When it comes to online selling, it can be difficult to keep up with new developments in the market. eCommerce is an ever-expanded industry, with new players entering the game every year. And with new competition and technology come new ways of marketing, selling, and fulfilling orders.
In this article, we’ll break down a few of the major trends we’ve noticed in 2020. We’ll explain each trend, demonstrate its popularity, and then give you some actionable steps to implement it in your own business model. Take advantage of these new ideas to stay up to date with emerging selling strategies and make sure your brand is always keeping up with the competition!
Here are the 10 biggest eCommerce trends for 2020.
1) Increase In Online Sales
Fortunately, one of the most important trends of this year is the steady increase that we will continue to see in online sales! According to data from Statista, in Q4 of 2019, eCommerce’s total share of the US retail market increased by 11.2% compared to the previous quarter. We expect online sales to continue increasing, with total annual sales projected to reach $419.9 billion, up from $365.2 billion in 2019.
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The Covid-19 pandemic has only served to cement the notion that online sales are the future of our economy. Many businesses have been forced to sell and accept payments online, or set up online ordering and delivery services just to stay alive during the shelter-in-place orders and social distancing restrictions. We have an entire hub of small business resources for people struggling to survive the coronavirus intact. There, you’ll find information about keeping your staff on with PPP loans, reaching customers virtually through social media and email marketing, setting up a webstore for the first time, and more.
These are encouraging projections for online sellers! eCommerce sales have been increasing steadily for years, and you want to make sure your business gets a cut of the pie. So, keep looking for ways to increase the impact of your online marketing. Test new promotions, create motivating email marketing campaigns, and optimize your site for web traffic. For more recommendations on increasing online sales on your own store, try our article 7 Strategies To Increase Your eCommerce Sales.
2) Household Goods Are Up In Sales
During the current coronavirus (COVID-19) crisis, we’ve witnessed a change in the way people shop. Many customers now express feelings of anxiety around a typical grocery store trip, comparing preparing for a shopping trip to suiting up for battle.
Some customers are now choosing to avoid the grocery store altogether, opting instead to order their household products online. According to a study by Ipsos from March of 2020, 23% of U.S. respondents said they were buying more of their household purchases online instead of in-store. For comparison, 42% of respondents said there had been no change in their online shopping habits, 12% said they had made fewer online purchases, and 23% never made online purchases of these goods at all.
The takeaway here is particularly relevant to those who already sell household products: if you haven’t begun selling online, now is the time to start. For those who do not yet sell household goods, you might consider stocking and advertising in-demand products–cleaning products, self-care products, and other non-perishable items. Make sure your customers know that they can look to you for the products they would typically buy in-store.
3) Mobile Shopping Is Preferred
Since the development of smartphones, mobile devices have had a growing impact on eCommerce. For many years, customers preferred to browse on mobile devices (smartphones and tablets), but they returned to a desktop or laptop computer to make their final purchase. In 2020, however, it is possible that mobile purchases will outnumber computer purchases for the first time!
We’ve known that mobile traffic has played a large role in eCommerce for years. As of Q1 2019, 64% of all online shopping traffic came from mobile devices. What is surprising is that this same quarter, mobile purchases accounted for 46% of total eCommerce orders, for the first time on par with purchases made on a computer!
With this in mind, it is absolutely crucial that your online store is mobile-friendly (meaning that it adapts to screens of all sizes). It should be easy to browse on a small screen, with simple headers, search tools, and filtering features.
What’s more, your mobile checkout needs to work seamlessly–complicated checkout can cost you sales! According to one study by the Baymard Institute, out of a pool of customers who had abandoned an online sale in the last months, 21% had abandoned the purchase because the checkout process was too long or complicated. Make sure your checkout only asks customers for the key information: name, email address, and shipping and billing information. You can create a membership/login process, but it’s vital that you allow people to check out as guests as well. Keep the full checkout process to as few steps as possible, and snag those mobile sales!
