Women's Small Business Start-Up Kit, The

A Step-by-Step Legal Guide

Peri Pakroo

• Publisher: NOLO
• Year: 2018
• ISBN:
  9781413325249
• Edition: 5
• Topic: Business
• Subtopic: Small Business
• Index: Business

AUDIENCE:
The audience is women entrepreneurs of all stripes, from independent consultants to arty creative types who want to make and sell handbags, to corporate types who want to start executive search firms and break into the Fortune 500. REASONS TO BUY THIS NEW EDITION:

• This book offers practical and concrete information including legal rules and bureaucratic tasks involved in small-business start-up and management, not just inspiration and pep talks like many other women-oriented business books.
  
• This book covers all the important aspects of starting and running a business from legal structures to bookkeeping to taxes to e-business--not just a focus on marketing, as many women-oriented business books do.
  
• This book doesn't rely on cutesy or silly imagery or stereotypes of women business owners, but focuses on solid business fundamentals with extra attention to the issues and concerns commonly reported by women entrepreneurs, especially working mothers.
  
• The entire new edition is updated to include the latest legal and tax information and online resources affecting women business owners, with particular attention to online resources that help women most efficiently manage and market their small business.The market is huge: According to the National Association of Women Business Owners, more than 9.4 million firms are owned by women, employing nearly 7.9 million people, and generating $1.5 trillion in sales as of 2015. And according to the 2016 State of Women-Owned Businesses Report, commissioned by American Express OPEN, women launch over 1,000 new businesses each day.

CHAPTER

1

Choosing the Right Business for You

The Realities of Entrepreneurship

Top Considerations for Developing Your Business

Honestly Evaluate Your Small Business Skills

Consider Co-Owners Carefully

Use Caution When Working With Your Spouse or Relatives

Assess Your Tolerance for Risk

Keep Networking at the Top of Your To-Do List

Maintaining Work/Life Balance

Define “Success” on Your Own Terms

Pick the Right Business Structure and Size

Develop Healthy Work Habits

Nurture Personal Relationships

Mixing Business and Kids

Developing Business Systems

The Role of Business Owner

Pop quiz: What life do you envision for yourself as a business owner? I’m not talking about the business you see yourself running, but the life you want to lead. If you haven’t thought much about this, now is the time. Assuming that you want your business to serve your life instead of the other way around, you need to include big-picture life goals in your planning process. Self-employment takes many different forms and supports a wide range of lifestyles; it’s up to you to decide what goals are most important to you and plan your business accordingly.

It’s all too easy for new entrepreneurs to be seduced by traditional notions of business success without thinking about the lifestyle implications or considering alternatives. The “success” stories we always hear about in business magazines and other mainstream media constantly focus on big dollars and rapid growth—and the classic depiction of the business owner who works 18 hours a day. If you leap into starting a business without taking the time to define your own vision for your life as a small business owner, you might find yourself among the many entrepreneurs who complain they’ve become slaves to their businesses—much like they felt like slaves to their jobs.

The truth is, business success can take many different forms, from major retail empires to microbusinesses with modest incomes. If you take care to explore your unique vision of success early in your business planning, you’ll be much more likely to build a business—big or small—that truly makes you happy.

This chapter looks at big-picture lifestyle questions new entrepreneurs should consider when in the early planning stages of a venture. I’ll focus on developing a realistic picture of what it’s like to run a small business and help you understand how to approach your planning efforts so that the business fits in well with your personality and lifestyle choices. We’ll cover:

• the realities of working for yourself, including what personality traits and skills are important when you’re self-employed

• practical tips for maintaining a healthy work/life balance, including choosing the right type of business and engaging in healthy work habits

• the importance of implementing systems within your business to ensure that it runs smoothly, especially when you’re not around and/or if you have staff, and

• what’s involved in the role of the business owner, separate from other roles you might play in the business, such as leading a sales team, providing professional services, or handling tasks like bookkeeping.

By the end of this chapter, you’ll have a good idea of the personal considerations you should address in order to ensure the business you start fits well with your ideal life. You’ll then be in a good position to start the “business” side of your business planning as covered in upcoming chapters, when you’ll focus on developing a winning idea (Chapter 2) and fleshing it out in a solid business plan (Chapter 4).

What’s the best part of running a business?

“Getting to do exactly what I want, how I want to . . . and not working for someone else.”

— Kyle Zimmerman

“The fact that I work in the field of my choice doing what I love, with freedom to be creative. The ability to model the business philosophy exactly to my standards and beliefs is something I would never have working for someone else.”

— Sabrina Habib Williams

“Being self-employed is pretty ideal for becoming a parent. I can decide what kind of a schedule I need (within reason) and be more in control of my life than if I worked for someone else.”

— Rebecca Pearcy

“Getting to call the shots—nothing quite compares to having the autonomy to decide which projects you want to take on, and when and how you want to work. Even when things are rough, it’s reassuring to know that if you want things to change, it’s in your power to change them.”

— Lauren Bacon and Emira Mears

“The constant newness, change. There are always new issues and challenges, and this suits my personality. For example, just last week we decided to launch an entirely new brand/branch within Betty’s—Betty’s To Go, which will be off-site massage geared toward the film industry. Now we have this new focus to keep things fresh. It’s also true that I now cannot imagine working for someone else.”

— Elissa Breitbard

“The best part of running a business is the flexibility of my schedule. I realized how important this was when I was pregnant and after having my daughter.”

