BACK TO LAST SLIDE

CHAPTER 7: STARTING A NEW

BUSINESS
GROUP 7
 DEREK JOHNSON - is a 20-something problem solver. Solutions that have led him
to become CEO of group SMS (Short Message Service, which makes texting possible)
start-up Tatango and social media agency Derek Media.
Enrolled at the University of Houston Entrepreneurial Program. Derek Johnson
founded Tatango.com in 2007
Tango Voice allows group leaders to record and send voice messages to all mobile
phones in their group, eliminating the need for complex phone.

His advice for starting a business while still in college:

 Identify a problem. “Ask people what keeps them up at night.”•

 Zero in and start small. “Pick a problem people will pay to fix with a product or
service. Find something you can do with minimal capital and human resources and
don’t worry about getting big right away.”•
 Be the best. “If you struggle to come up with a simple, clear answer to the question

INTRODUCTION of what you do best, you need to narrow your focus more.”•
 Do the research. “Fast-track product testing by surveying and selling to students and
using college resources and faculty.”•
 Just do it. “The biggest hurdle is going forward with an idea. A lot of people stop at
the idea point and think too hard about the product and say, ‘I don’t know.’”•
ABOUT START-UPS  Be ready to sacrifice. “You are going to miss out on some of your social life, which
isn’t fun. But when you graduate, you will be doing something you love. I have
worked my ass off to be where I am today and I realize it’s going to take a lot more
ADVANTAGE work to get where I want to go.”

DISADVANTAGE

TYPES OF NEW
BUSINESS
BUSINESSES
 Starting a business from the ground up is more difficult than
buying an existing business or a franchise because nothing is in
place. There is also more risk involved. However, to many
people, the process of taking an idea through all the steps, time,
INTRODUCTION money, and energy needed to become a viable business is the
essence of entrepreneurship. The period in which you create a
ABOUT START- brand-new business is an exciting time. During times of
UPS economic recession with the unemployment rate hovering around
double digits, a term arises called necessary entrepreneurship—
ADVANTAGE people starting businesses because other job opportunities
evaporate.
DISADVANTAGE

TYPES OF NEW
BUSINESS
BUSINESSES
HOME-BASED
 Advantages of Starting from Scratch

INTRODUCTION When you begin a business from scratch, you have the freedom to
mold your new creation into whatever you feel is appropriate. Other
ABOUT START-UPS advantages of starting from scratch include the ability to create your
own distinctive competitive advantage. Many entrepreneurs thrive on
the challenge of beginning a new enterprise. You can feel pride when
ADVANTAGE creating something that didn’t exist before and in realizing your own
goals. The fact that the business is all new can be an advantage in
DISADVANTAGE itself—there is no carryover baggage of someone else’s mistakes,
location, employees, or products. You establish your own image.
TYPES OF NEW
BUSINESS
BUSINESSES
HOME-BASED
STARTING A BUSINESS
 INTRODUCTION Disadvantages of Starting from Scratch
ABOUT START-UPS
The risk of failure is higher with a start-up than with the
ADVANTAGE purchase of an existing business or franchise. You may have
trouble identifying market needs in your area that you are
able to satisfy. You must make people aware that your
DISADVANTAGE business exists—it can be tough to get noticed. Also, you
must deal with thousands of details that you didn’t foresee,
TYPES OF NEW from how to choose the right vendors, to where to put the
BUSINESSES coffeepot, to where to find motivated employees.

BUSINESSES
HOME-BASED
STARTTING A BUSINESS
ON THE SIDE
 No matter what type of business you
INTRODUCTION are starting, your most important
resource is your time. Nothing happens
until you make it happen. You have to
ABOUT START-UPS create and build on the enthusiasm that
will attract others to your idea and your
ADVANTAGE business. In the beginning, the only
thing you have is your vision, and only
you will be responsible for its success.
DISADVANTAGE

TYPES OF NEW
TYPE OF NEW
BUSINESSES BUSINESSES

BUSINESSES 1. LABOR INTENSIVE

2. CAPITAL INTENSIVE
3. E-BUSINESS
HOME-BASED 4. HOME-BASE BUSINESS
STARTTING A BUSINESS
ON THE SIDE
 INTRODUCTION
ABOUT START-UPS LABOR-INTENSIVE CAPITAL INTENSIVE

ADVANTAGE A business that is more A business that depends greatly

dependent on the services of upon equipment and capital for
people than on money and its operations.
DISADVANTAGE equipment.