4) Subscription Purchases Are Trending
You’ve likely seen plenty of subscription boxes advertised online. The Dollar Shave Club, FabFitFun, and BarkBox are just a few examples of popular subscription services. These subscriptions make customers feel like they’re buying themselves a gift, and it works. AÂ 2019 survey from Clutch shows that 54% of respondents who shop online say they are members of a subscription box service.
It isn’t hard for your business to jump on board with this trend. Many online stores are naturally suited to starting up a subscription service. If you sell wine, a wine of the month club would be a natural application. If you sell cosmetics or beauty products, try compiling your own surprise subscription boxes. These boxes are a great way to introduce customers to new products, move some older inventory, and ensure regular purchases.
But even businesses that don’t sell glamorous products can benefit from creating subscription offers. If you sell consumable products that customers purchase regularly–think toiletries, natural cleaning supplies, or pet food–you have a great market for subscription purchases. Customers will appreciate the automatic re-ordering process, especially if you give them the flexibility to start and stop shipments at any time.
Finally, if you choose to set up subscription boxes as an option on your site, make sure you have a payment method with recurring billing features. Take a look at our full article on recurring billing for more information.
5) Ethical & Sustainable Consumerism Is On The Rise
This year, retailers should expect consumers to become increasingly conscientious in their purchasing habits. Today’s consumers are more careful than ever in their purchasing, favoring products and businesses with ethical and sustainable practices. According to a Nielson survey in 2018, 81% of global respondents feel strongly that companies should help improve the environment.
As you consider implementing better environmental practices in your own business, I suggest you start by rethinking your packaging. How you package your products and shipments can leave your customers with a big impression, either positive or negative. Good environmental practices include using recycled plastics and cardboard, as well as packaging your products in the smallest boxes possible. Shipping your products in smaller boxes not only uses less cardboard, but it also takes up less space in a delivery truck, meaning it takes less gas to deliver.
Whatever environmental and ethical practices you decide on, make sure you advertise that information. Of course, it’s always good to be environmentally responsible; but, it’s only going to increase your sales if you let customers know how you’re reducing your footprint.
6) Free Shipping Is A Must
The words “free shipping” are every customer’s favorite phrase and every online seller’s biggest challenge.
Retail giants like Amazon and Walmart have made free shipping an expectation for many customers. The National Retail Federation’s Consumer View report in January 2019 showed that 75% of consumers surveyed expected free shipping, even on orders under $50. What’s more, 29% of interviewed consumers had abandoned a purchase because two-day shipping wasn’t free.
This is a huge burden for smaller online retailers. As all online sellers know, “free shipping” is never free, and offering free shipping on the wrong orders can completely eliminate your profit margins (sometimes even causing you to lose money on a sale!).
That’s why it’s important for sellers to be strategic about the ways they offer free shipping. You might choose to set order totals that customers must reach in order to earn free shipping (i.e. “Free shipping on orders over $50!”). Or, you could offer free shipping on every purchase, but then raise their product prices to account for the shipping costs. Alternatively, you could offer free shipping as a limited-time promotion when customers sign up for your newsletter. There are many options to consider! For more recommendations, take a look at our articles 8 Hacks For Saving On Shipping Costs and 7 Strategies To Increase Your eCommerce Sales.
7) Social Media Marketing Impacts Shopping
In the past two years, we’ve seen a sharp rise in the popularity of social media marketing. Instagram influencers, social media managers, and professional YouTubers have changed the game when it comes to online marketing.
And that shift to social media has also made an impact on online sales. Now customers aren’t just learning about brands and products on social media–they’re purchasing them on social media too! In 2019, social commerce accounted for $22 billion in sales, and that number is projected to rise to $29.3B in 2020.
If you haven’t started selling yet on social media, it’s time to get started! Look into selling on a Facebook store, via shoppable posts on Instagram, or through buyable pins on Pinterest. You should also consider beefing up your social media marketing methods. Define your brand, discover your audience, and consider hiring a social media manager. For more recommendations on creating a successful social media presence, check out our Guide To Social Media Marketing.
