In the midst of creating and changing the business plan, here are some things we did to get things moving.
1) Advisory Board. This was both selfish and strategic. As Kathleen and I mused about the people in our lives that would be the most supportive and knowledgeable, we asked them to join our AB. This gave us four more brilliant women to bounce ideas off of and delegate work to. With each one specializing in a different leg of the retail universe, we’ve gotten some great feedback and suggestions from them. Also, instead of two women under 30 asking for business loans, etc., we became a team of six, with a combined 100 years in retail management/ownership, including an MBA.
2) Operational funds. Although you may not need a ton of money, yet, you do need some. We were incredibly lucky and acquired two investors early. Keep reading; I’ll tell you what to do with your money, however much you have to spare.
3) Talk finances early. Not only is it incredibly important to talk money with each other, it’s important to start your relationship with the bank. Go to any commercial lender and ask about small business loans. Banks WANT to loan you money and they want you to be successful. We picked our bank because of the SCORE/SBC classes at SCC and the contacts we met through the program. Meeting with the commercial loans department and understanding their process is instrumental. They’ll explain what the loan process is like, what the options are, and what they’ll need from you. Completing financial statements materializes everyone’s strengths and weaknesses and maps out a course of action. What follows could take as much as a year to navigate, so doing this early saves a lot of time. The more people you have on the note, the more people that must be aligned to form a strong borrowing-team. Open an account that day and drop in whatever cash you have dedicated for the business. This becomes your operational funds.
4) Get a lawyer. This guy knows his stuff and that’s the kinda guy you need! Kathleen and I set up contracts between each other, between ourselves and the investors, certificates of stock/ownership, and filed the business with the state in order to have our Tax ID Number. This number is like a Social Security Number for businesses and allows you to operate, buy wholesale, file taxes, etc. I didn’t understand it at the time, but our lawyer also suggested we set up a Po Box for the business to help create separation between ourselves and the business. But three potential retail spaces later, it was the best $116 (for 6 months) we ever spent. When everything else starts to spin like a tornado, changing address information is the last thing on your mind. He also suggested that we deposit funds into our business account to reflect the ownership of the business partners. All of these small details create distinct separation between you and the business. If there are four people involved with equal share and you can swing $1,000, pitch in $250 each and deposit into the business account. This way, each person has the same amount of “skin in the game” as their value of the shares of the company. The IRS loves that.
5) Get a CPA. I met my CPA many years ago as I developed my Mary Kay business. Over that time, I knew (on a small scale) what they liked to see. I met with them to talk about the new project to make sure we were all on the same page. They discussed every business model and the characterizes of each. Between what we learned from our lawyer and the CPA, we chose LLC filing as an S-Corp. Basically, we wanted separation between personal tax returns and the business tax returns. Opening that bank account and operating out of that account streamlines everything for the CPA and validates your operations. This creates clear intention with the IRS. Keeping every invoice/receipt and an organized checkbook register saves hours of time (and money).
7) Get a Realtor. Now, this is when it starts getting real. Opening a business isn’t just about the plan and the money; its cornered in the WHERE. Where will you be successful; where is there adequate parking, ramps, windows? Where can you afford to be? Where does your target audience go? How do they get there and where are they going afterwards? Your realtor has all the answers and is paid only when he or she finds the perfect fit for you, so answering all your prayers is their only desire. They’ll also keep you out of all the trouble you didn’t even know was lurking about as they have the inside line on building history, good or bad landlords, etc. Find one that knows your area and has a true appreciation and understanding of your business.
6) Stay flexible. Using your resources will be like a game of Twister. In one day, you might ask all of them the same question and get a variety of advice and answers. The right answer is whatever works for you. We use our whole professional team like one unit as they all have the same goal, despite their varying expertise.