TYPES OF NEW
BUSINESS

BUSINESSES
E-BUSINESS HOME-BASED BUSINESS

HOME-BASED A business that shares A popular type of business that

information, maintains
STARTTING A BUSINESS customer relationships and
conducts transactions by means
ON THE SIDE of telecommunications
networks.
operates from the owner’s home,
rather than from a separate
location.

FAST GROWTH START-

UPS
 ABOUT START-UPS
ADVANTAGE
DISADVANTAGE

TYPES OF NEW ADVANTAGES DISADVANTAGES

BUSINESS  Control over work hours  Difficulty setting aside long blocks of time
 Informal, cramped, insufficient workspace
 Convenience
BUSINESSES  Ability to care for domestic 
at home
Demands on family members to cooperate
responsibilities(such as children,  Lack of respect (people may think you are
parents, or the household) unemployed or doing this as a hobby)
 Low overhead expenses  Domestic interruptions (houses can get
HOME-BASED  Lack of workplace distractions (co-

noisy and crowded)
Lack of workplace camaraderie (houses
workers popping in, chatting around the can get quiet and lonely)
coffee machine)  Zoning issues
STARTTING A BUSINESS  Decreased commute time
 Tax advantages
ON THE SIDE

FAST GROWTH START-

UPS
EVALUATING
POTENTIAL START-UPS
 ADVANTAGE
DISADVANTAGE

TYPES OF NEW
BUSINESS Many people start businesses while keeping their regular
jobs. Although this approach is generally not
BUSINESSES recommended as a way to enter business, the Bureau of
Labor Statistics estimates that more than 1.2 million
HOME-BASED
people take this step each year.
STARTING A
“Working a full-time job while getting a business off the
BUSINESS ON THE ground may require superhuman organizational skills and
SIDE discipline, yet it can offer some notable advantages.”
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS
QUOTABLE QUOTES
 TYPES OF NEW
BUSINESS
BUSINESSES
Characteristics and patterns of these fast-growth companies:
HOME-BASED
STARTING A BUSINESS 1. They rely on team effort.
2. They’re headed by people who know their line of work.
ON THE SIDE
3. They’re headed by people who have started other businesses.
4. They’re making big bucks.
FAST GROWTH 5. They’re high-tech.
START-UPS 6. They’re better financed—but not by much.
7. They have exit strategies.
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS
QUOTABLE QUOTES
WHERE BUSINESS
IDEAS COME FROM?
 BUSINESS
BUSINESSES
HOME-BASED
STARTING A BUSINESS
ON THE SIDE
The first thing you need to start your own business is an idea. Of
FAST GROWTH START- course, not every idea is automatically a viable business opportunity.
UPS You must be able to turn your idea into a profitable business. How do
you tell when an idea is also an opportunity? Where do people come
EVALUATING up with viable business ideas that are opportunities?
POTENTIAL START-
UPS
BUSINESS IDEAS
QUOTABLE QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
STARTING A BUSINESS
ON THE SIDE
FAST GROWTH START-
UPS
Although there is no shortage of ideas for new and improved
EVALUATING products and services, there is a difference between ideas and
POTENTIAL START-UPS opportunities. Are all ideas business opportunities? No. A
business opportunity is attractive, durable, timely, and
anchored in a product or service that creates or adds value for
BUSINESS IDEAS its buyer or end user. Many ideas for new products and
businesses do not add value for customers or users. Maybe
the time for the idea has yet to come, or maybe it has already
passed.
QUOTABLE QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
 ON THE SIDE
FAST GROWTH START-
Entrepreneurs are fascinated with quotes. Quotes spark
UPS
our creativity, motivate us to action, and inspire us to
EVALUATING greatness. They offer us insights into the spirit behind
POTENTIAL START-UPS innovation and genius. Inspiring quotes can come from
authors, poets, inventors, scholars, and entrepreneurs.
So here are some notable quotes to begin your
BUSINESS IDEAS collection, whether you begin jotting them down on
Post-it notes or grabbing red lipstick and writing them
QUOTABLE across your mirrors.
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
Entrepreneurs are fascinated with quotes. Quotes spark
UPS
our creativity, motivate us to action, and inspire us to
EVALUATING greatness. They offer us insights into the spirit behind
POTENTIAL START-UPS innovation and genius. Inspiring quotes can come from
authors, poets, inventors, scholars, and entrepreneurs.
So here are some notable quotes to begin your
BUSINESS IDEAS collection, whether you begin jotting them down on
Post-it notes or grabbing red lipstick and writing them
QUOTABLE across your mirrors.
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS window of opportunity
IDEAS COME FROM?
CREATIVE RELEASE A period of time in which an
IMPORTANCE OF opportunity is available.
PLANNING TO START-
UPS
START-UP COST
 ON THE SIDE
FAST GROWTH START-
UPS
EVALUATING PRODUCT LIFE CYCLE
POTENTIAL START-UPS Stages that products in a marketplace pass through hover time.

