STARTING A BUSINESS ALL-IN-ONE FOR DUMMIES

659 Pages·2022·15.766 MB·English

by  GEORGETTE C. BEATTY

Starting a Business
A L L - I N - O N E
01_9781119868569-ffirs.indd i Trim size: 7.375 in × 9.25 in February 25, 2022 1:43 PM
01_9781119868569-ffirs.indd ii Trim size: 7.375 in × 9.25 in February 25, 2022 1:43 PM
Starting a Business
A l l - I N - O N E
3rd Edition
by Kathleen R. Allen, PhD; Peter Economy;
Paul and Sarah Edwards; Lita Epstein;
Alexander Hiam; Greg Holden; Peter Jaret;
Jeanette Maw McMurtry, MBA;
Joyce Mazero; Jim Muehlhausen, JD;
Bob Nelson, PhD; Steven D. Peterson;
Jim Schell; Barbara Findlay Schenck;
Michael H. Seid; John A. Tracy, CPA;
Tage C. Tracy, CPA; and Eric Tyson, MBA
01_9781119868569-ffirs.indd iii Trim size: 7.375 in × 9.25 in February 25, 2022 1:43 PM
Starting a Business All-in-One For Dummies®, 3rd Edition
Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com
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Published simultaneously in Canada
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Library of Congress Control Number: 2022933659
ISBN 978-1-119-86856-9 (pbk); ISBN 978-1-119-86857-6 (ebk); ISBN 978-1-119-86859-0 (ebk)
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Contents at a Glance
Starting a Business All-in-One
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Book 1: Moving from Idea to Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CHAPTER 1: Your Business in Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
CHAPTER 2: Refining and Defining Your Business Idea . . . . . . . . . . . . . . . . . . . . . . . . . 27
CHAPTER 3: Creating a Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
CHAPTER 4: Finding Your Target Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
CHAPTER 5: Considering a Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Book 2: Planning for Your Business . . . . . . . . . . . . . . . . . . . . . . . . . . 101
CHAPTER 1: Writing a Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
CHAPTER 2: Finding the Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
CHAPTER 3: Setting Your Franchise’s Wheels in Motion . . . . . . . . . . . . . . . . . . . . . . . 135
CHAPTER 4: Starting a Home-Based Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
CHAPTER 5: Creating an Online Presence for Your Business . . . . . . . . . . . . . . . . . . . 193
CHAPTER 6: Starting with the Right Legal Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Book 3: Handling Your Finances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
CHAPTER 1: Setting Up the Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
CHAPTER 2: Reporting Profit or Loss in the Income Statement . . . . . . . . . . . . . . . . . 257
CHAPTER 3: Reporting Financial Condition in the Balance Sheet . . . . . . . . . . . . . . . 281
CHAPTER 4: Reporting Cash Sources and Uses in the Statement of Cash Flows . . .305
CHAPTER 5: Controlling Costs and Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
CHAPTER 6: Satisfying the Tax Man . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363
Book 4: Managing Your Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
CHAPTER 1: Tackling the Hiring Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383
CHAPTER 2: Setting Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
CHAPTER 3: Embracing Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . 415
CHAPTER 4: Managing with Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425
CHAPTER 5: Delegating to Get Things Done . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433
Book 5: Marketing and Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . 445
CHAPTER 1: Optimizing Your Marketing Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
CHAPTER 2: Laying a Foundation for Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
CHAPTER 3: Taking Stock of Your Business Image . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485
CHAPTER 4: Forging Your Brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499
CHAPTER 5: Creating Marketing Communications That Work . . . . . . . . . . . . . . . . . . 515
CHAPTER 6: Social Marketing: Facebook, Twitter, Instagram, LinkedIn,
and Pinterest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533
Book 6: Staying in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545
CHAPTER 1: Developing Employees through Coaching and Mentoring . . . . . . . . . . 547
CHAPTER 2: Keeping Your Customers Loyal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563
CHAPTER 3: Cultivating a Growing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593
Table of Contents
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
About This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Foolish Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Icons Used in This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Beyond the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Where to Go from Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
BOOK 1: MOVING FROM IDEA TO REALITY . . . . . . . . . . . . . . . . . . . 5
CHAPTER 1: Your Business in Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Getting an Overview of Feasibility Analysis . . . . . . . . . . . . . . . . . . . . . . . . 8
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Business concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Industry analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Market/customer analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Genesis or founding team analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Product/service development analysis . . . . . . . . . . . . . . . . . . . . . . . 10
Financial analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Feasibility decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Timeline to launch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Understanding Your Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Using a framework of industry structure . . . . . . . . . . . . . . . . . . . . . . 12
Deciding on an entry strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Researching an Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Checking out the status of your industry . . . . . . . . . . . . . . . . . . . . . . 17
Competitive intelligence: Checking out the competition . . . . . . . . . 18
Defining Your Market Niche . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Narrowing your market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Developing a niche strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Zeroing In on a Brand-New Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Becoming an inventor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Teaming up with an inventor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Licensing an invention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
CHAPTER 2: Refining and Defining Your Business Idea . . . . . . . . . . 27
Recognizing the Power of a Good Idea . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Knowing the difference between passion and profitability . . . . . . 28
Turning a side gig into a business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Planning ahead: Great ideas take time . . . . . . . . . . . . . . . . . . . . . . . 30
Checking out the competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table of Contents vii
Brainstorming New Business Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Reimagining your business environment . . . . . . . . . . . . . . . . . . . . . 32
Inspiring team creativity (with or without donuts or bagels) . . . . . 34
Identifying Business Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Tuning in to what customers have to say . . . . . . . . . . . . . . . . . . . . . 36
Pursuing changes that open up new opportunities . . . . . . . . . . . . . 37
Narrowing your choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Putting a Promising Idea to the Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Doing your first reality check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Anticipating disruptive innovations: Opportunities
and cautions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Getting a second opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Conducting a self-appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
CHAPTER 3: Creating a Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Identifying Who Needs a Business Model . . . . . . . . . . . . . . . . . . . . . . . . 46
Assessing Common Aspects of All Business Models . . . . . . . . . . . . . . . 47
Understanding Business Models in Their Simplest Form . . . . . . . . . . . 49
Checking Out Examples of Business Models . . . . . . . . . . . . . . . . . . . . . . 50
Finding Success with a Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Making money with your own secret sauce . . . . . . . . . . . . . . . . . . . 53
Examining different business models in the same industry . . . . . . 56
Setting yourself apart from the competition . . . . . . . . . . . . . . . . . . . 57
Considering your competitive advantage . . . . . . . . . . . . . . . . . . . . . 58
Obtaining your competitive advantage . . . . . . . . . . . . . . . . . . . . . . . 58
Enhancing your competitive advantage . . . . . . . . . . . . . . . . . . . . . . . 60
CHAPTER 4: Finding Your Target Market . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Gauging the Target Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Determining Industry Attractiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Finding the best industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Working in unserved or underserved markets . . . . . . . . . . . . . . . . . 68
Looking for Niche Attractiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Know the power of a good niche . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Unlimited niches exist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Markets have a habit of splitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Find unserved or underserved markets . . . . . . . . . . . . . . . . . . . . . . . 72
Checking Out Customer Attractiveness . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Finding Your Place on the Industry Value Chain . . . . . . . . . . . . . . . . . . . 75
CHAPTER 5: Considering a Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Understanding What a Franchise Is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Playing by brand standards to create consistency . . . . . . . . . . . . . . 80
Setting your sights on success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
viii Starting a Business All-in-One For Dummies