8) Users Want Personalized Customer Experiences
Personalization is not new in eCommerce. For years, online sellers have been using personalization in their email marketing campaigns, and with great success! Research shows that emails that use a customer’s first name in the subject line have a slightly higher open rate, and when you use a customer’s name in the body of the email, you gain a higher click-through rate!
Now online sellers are applying personalization to their online storefronts. The most popular method of personalizing your customers’ shopping experience is through product recommendations. Recommending the right products can make a big impact on your bottom line. According to data from Barilliance, sales from product recommendations account for up to 31% of a seller’s eCommerce revenue. That’s not a small amount! Be sure you list recommended products on your site, whether those recommendations are based on your customers’ browsing history, past purchases, or the items currently in their shopping cart.
Personalization can make a big impression on your customers. Do your best to personalize your shopper experience in any way you can!
9) Chatbot Customer Service Is Popular
A chatbot is an artificial intelligence software that is designed to answer common customer questions within a chat window.
Chatbots are quickly becoming a popular option for large businesses to easily handle large volumes of customer inquiries. According to statistics from eMarketer, in 2019, 40% of survey respondents had previously used chatbots to engage with retailers. And fortunately, it seems that most of those interactions go well. A 2018 study by Sumo Heavy showed that 72% of people who had interacted with a chatbot found the experience to be helpful and informative
For many small businesses, creating a chatbot may seem like a complex and overwhelming task. Fortunately, there are many software add-ons available that can take away the technical hassle of creating a chatbot. For Shopify users, you can find a number of Facebook Messenger chatbot applications in the Shopify App Marketplace.
For those who don’t use Shopify, there are many other chatbot programming software apps to which you can subscribe to in order to create your own solution. For example, a software called ChatBot lets you create question-and-answer flowcharts that you can easily turn into a chatbot’s programmed responses. Chatfuel lets you create a chatbot for your Facebook Messenger, and Kik also allows you to build your own chatbot (although Kik does require you to work with their API to do so).
Fortunately, building your own artificial intelligence doesn’t have to be hard. There are many options that you can take to simplify the process of setting up your own customer support chatbot.
10) Augmented Reality Can Lead To More Purchases
Augmented reality is a type of virtual imaging software that allows you to overlay pictures and videos of reality with a digital image. You may have seen augmented reality used in mobile games like Pokemon Go, when a digital creature seemingly appears right in front of you! Using augmented reality (AR), customers are able to “place” your products in their own homes, walk around them to view them from all sides, and even “try on” accessories and cosmetics.
While AR may seem like just a gimmick, studies show that AR can lead to more purchases! According to data from Tractica, global revenue from mobile augmented reality apps (including social media, games, eCommerce, and more) is expected to increase 89.5% from 2019 to 2020, resulting in $6.2 billion in global revenue in 2020.
AR can have multiple applications in your eCommerce business. You can use AR to let your customers view your furniture in their home, get up close to a new camera, or try on a pair of earrings.
Fortunately, enabling AR on your site doesn’t have to be complicated. Shopify users can take advantage of the new Shopify AR, which uses Apple’s AR Quick Look to enable AR experiences for Safari users. Sellers on other platforms should look into AR tools like Augment, and Marxent 3D Commerce. These apps do the hard part of creating an AR experience. Often, all you have to do is import multiple product images to get started!
Leveraging Trends For Your eCommerce Business
In an ever-evolving industry like eCommerce, it can be difficult to keep up with the new developments and trends in the market. However, this year you can keep up with the competition by using the steps we’ve included in this article.
As you consider your approach for this 2020, think about the steps you’re already taking to stay in line with current trends. Where are you racing ahead, and where are you falling behind? It might be a good approach to pick one or two areas in which your business is beginning to get outdated, and start by improving those areas. It’s best to make sure your site is up to date with all of the current best-practices before you try to get on the cutting edge of online selling.
