In 2009 I was leading a US$20 million project when the Global Financial Crisis hit – and the project was canned.
I had been thinking about my own business for a while, and suddenly I had the decision made for me!
By then, I had been dabbling online for some years – I knew how to build websites and I had learnt how to market online. Doing something in that field was the obvious choice.
So, at the age of 56, I set up my WordPress agency.
The impact that the pandemic has had on the global economy, and the numbers of people who are now claiming unemployment benefit (particularly in the US), is enormous.
There are lots of people in my age bracket who have had steady jobs throughout their careers, who are now faced with unemployment and all that that means. Maybe you’re one of them.
If so, this post is for you.
None of the articles I reviewed when I was researching this article covered every aspect of starting a business. So the resources I’ve pulled together here cover everything you will need to deal with.
Different resources I’ve curated to cover what you need to know
The articles I’ve reviewed and linked to below, along with my own experience, address all the issues you will need to consider:
- Who will you serve? (Who are your potential customers?)
- What do they want? (What product or service will you provide?)
- How to assess whether you can deliver what they want profitably
- How you will promote your business
- How you will operate your business
- The boring bits (book-keeping and accounting!)
- The legal and regulatory bits (stuff you’ll need to deal with)
While owning and running your own business is certainly not a walk in the park, your future is in your own hands, not someone else’s. And that, for me, is a huge benefit!
So here you go:
1. How to choose a profitable business idea
This post, by Ramit Sethi, focuses on how to choose a business idea that will work for you and will be profitable.
He discusses different types of online businesses and the pros and cons of each, and he offers a useful chart that illustrates the cost/benefits of different business models.
At the end of the article he clearly favours a particular busines type, but remember to stay objective!
You may have skills that you can turn into a business that would lead you in a different direction from the one he clearly favours, so be sure to read the article critically.
Think about synthesising what you learn in this post, with your business idea from the next article, in order to reach a format that will be profitable for you.
2. 14 Steps to setting up, promoting and operating an online business
This guide by Beatriz Estay at BigCommerce.com takes you through 14 steps you need to take when setting up an online business.
It is split into 14 chapters and you can click on each one (found under the Table of Contents) for full details.
It’s not focused specifically on any geographic market, and it doesn’t cover the aspects of establishing your own legal entity, the pros and cons of different entities, finding and evaluating accountants, a suitable bank, insurance providers and other professional suppliers.
But it does cover the pure business steps you’ll need to take: choosing your product, doing market research, identifying your customers, evaluating eCommerce platforms, setting up your operation and marketing online.
3. Book keeping and accounting
This post by Rosemary Carlson in The Balance Small Business covers one of the areas that I struggled with greatly at the outset: keeping my business records.
The first time you start a business it’s really important to develop the discipline of making sure you record all your income and all your expenses, completely and accurately, from the outset.
If you don’t you will suffer all sorts of headaches the first time you submit your records to an accountant.
The accountant’s job is to audit your books and sign off on them in order to satisfy the tax man. That’s putting their professional reputation on the line, so they will look at, question and verify every entry in your books.
The article I’ve linked to below explains the different book-keeping terms, the difference between book-keeping and accounting, and how you should keep your records:
4. The tax, legal, insurance, contractual and other aspects
If you’re reading this in the US, you’ll want to check out the US government page I’ve linked to below on the legal, tax, employment and insurance aspects of starting a business.
Wherever you’re based, you will need to register your business, and receive a business registration certificate/business number/tax ID – whatever they term it in your jurisdiction.
There are different legal entity options in every jurisdiction – e.g. limited company, sole trader, LLC, etc – and they will vary from jurisdiction to jurisdiction. You will need to explore those to find the option that works best for your business in your jurisdiction.
I recommend having a chat with your accountant who is best positioned to advise on this.
The page to which I’ve linked below covers these US requirements:
- Business funding options
- Tax requirements
- Business insurance
- Hiring employees
- Consumer protection law
- Self-employment and working from home
- Commercial driving licences
Each of those sections on the page that I’ve linked to below link out to the full details for the US jurisdiction. If you’re in another jurisdiction look for the government guidelines on setting up a business to get your local requirements.
Some of my own recommendations
Book and record keeping
If you’re good with Excel you can set up your record keeping that way, which is what I do.
Otherwise there are a number of cost-effective book-keeping applications that you can use – PCMag has reviewed some of them here.
The applications reviewed by PCMag all include invoicing and collecting payments, which are an integral part of your book-keeping. Most (if not all) provide templates for customer invoices, receipts and follow-up letters.
But if you choose to stay with an Excel workbook, I strongly recommend that you set up an invoicing template of your own. You will need an invoice numbering system that correlates with how you record invoices and payments in your workbook.
I worked in credit control for American Express, and other companies, for many years and I can tell you that a large part of getting paid promptly is having good invoices!
I cannot recommend strongly enough that you get this aspect of your business set up properly from day one. It will save you hours of stress the first time you submit your books to your accountant!
Legal and regulatory stuff
I referred to invoicing above: I also strongly recommend you establish a terms and conditions document that covers and defines at a minimum:
- What service you will provide
- How you will deliver your product or service
- How you or your customer can terminate your service (if it’s a subscription type service)
- Your price and payment terms
- Your warranty – what it includes, what it excludes and, if there is no warranty, specifically stating that
- Your liability limitations
- Confidentiality commitments
- Any items that are specific to your industry, product or service
There are templates online for this – do a search for ‘terms and conditions templates’.
A template is a good place to start, but I found in the early years that I frequently updated my terms and conditions whenever any form of misunderstanding arose, to better protect myself against similar situations in the future.
Wrapping it up
The first three articles I linked to apply no matter where you live and set up your business.
If you live outside the US you will need to look for a similar web page to that in the fourth link I gave. Your government or tax department will almost certainly have their requirements set out online.
As I said at the top: owning and operating your own business is hard work. But it’s you that reaps the benefit of your work, not your boss or your employer, and you alone will have control over your future.
If you’re facing unemployment, with little chance of finding new employment in the short term, I can understand how you must feel. Hopefully the information here will help in some way.
Owner – WealthyDragon