BUSINESS IDEAS

QUOTABLE
QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
FAST GROWTH START-
UPS
EVALUATING Where Business Ideas Come From
POTENTIAL START-UPS
Creativity is important to small business success.
The Network Solutions Small Business Success Index provides data
on where owners get their ideas. Not surprisingly, customers
BUSINESS IDEAS provided business ideas for over two-thirds. Other sources included
newspapers and trade journals, competitors, and employees19 (see
QUOTABLE QUOTES Figure 7.3).

WHERE BUSINESS
IDEAS COME FROM?

CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
EXPECTED EXPENSES
HOW WILL YOU
FAST GROWTH START-
UPS
EVALUATING
POTENTIAL START-UPS

BUSINESS IDEAS
QUOTABLE QUOTES

WHERE BUSINESS
IDEAS COME FROM?

CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS
START-UP COST
EXPECTED EXPENSES
HOW WILL YOU
FAST GROWTH START-
UPS
PRIOR WORK EXPERIENCE
EVALUATING Experience can be a wonderful teacher. Working for someone else in your area of interest can help you avoid
POTENTIAL START-UPS many errors and begin to build competitive advantages. It gives you the chance to ask yourself, “What would
I do differently if I ran this business? ”One start-up may even lead to another. Seeing opportunities for new
ventures after starting the first business is known as the corridor principle. Entrepreneurs start second, third,
and succeeding businesses as they move down new venture corridors that did not open to them until they got
BUSINESS IDEAS into business.

QUOTABLE QUOTES
HOBBIES AND AVOCATIONS
WHERE BUSINESS Turning what you do for pleasure into a part-time or full-time business is a possibility that you should
IDEAS COME FROM? consider. It helps ensure that your business will be one that you enjoy and understand. If you enjoy fishing,
could you potentially use your skills to become a guide? If you love pets, could you channel your affections
into a dog-grooming or pet-sitting business?

CREATIVE RELEASE
IMPORTANCE OF
CHANCE HAPPENING (SERENDIPITY)
PLANNING TO START-
UPS Serendipity means finding something valuable that you were not looking for. Sometimes business
opportunities come to you unexpectedly. The ability to recognize them takes an open mind, flexibility, a
START-UP COST sense of adventure, and good business sense.

