This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.
Ask Google "how to start a business" or "tips for starting a business" and it will answer with roughly 2 billion and 186 million results, respectively.
There are exceptions to every rule but here are a few solid things you should know and keep in mind that will apply to most small businesses, particularly sole proprietorships and limited liability companies (LLCs).
1. How to decide on a business name
Most people know that part of starting a business is choosing a name. Be mindful though, that there’s a bit more to picking a name than simply picking something you like.
It’s okay to use clever spellings or a play on words, but make sure you don’t confuse people. Also, don’t feel obligated to choose a name that makes it clear what your company does (or sells). You can always choose a tagline or slogan that makes your products or services a little more explicitly clear.
Once you have a good solid list together, check which names have available domains (you can check the availability of domain names using ICANN's WHOIS lookup).
If the .com level domain is still available, there’s a very good chance the name isn’t trademarked and no one else is currently using it. However, it’s not a bad idea to also run a quick check of the United States Patent and Trademark Office and the Trademark Electronic Search System (TESS) as well.
One quick note about domain names: regardless of whether or not you plan to build a business website right away, we strongly recommend grabbing the .com extension containing your business name, and one or both of the other top level domain extensions (.org and .net).
2. You can't be everything to everyone
Focus on your core services and/or products, especially in the first year you're in business. Offering too much, too fast, will make it difficult to market your strengths and build a good customer base.
Keep a running list of services or products you’d like to start offering in the future, and roll them out once you’re comfortable with your core services or products.
Join Freelancers Union (it's free!)
3. The best leads are from people you already know
Many of your first clients, or customers, are going to be people you know. This is especially true for service based businesses. And guess what? That's okay!
Working for people you already know will help create "word of mouth" waves and eventually lead to referrals. It will also help build your portfolio, which makes your business more marketable to other clients. Reach out to friends, family, former coworkers or colleagues and let them know what you're up to.
When someone sends you a referral, send them a card acknowledging and thanking them. A small gift card (can’t go wrong with Amazon) is a nice touch too, if finances permit. If you want to do something a little more robust, let your clients know they'll receive a credit to their account for referrals they send your way.
CAUTION: Creating a robust referral program is best for companies that have been around long enough to have steady financials. I strongly recommend waiting at least a year before you establish anything formal.
Once a formal referral program is established, it’s very difficult to take it away. You don’t want to get into a situation where you’re paying out money that you really need to hold on to in order to build up a “rainy day fund.”
4. Evaluate your prices often
This one cannot be said enough. It's possible (probable, even) that you will need to make several adjustments to your prices during your first 6-12 months in business.
Figure out what your overhead expenses are for a product or service, factor in other expenses such as vacation/sick time, software (eg accounting software such as Quickbooks or Freshbooks, Microsoft Office, Adobe Creative Cloud, etc.), office supplies, rent (if applicable). Don't forget your personal expenses such as health care, taxes, and time off for sick days or vacation.
One mistake I see people make all the time is only considering what a product cost them to make. Customers aren't only paying you for the service (or product) they're getting, they're also paying for the years of experience you have in the industry and your ability to provide the good(s) or service(s).
CAUTION: Be careful how you apply new price structures to returning clients. Especially when you’ve increased prices substantially. You don’t want them to get price shock. This is one of the few instances where a business should apply discounts liberally.
5. When it comes to your website, you get what you pay for
The old adage is true. Pick any two of the following: good, cheap, fast. More often than not, the only two readily available options are going to be "good and fast," or "cheap and fast."
While it may be tempting to go fast and cheap with your website design, I highly recommend investing time and money to come up with something good.
With 75% of people judging the credibility of a company based on the design of its website according to Stanford University, your website is one thing you can’t afford to skimp on.
6. Don't discount your prices
Discounting leads to the devaluation of your services and products.
If the majority of your business relies on referrals, your prospects will expect the same rates as the client who referred them to you. This can create a vicious cycle of discount prices.
Instead of discounting, offer added value. This one is easier to do for service based businesses, but product based businesses can do it too.
For product based businesses, think about perhaps offering to ship the product for free, or offering a coupon for 10% off on a future purchase.
What are some tips you would give to those looking to start their own business? Let us know in the comments.
Terry Carter has nearly ten years of website development and design, and digital marketing experience. He launched 9pmStudios.com to help small businesses and non-profit organizations build a meaningful online presence backed by creative and effective online marketing strategies.