Small businesses exist in a noisy space. You have an idea for the next product or service that will change everything. So does the person next to you, and next to them, and so forth. With this much noise in the marketplace, how can you make your business idea stand out from the pack?
The answer isn’t making a promise you can’t deliver on or using a flashy gimmick as your business model. Business ideas that stand out are ones that have done their background homework. Preparation is key to standing out, and your strategy needs to go beyond saying, “I have a cool business name!” Let’s take a look at what your business needs to sustain itself over time.
1. A detailed business plan
The foundation of a small business is its business plan. This document allows entrepreneurs to align towards a common vision for the business and glimpse into its future.
Entrepreneurs may draft a traditional business plan or a lean business plan for their startups. A traditional plan lives up to its name. This 30-40 page document is written three to five years out. It details in-depth what the business offers and its development, industry, market, management and financial projections. Lean startup plans, on the other hand, are usually no longer than a page. These quickly sum up the company’s value proposition, partnerships, customer relationships and revenue streams.
Regardless of which plan you write, entrepreneurs must draft their business plan objectively and critically. This helps better evaluate the feasibility of the business in the long run.
2. To incorporate or form an LLC
Establishing credibility is the next move that helps small businesses stand out. One of the fastest ways to do that is to incorporate or form a limited liability company (LLC) for the business.
How do you know if forming a corporation or LLC is the right fit for your business? Let’s take a quick look at what these legal entities offer entrepreneurs.
- Liability protection: You receive this benefit whether you incorporate as an LLC or corporation. This separates your professional and personal assets. If something should happen and your business becomes liable for debts or a lawsuit, liability protection ensures your personal assets (like houses and cars) are not at risk.
- Tax advantages: Tax deductions will vary a bit depending on the entity type. Corporations, for instance, may deduct employee benefits like retirement plans (for employees) and medical insurance.
- Structure options: Is your business pretty small and nimble? You might incorporate as an LLC for its flexible structure. Do you plan to accept or seek money from investors in the future? A corporation is the perfect structure to get started.
Chances are high that your business has a unique name, phrase or design associated with it. These assets are known as trademarks. A trademark brands your business and its ideas to the world.
Ready to claim exclusive rights to the mark? Start by conducting a trademark search. Ideally, this should be done before filing for a trademark as it allows you to review existing and pending trademark applications and determine if your mark is unique.
Once you have determined that the mark is unique, file a trademark application. This application is filed with the U.S. Patent & Trademark Office (USPTO). You can “watch” over your trademark while you wait, too. This is done through the USPTO’s Trademark Status and Document Retrieval (TSDR) system. Applicants that have filed their trademarks may watch over other pending applications to ensure nobody registers a similar mark.
4. Permits and licenses
It’s always a little tricky to advise on business licenses and permits because they vary for entrepreneurs. There is no one ‘right’ set of permits and licenses. Much of this is contingent on the type of industry you’re in, and the city and state you do business.
Depending on the city and state you do business in, business licenses and permits can vary from a basic business operation license to a home occupation permit. If you aren’t sure what you need, check in with the state or local jurisdiction. You may also work with a third party business service that can help you research your requirements and get your business licenses.
5. Registered agent services
There’s never enough emphasis placed on the importance of getting a registered agent. A registered agent (RA) accepts official documents on behalf of the business. This may be an individual (entrepreneurs may act as an RA) or a company that has permission to communicate with a corporation or LLC.
An RA will accept and organize business documents and pass them along to the business owner in a timely manner. This keeps paperwork from getting lost or forgotten. Registered agents must have a physical street address in the company’s state of formation. They should also be available during general business hours to receive service of process.
Why do you need a registered agent? Aside from staying compliant with state laws, registered agents provide small businesses with privacy. Many entrepreneurs would rather not have confidential documents delivered to their businesses during hours of operation. Enter the RA, which can accept this information discretely without the involvement of your small business.
What’s stickiness, exactly? The book “Made to Stick: Why Some Ideas Survive and Others Die” by Chip and Dan Heath follows the six principles of sticky ideas. The best business ideas are simple, unexpected, concrete, credible, emotional and make a good story.
If you’re an entrepreneur reading and worrying about only having two out of six sticky ideas, don’t panic. In fact, don’t overthink it at all. Look at the root of your business idea for the answers. A concrete idea will paint a vivid picture of your offerings. An unexpected idea grabs our attention and is refreshing.
You may think you don’t need all six principles, but your business won’t go far without them. It’s an acronym that spells out one word: SUCCES(s).
Your business now has a business plan, legal formation, trademarks, licenses, an RA and sticky ideas. How do you think you stack up against the competition now that you have your ducks in a row? Let’s add on that extra ‘s’ — you’re on your way to success!