10 Steps to Start a Business
Let’s first start with the most important questions: why do you want to start a business? Are you definitely passionate about the idea? Or is it by necessity?
Getting your own practice can mean a million things: start up? Acquisition? Small animal? Exotics? Equine? Boutique? High touch? Low cost?
Side gigs have countless variations as well: brick and mortar? Online? Franchise?
Whatever you do, doing a market survey is critical, yet often skipped. Who else does something similar, locally, regionally and nationally?
Who is your competition?
Who are your clients?
Why should they use your product or service?
What might happen in a recession?
What will you name your business?
If you need a loan, your bank will likely ask you for a 329847 page business plan that details every moving part of your brilliant idea.
Honestly, most business plans are full of bovine gobbledygook. They contain pretty graphics, crazy projections and made-up facts.
But it’s a required step before you knock on a banker’s door.
If you don’t need a business plan, we would still encourage you to put things in writing. Simply follow our 10-step outline and fill in the blanks, as honestly as possible, so you have a better grasp on the merits of your idea.
Questions to answer include:
- What is your purpose?
- Who is your customer base?
- Do you have access to seed money or a down payment?
- What is your likely overhead?
- Is there market research that proves that you fulfill a need?
- How can you conduct a market survey?
- What is your exit strategy?
How much money do you need to start your business?
The answer ranges from very little to start a relief business, to millions of dollars to open a fancy emergency and referral practice, and everything in between.
Where is that money going to come from? Personal savings? Family millions? A grant? A bank loan? Which bank? Credit cards? Investors? A Small Business Administration (SBA) loan?
Do you have good credit?
How will you live until you make a profit?
Ah… choosing a legal structure…
Which legal entity to choose is one of the most discussed topics by wannabe business owners.
Yet it doesn’t have to be complicated.
It’s worth investing a few hundred dollars to have a lawyer explain the options in your state, and file the proper paperwork perfectly legally.
This is one situation where being stingy can end up being a very costly mistake.
Besides partnerships and corporations, there are 2 basic options:
- Sole proprietorship: here, you are the business. You don’t even need a business name. There is no requirement to file anything legally to start the business.
What you gain in simplicity and cost savings, you lose in legal protection. If someone sues your business, they actually sue you personally.
- Limited liability company (LLC). This is one of the simplest, cheapest and most common structures for small businesses. An important benefit is asset protection. Generally speaking, your personal assets are separate from business assets.
A lawyer will take care of the core documents of your LLC: articles of incorporation, operating agreement, Employer Identification Number (EIN), IRS documents and possibly a business license.
They will then file the required documents with your state. For example, an LLC needs to be officially registered with the state the business is located in.
Again, don’t skimp, and work with a lawyer. We tend to make fun of lawyers, or love to hate them, but they can save you a world of pain (and a lot of money) by keeping you safe.
As soon as you have legal documents, you can open a dedicated checking account. It’s a good idea to do that to keep personal and business funds separate.
Also try to get a dedicated credit card that you can use for your business only.
Next up: you need to protect yourself and your business. The sky is the limit here. What type of insurance you need depends on what type of business you have, and what your risks are.
If you have a practice, you should get professional liability insurance.
You may also need theft, umbrella, fire, workers’ compensation.
The coverage you get will definitely have a price tag. Remember, insurance is expensive… until you need it. Then it becomes the best decision you ever made.
Do you need employees?
At a brick and mortar practice, the answer is obvious.
However, there are a million ways to structure other types of businesses.
You can work with part-timers, virtual assistants, and contractors (lawyer, bookkeeper, CPA etc).
Either way, you need to think about the various moving parts of working with others: training, HR, payroll, employee manual etc.
Under this category, let’s also mention suppliers, which you may or may not need depending on the business you’re in. Suppliers need to be chosen wisely, since the quality of their offer affects you and your customers: distributor, phone system, IT etc.
How much marketing you need depends greatly on the type of business you choose. You may need very little or a huge amount of clever marketing.
In addition, there are countless ways to promote yourself: website, logo, brochures, business cards, flyers, mailers, billboards, print ads, radio ads, TV ads, Instagram ads, Facebook ads, YouTube videos and so much more.
Branding is a bit different. You also need to determine your brand. Questions to answer include:
- What is our Unique Selling Proposition (USP)?
- What are my values?
- What do we stand for?
- Why do we do what we do?
- Who are we catering to?
- What is your reputation?
Are you interested in making millions? Working mornings only? Working 3 days per week? Weekends? Emergencies? 8 weeks of vacation?
How big do you want to grow your business?
It is possible to scale any business to any size. It all depends on what your goals are.
Growth for the sake of growth can seem selfish or futile.
Some business owners are acutely aware of making a difference.
This can take various forms: donations (time, knowledge or money), discounts, helping with a particular cause or project etc.
Being a business owner takes a lot of thought. To be successful, you will need to dedicate time to thinking. It can be during a (bi)yearly retreat, to refine your systems, to tweak your strategy, to brainstorm about strategic planning, to solve problems, to define yearly goals etc.
Business owners are problem-solvers, and your business is no exception.
Launching a business is both scary and thrilling. With the proper guidance from professionals like a lawyer and a CPA, you can focus on the business itself. Enjoy the journey!
Phil Zeltzman, DVM, DACVS
Meredith Jones, DVM
Co-Founders of Veterinary Financial Summit