— Leila Johnson

“The challenge and the learning are the best parts of this business owner puzzle. After failing at other businesses, I have rejoiced in understanding that my failures have been my best lesson. I have no fear of thought-through risk, and have built a tremendous amount of confidence from this.”

— Nicola Freegard

“When you’re a consultant, people really are turning to you for advice. Having the intellectual freedom to speak my mind and being able to substantially influence the direction of a business entity are probably the benefits I appreciate most about the choice I’ve made.”

— Isabel Walcott Draves

The Realities of Entrepreneurship

While teaching business start-up courses for the past several years, I have met scores of would-be entrepreneurs with boundless energy, passion, and fabulous ideas for new businesses—including many with seriously misguided ideas about what it’s like to own and run a business. If the idea of being your own boss conjures images of sleeping late, enjoying fancy lunches with clients, or a swank corner office with panoramic views, think again. Starting a business is rarely so glamorous, especially in the early days when you may find yourself fantasizing about simple things like an afternoon off or a quiet homemade dinner.

Even if you think you have a pretty realistic vision of starting a business, it’s worth stepping back in the early days of planning your business and examining your motivations and assumptions to make sure entrepreneurship is really right for you. Here’s a quick list of practical realities.

• Business owners need to be comfortable making decisions on their own. From big strategy decisions, such as what type of business entity to form, to details such as how much to pay an administrative assistant, a business owner makes lots of decisions every day. Even if you hire a manager for your flower shop or restaurant, ultimately the buck stops with you. If decision making isn’t one of your strong suits or stresses you out, think twice about being your own boss.

• Pessimists need not apply. Most entrepreneurs are eternal optimists who see opportunities instead of barriers. If you immediately think of ten or 100 reasons why an idea might fail, you’ll likely have a hard time making it far in business.

RESOURCE

To nurture your inner optimist, read The Art of Possibility: Transforming Professional and Personal Life, by Rosamund Stone Zander and Benjamin Zander (Penguin). The book opens with a story about two marketing scouts from a shoe factory traveling to Africa to explore business opportunities. The first scout sends a telegram back to the factory, “Situation hopeless . . . no one wears shoes.” But the second sends the message, “Glorious business opportunity . . . no one wears shoes.” The more you can cultivate the latter attitude, the more attuned you’ll be to opportunities all around you.

• You’ll need a thick skin. The most successful business owners are unafraid (or at least willing) to boldly promote themselves, their businesses, their products, and their services. You’ll need to be able to handle rejection from potential customers or challenge from competitors, so if you are easily wounded or prone to giving up when faced with obstacles, entrepreneurship may not be the best route for you.

• Running a business can be lonely. Many entrepreneurs are surprised to find how isolating it is to run a business. Working alone, late at night after the kids have gone to bed can really make you feel alienated from the world. It’s a common issue for solo operators, but even those with employees often bemoan their lack of peers. You may have to spend extra energy developing friendships and a social circle. Note that if you take the advice we offer throughout this book and regularly engage in networking, you’ll feel less isolated while simultaneously boosting your business’s chances of success.

• A great business idea is no guarantee of success. I can’t count how many people I have met who say they have a fabulous business idea—in many cases, it actually is fabulous—but seem to think that this killer idea will just magically transform into a profitable business. The truth is, an idea is just the starting point. Even the best idea requires work and money to start the business, market the product or service, and guide the venture to success.

• Being organized will help lower the stress of running your business. Below we discuss the importance of organizational skills such as keeping a schedule for yourself and developing methodical systems to run your business. In general, being organized helps save time and reduce stress, two major factors in how much you’re likely to enjoy your life as a business owner.

• Without a boss, your motivation and discipline will need to come from within. For some people, it’s a struggle to find the motivation to put in long hours and do tasks they loathe (for many, this includes bookkeeping). If you need a boss to keep the fire under you, self-employment may not be a good fit.

• You should love what you do—and remember to treat it like a business. I’ve never been a fan of choosing a business idea purely based on what’s hot and profitable at the moment. Going with what you know and love is always a better bet. But just because you pursue a passion doesn’t mean you should be any less businesslike. If your business is making jewelry, doing photography, freelance writing, or any other creative pursuit, it’s important to treat your work like a business, not a hobby. The many different aspects of doing this—business planning, conquering the bureaucracy, keeping your books, and more—are the prime subjects of this book.

Top Considerations for Developing Your Business

Besides getting real about what life as an entrepreneur might look and feel like, you should also take into account some specific considerations regarding your own strengths and weaknesses, as well as of the team you’re considering putting together. Let’s look at some of the most important things to think about as you push your business idea forward.

Honestly Evaluate Your Small Business Skills

When deciding what business to start, it’s important to evaluate your ideas in terms of what skills may be particularly important. For a business to succeed, many skills come into play—not just the expertise at the heart of the business. In addition to that expertise (for instance, graphic design experience if you want to start a graphic design firm, or knowledge of pet products and services if you want to open a pet supply shop), a successful business relies on more general skills. For example, every business regardless of industry needs to manage its money, engage in marketing, and, if the business has staff, manage employees or subcontractors.

New entrepreneurs are often surprised to discover that the success of their venture may depend on skills they didn’t expect would be important—and that they may not possess. For example, some businesses may be heavily dependent on technology, or may require sophisticated financial management. By evaluating the skills required for your business and your own strengths or weaknesses in those skills, you’ll develop a realistic picture of how well suited you are for running that business.

A common scenario is for an entrepreneur to have plenty of skills in the core aspect of the business but not i...