So what are you waiting for? Get out there, review your current practices, and see which of this year’s eCommerce trends you want to tackle. You’re going to do great!
Here’s a quick reminder of how to get started:
Review your online marketing strategy
Look into selling household goods
Make sure your site works seamlessly on mobile
Create subscription products for your store
Consider sustainability in how you package and ship products
Offer free shipping when you can
Sell on social media
Use product recommendations to create a personalized shopping experience
Program a chatbot with add-on applications
Use an augmented reality tool to help customers envision your products
The post Top 10 eCommerce Trends For Small Businesses In 2020 appeared first on Merchant Maverick.
Startup capital is a necessity for virtually all businesses. However, the cost to start a business varies widely depending on what kind of business you are starting. For example, a home-based endeavor such as a dropshipping company or an Amazon business can cost less than $1,000 to get off the ground; the same goes for a business that doesn’t require an office or much equipment, such as a pet sitting business. On the other hand, opening a business that requires more equipment and office space—such as an autobody shop or a coffee shop—could cost $100,000 or more.
In this post, I’ll go over the main costs associated with starting a business and what you can expect to pay for each of them.
Surprisingly, there aren’t too many official statistics available on how much it costs to start a business, probably because the costs vary so much. There was a study conducted by the Ewing Marion Kauffman Foundation way back in 2009 that found the average cost to start a business at that time was $30,000.
Below, we’ve put together our own startup business cost figures, but keep in mind that the amount you’ll spend will vary greatly depending on various factors, such as your industry and location.
Common Small Business Expenses
Startup Expense
Estimated Cost
Business Licenses & Permits
$200
Business Insurance
$1,000 (annually)
Equipment & Supplies
$10,000
Inventory
$1,500
Office Space & Utilities
$5,000 initially, then $2,000 monthly
Employees
$8,000 (monthly)
Marketing
$700 initially, then $200 monthly
Business Software
$200 (monthly)
Professional Services (e.g., legal services)
$600
Misc. Other
$1,000
Total estimated cost: $28,200
Business Licenses & Permits
As a new business owner, you will need to register your business in your state and apply for a local business license/permit in your city or county. Depending on your industry, you may also need to obtain an industry-specific business permit. These initial business registration costs are usually minimal (less than $500).
Business Insurance
There are several types of business insurance for startups and which type(s) you need depends on various factors. Insurance is a significant, ongoing business cost. Most businesses will need general liability insurance and business property insurance, and if you have employees, you will also need to pay for workers compensation insurance and health insurance. Commercial vehicle insurance and product liability insurance are some other business types you may or not need.
Equipment & Supplies
All businesses require some sort of equipment or supplies, but these costs vary significantly depending on what type of business you have. Examples of equipment and supplies include:
Restaurant kitchen equipment
Office furniture
Office supplies
Business vehicle(s)
Medical equipment & supplies
Computers
Product manufacturing equipment
Point of sale equipment (cash register, credit card reader, etc.)
The type of equipment and other materials you need to run your business really depends on your industry—for example, if you’re starting a wedding planner business, you’ll probably just need a computer and office supplies, whereas a trucking company will need commercial vehicles, etc.
Office Space & Utilities
If you need to rent or buy an office space, this will be a significant ongoing expense, and a big startup cost too, as you will need to pay a security deposit, first and last month’s rent, etc. Internet, gas and electricity, a business phone, and data plans will also factor into the infrastructure costs of your office space. Most businesses start out as home-based or rent a business space initially, instead of purchasing or building property.
Inventory
If you sell a physical product, you need a certain amount of inventory to start out with (and have on-hand on an ongoing basis). Retail stores need a certain number of finished products on hand, while food-based businesses such as food trucks, for example, need to stock up on raw ingredients before they can open up shop. This, of course, does not apply to information-based businesses, such as consulting businesses or various other service-based businesses.
Employees
You may or may not start your business with any employees. If you do have employees, you need to factor in payroll costs, payroll taxes, insurance costs (workers comp. and health insurance), and training costs.