EXPECTED EXPENSES
HOW WILL YOU
 EVALUATING
POTENTIAL START-UPS
CREATIVE RELEASE
BUSINESS IDEAS Once you have your business up and going (because of your creativity), how do you keep
yourself and others in your business creative? Creativity is a matter of providing the proper
QUOTABLE QUOTES
business environment—your key to sustaining a competitive advantage. Almost every business
has a creative pool with potential that is greater than its performance. How do you provide a
WHERE BUSINESS spark that keeps your company’s employees motivated and competitive?
IDEAS COME FROM?  Engage employees from all departments in brainstorming sessions.
 Set aside time to deliberately evoke creativity.
CREATIVE  Add a creative exercise to meeting agendas.

RELEASE  Study creativity.

 Encourage and enable employees to pursue outside interests.
IMPORTANCE OF  Create inspiring work space.
PLANNING TO START-
 Fund extracurricular projects or classes.
UPS
 Try to fail quickly. Once you find a good idea, don’t move halfheartedly.
START-UP COST
EXPECTED EXPENSES
HOW WILL YOU
COMPETE?
 BUSINESS IDEAS
Before you launch your business, you should write a comprehensive business plan
QUOTABLE QUOTES (see Chapter 4). A business plan not only helps you determine the direction of your
business and keeps you on track after it opens but also will be required if you need to
WHERE BUSINESS borrow money to start your business. It shows your banker that you have seriously
IDEAS COME FROM? evaluated the business opportunity and considered how you will be able to pay back
the loan.
CREATIVE RELEASE
In addition to writing your business plan, you need to decide and record other
IMPORTANCE OF important steps in starting your business.
PLANNING TO START-  Market analysis.
UPS  Competitive analysis.
 Start-up costs.
START-UP COST
EXPECTED EXPENSES  Capital equipment assets.
 Legal form of business.
HOW WILL YOU
COMPETE?
ENTREPRENEURIAL
SNAPSHOT
 QUOTABLE QUOTES
WHERE BUSINESS
IDEAS COME FROM?
CREATIVE RELEASE
IMPORTANCE OF
PLANNING TO START-
UPS

START-UP COST
EXPECTED EXPENSES

HOW WILL YOU

COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
IDEAS COME FROM?
CREATIVE RELEASE
Before you begin your small business, consider what you want to be known for. Because no
IMPORTANCE OF business can be all things to all people, you need to determine what your customers value and
PLANNING TO START- then strive to exceed their expectations. For instance, if your customers value low prices, you
UPS must set up your business to cut costs wherever possible, so that you can keep your prices low.
If your customers value convenience, you need to set up your business with a focus on
START-UP COST providing speed and ease of use for them. In providing value to your customers, we can identify
EXPECTED EXPENSES three grounds on which companies compete: operational excellence, product leadership, and
customer intimacy

HOW WILL YOU

COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
IDEAS COME FROM?
CREATIVE RELEASE
Product
Operational Customer
IMPORTANCE OF excellence
leadership
intimacy
PLANNING TO START- (high quality)
(low price) (service)
UPS
START-UP COST
EXPECTED EXPENSES

HOW WILL YOU

COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
IDEAS COME FROM?
CREATIVE RELEASE
Product
Operational Customer
IMPORTANCE OF excellence
leadership
intimacy
PLANNING TO START- (high quality)
(low price) (service)
UPS
Companies that pursue
START-UP COST operational excellence know
that their customers value low
EXPECTED EXPENSES prices, so they concentrate on
the efficiency of their
operations in an effort to hold
HOW WILL YOU down costs. They don’t have the
very best products or cutting-
COMPETE? edge innovations. Instead, they
strive to offer good products at
the lowest price possible. Dell
ENTREPRENEURIAL Computer is an example of a
company that competes on
SNAPSHOT operational excellence.

CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
IDEAS COME FROM?
CREATIVE RELEASE
Product
Operational Customer
IMPORTANCE OF excellence
leadership
intimacy
PLANNING TO START- (high quality)
(low price) (service)
UPS
Companies that are product
START-UP COST leaders constantly innovate to
make the best products
EXPECTED EXPENSES available even better. This kind
of commitment to quality is not
inexpensive, but product
HOW WILL YOU leaders know that price is not
the most important factor to
COMPETE? their customers. New Balance
athletic shoes are known for
their technical excellence, not
ENTREPRENEURIAL for their inexpensive price or
their customer service.
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
IDEAS COME FROM?
CREATIVE RELEASE
Product
Operational Customer
IMPORTANCE OF excellence
leadership
intimacy
PLANNING TO START- (high quality)
(low price) (service)
UPS
Companies that focus on developing
START-UP COST customer intimacy are not looking for
a one-time sale. Rather, they seek to
EXPECTED EXPENSES build a long-term, close working
relationship with their customers.
Their customers want to be treated as

HOW WILL YOU if they are the company’s only

customers. The Lands’ End operator

COMPETE? you speak with on the telephone sees

records of clothing sizes, styles, and
colours from your previous orders as
ENTREPRENEURIAL soon as you call. Customer-intimate
companies offer specific rather than
SNAPSHOT general solutions to their customers’
problems.
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
IDEAS COME FROM?
CREATIVE RELEASE
Product
Operational Customer
IMPORTANCE OF excellence
leadership
intimacy
PLANNING TO START- (high quality)
(low price) (service)
UPS
START-UP COST
EXPECTED EXPENSES

HOW WILL YOU

COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
 IMPORTANCE OF
PLANNING TO START-
UPS THOMAS EDISON
START-UP COST
EXPECTED EXPENSES
HOW WILL YOU
COMPETE?

ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
INDEPENDENT
CONTRACTORS
 IMPORTANCE OF
PLANNING TO START-
UPS ENTREPRENEURIAL SNAPSHOT
START-UP COST
does not end with the sale of your
omerEXPECTED EXPENSES
service and adopting
ndeavours,
HOW especially
WILLinYOU an industry
tisfying the customer is not a means Über Inventor—Old School
COMPETE? In a chapter on starting a business from scratch based on innovation, it seems appropriate to profile one of the greatest inventors of all time—
ce can be your competitive Thomas Edison. Born in 1847, Edison had very little formal education. In fact, he was homeschooled by his
s providing an emphasis on the mother.
The list of inventions and companies that Edison created is far too long to fully discuss here, but his 1,093 patents remain a record. Go to
stated. Very often the difference
ENTREPRENEURIAL http://inventors.about.com/library/inventors for a description of all his patents.
Edison’s first patent was for an “electrographic vote-recording machine” to be used in the House of Representatives to end long sessions of
in it—and the way they treat
SNAPSHOT filibustering and expedite the political process. Members of Congress were amazed by the technology but ultimately rejected the invention.
Edison then vowed to never again anything that was neither practical nor marketable. That approach made Edison more of an entrepreneur
than an inventor—inventors are typically more interested in seeing what they can make rather than what will sell.
Contrary to popular belief, Edison did not “invent” the light bulb. Instead, he improved upon a 50-year-old idea to develop the first device
CUSTOMER SERVICE that was even remotely practical for home use. Imagine the challenge he faced in bringing his works to market. To make money from
incandescent lighting, for example, he had to first develop the following:
LICENSES, PERMITS, • The parallel circuit
• A durable light bulb
AND REGULATIONS • An improved dynamo
• The underground conductor networks

