4. Test your assumptions. Determine who your perfect customers are. Know everything about them. Talk to them, listen and respond accordingly. Know how many total potential customers there are. Learn if potential customers will want to buy your product or service. Learn about their needs, pain and current solutions. Determine the right price and where buyers expect to make a purchase. Understand what they watch, hear and read. Know how to promote your offering. Understand the competition. Know their value proposition and why people buy their products.
5. Evaluate a product’s viability. Consider the design, development and manufacturing of the perfect solution at the best possible cost. Understand why your solution will be chosen by customers.
6. Evaluate and test a plan to sell your product and collect revenues. Will you sell directly to customers using the Internet, your own sales team or independent reps; will you sell your products to distributors; will you sell to retailers or resellers; will you sell to the government?
7. Determine if you can make a profit. Know your costs, expenses, revenues and margins. Know how much working capital you will need to sustain the business and grow it. Know where you can find money beyond your own resources. Determine if financial resources will be available and committed. Establish a financial system to provide accurate and timely reports to manage the operation.
With positive answers to these initial points, I suggest the following next steps.
Determine your business location; street, city and state.
Name your company. Decide what your firm will be called by clients, vendors, employees and all other entities. Reserve this name for your legal documents and for your Internet website. You do this by contacting the secretary of state, Business Division, to learn if your chosen name is available. At the same time, search the Internet domain names to learn if the name is also available for your use. If available, proceed to register and pay the related fees to secure your ownership of your company name.
Secure a business license and any necessary permits from your local city business office.
Obtain a federal tax ID number, Form SS4, from the IRS. With this information, you will be able to establish an account with a local bank for checking, savings, merchant account and other services.
Meet with an attorney to establish a legal entity. The attorney will give you several options to consider, such as whether you should operate as a sole proprietor, a general partnership, an LLC, an S corporation or a C corporation. He or she will explain to you the risks, responsibilities, costs, liabilities, taxes, duties and reports that are associated with each entity. I also recommend you spend time understanding these various formats via the Internet, which covers in depth what you will need to know. The law office will also prepare articles of incorporation, bylaws, contracts, patents, stock/shares of ownership and provide guidance on company board agendas and minutes, key transactions and state annual reports. In addition, you will be given advice on various labor laws — work hours, safety, breaks, immigrants plus any other legal service you might need.
Meet with an accountant. He or she will help you understand what responsibilities you will have with the IRS; namely, taxes related to the company, yourself and employees. This vendor can also assist with state and federal tax filings. An accountant will also help you with financial reporting and various accounting software options.
Now that you are ready, meaning you have legions of customers who will buy your superior product for the right price yielding good profits, it’s time to act. Yes, act, moving fast, with faith and a determination to overcome every obstacle on your way to greatness. Don’t look back. Keep your eyes on the bright horizon. It’s your time to shine. It’s your future to enjoy. You’re now the boss. Be a great one! Good luck.
This article originally appeared in Alan Hall’s Forbes column.
Alan E. Hall is a co-founding managing director of Mercato Partners, a regionally focused growth capital investment firm. He founded Grow Utah Ventures, is the founder of MarketStar Corp. and is chairman of the Utah Technology Council.