by Indigenous ladies on the mid north coast. $1 of each sale will go back to their community. It is organic, light and easy to wear. Just taking in all your info – I need now to concentrate on my website before the launch. Thanks heaps for all your encouragement. Your a star!

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