TAXES • Devices for maintaining constant voltage

• Safety fuses and insulating materials, and light sockets with on-off switches
Fortunately, Edison did consider the market value of his inventions. For example, he founded General Electric, he created the first motion
IRS FORMS pictures, and he made the first sound recording. Remember his many contributions as you listen to MP3s while on your way to see the latest
action-adventure movie.
INDEPENDENT
CONTRACTORS
 UPS
START-UP COST CUSTOMER SERVICE
EXPECTED EXPENSES
HOW WILL YOU Your business relationship with your customers does not end with the sale of your
COMPETE? product or service. Increasing your level of customer service and adopting
professional standards in this area are critical endeavours, especially in an industry
ENTREPRENEURIAL where all competitors appear to be the same. Satisfying the customer is not a means
SNAPSHOT to achieve a goal—it is the goal. Customer service can be your competitive
advantage. The importance of a start-up business providing an emphasis on the
CUSTOMER highest-quality customer service cannot be overstated. Very often the difference
between one business and another is the people in it—and the way they treat
SERVICE customers.
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
 START-UP COST
EXPECTED EXPENSES
LICENSES, PERMITS, REGULATIONS
HOW WILL YOU
COMPETE?
does not end with the sale of your If your business has no employees, you have fewer legal requirements to meet. First,
omerENTREPRENEURIAL
service and adopting let’s look at the common requirements for all businesses. You need to file your
ndeavours,SNAPSHOT
especially in an industry business name with the secretary of state of the state in which you are forming your
tisfying the customer is not a means business. This step ensures that the name you have chosen for your business is not
CUSTOMER SERVICE
ce can be your competitive registered by another company. If it is, you will have to find another name for your
ss providing an emphasis on the business. You must obtain the appropriate local licenses from the city hall and
stated. Very often thePERMITS,
LICENSES, difference county clerk’s office before you start your business. Find out if you can operate your
in it—and the way they treat business in the location you have picked by checking local zoning ordinances. You
AND REGULATIONS
may need a special permit for certain types of businesses. For example, if your
business handles processed food, it must pass a local health department inspection.
TAXES
IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
 HOW WILL YOU
COMPETE? TAXES
ENTREPRENEURIAL
SNAPSHOT When your business begins operation, you must make advance payments of your estimated
CUSTOMER SERVICE federal (and possibly state) income taxes. Individual tax payments are due in four quarterly
installments—on the fifteenth day of April, June, September, and January. It is important that
LICENSES, PERMITS, you remember to set money aside from your revenues so that it will be available when your
AND REGULATIONS quarterly taxes are due. The Internal Revenue Service is not known for its sense of humor if
funds are not available.
When your business begins operation, you must make advance If your business is a sole

TAXES proprietorship, you report your self-employment income on IRS Form 1040 Schedule C or C-
EZ, or Schedule F if your business is farming. A partnership reports partnership income on
IRS Form 1065, and each partner reports her individual share of that income on Schedule SE
IRS FORMS and Schedule E. Corporations file tax returns on IRS Form 1120. Any payment in excess of
$600 made for items like rent, interest, or services from independent contractors must be
INDEPENDENT shown on Form 1096, and copies of Form 1099 must be sent to the people you paid.
CONTRACTORS
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL If your
SNAPSHOT business is a
sole
CUSTOMER SERVICE
proprietorshi
LICENSES, PERMITS, p, you report
AND REGULATIONS your self-
employment
TAXES income on
IRS Form
1040
IRS FORMS Schedule C
or C-EZ, or
Schedule F if
INDEPENDENT your
CONTRACTORS business is
farming.
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES

IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES

IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL A partnership
SNAPSHOT reports
partnership
CUSTOMER SERVICE
income on IRS
LICENSES, PERMITS, Form 1065, and
AND REGULATIONS each partner
reports her
TAXES individual share
of that income
on Schedule SE
IRS FORMS and Schedule
E.

INDEPENDENT
CONTRACTORS
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES

IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
 COMPETE?
ENTREPRENEURIAL
Corporations file
SNAPSHOT
tax returns on IRS
CUSTOMER SERVICE Form 1120.

LICENSES, PERMITS,
AND REGULATIONS
TAXES

IRS FORMS
INDEPENDENT
CONTRACTORS
EXIT SLIDE
ENTREPRENEURIAL
SNAPSHOT
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS If a person provides services to
your business but is not an
INDEPENDENT employee, he is considered to be
CONTRACTOR an independent contractor.

EXIT SLIDE
CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
Personalize
INDEPENDENT
CONTRACTOR
Settings

EXIT SLIDE Shut down

CUSTOMER SERVICE
LICENSES, PERMITS,
AND REGULATIONS
TAXES
IRS FORMS
INDEPENDENT
CONTRACTOR Are you sure you want to
end the presentation?

EXIT SLIDE Yes No

THANK YOU FOR LISTENING!

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