Marketing
Modern business marketing includes not only business cards, advertisements, signage, etc., but also digital marketing costs such as SEO, social media marketing, and website maintenance costs. As far as your digital marketing, at the very least you will need a website and social media presence. Tip: Be sure you register your domain early on in the process of starting your business, as your website will be the foundation of your online marketing.
Business Software
Some different types of business software you might need to launch and run your business include:
Accounting software
Booking software
POS softwareÂ
eCommerce/shopping cart software
Invoicing software
Inventory software
ERP software
Website builder software
Project management software
Shipping software
Email marketing software
Industry-specific business software (for example, specialized software for dentists, auto mechanics, etc.)
Some small business software programs combine multiple functions. For example, a restaurant management software system might include POS functionality as well as accounting, inventory, employee management, and maybe even email marketing functions. An accounting program like QuickBooks combines accounting, payroll, and invoicing functions, with POS functionality as an add-on.
Generally, most business software apps are no longer large programs that you install onto a computer as a one-time expense; rather, today’s business software is usually app/cloud-based, meaning you can sign in from any internet-connected device. And rather than paying for the software as a large, one-time expense, today’s software-as-a-service (SaaS) model is based on monthly payments with no down payment or long-term commitment. So, initial investment for business software will likely be much less than you would have paid for a comparable program 15 or 20 years ago. Some business software is even free to use.
In addition to software, don’t forget to factor in the cost of the associated hardware you’ll need to run the software into your equipment costs. For example, most businesses will need point of sale equipment, a laptop or iPad, a wireless router, etc. For very small businesses requiring only a basic app to take payments, it’s possible that the only hardware you might need is your smartphone.
Professional Services
This category can include legal fees, consultancy fees, accountant fees, and fees for any other professional services you use to help launch your business. While some businesses require minimal professional services, most businesses should at least consult a lawyer and/or professional accountant during the startup phase.
Other Costs
You’ll more than likely find out that there are more startup costs than you initially anticipated. Thus, it’s important to have a certain amount of your budget set aside for miscellaneous expenses that will inevitably come up. Some various costs you’ll need to include in your budget may include:
Organizational dues
Travel costs
Shipping fees
Loan interest
Repairs/renovations
Credit card processing fees (once you start making sales)
Of course, you’ll also need to make sure you have enough money to support yourself before your business becomes profitable, so make sure this cost is included as well.
How To Calculate Startup Costs
The SBA has a very useful startup cost worksheet that outlines common business startup costs with sample figures that you can personalize to calculate the true cost of starting your business. Simply enter the estimated cost for each category (rent, utilities, inventory, employees, etc.) and you’ll be able to get a rough estimate of how much money you might need for your initial investment.
It’s also a good idea to make a sales forecast, in which you estimate how much you will sell in the first 6â12 months of opening your business. How long will it take for your business to make a profit? How long ’til you can pay off your startup expenses? With your prospective revenue in mind, you’ll have a better idea of how much you can afford to spend on ongoing expenses such as payroll and inventory.
If the total seems unaffordably high, look for areas you might be able to cut costs. For example, could you operate your business out of your home for the first six months? Could you subcontract workers instead of hiring employees? Could you use dropshipping to deliver goods to customers directly from the manufacturer, instead of buying inventory upfront?
Once you have a good idea of how much startup capital you might need for your first 6â12 months in business, you can decide how you will finance your venture.
What To Do If You Donât Have The Money
Startup funding can be difficult to procure from a traditional bank, especially if you don’t have any significant assets or previous experience owning a business. However, that doesn’t mean you don’t have any options. Online technology has actually made it a lot easier to find small business funding. Here are some options you might try to finance your business.
Online Loan: This category includes both online business loans and online personal loans. Generally, online business loans for startups are limited to short-term, high-interest loans; you won’t qualify for better terms unless you’ve been in business at least two years. Still, it’s definitely worth looking into to see what kind of loans and rates you might qualify for. Some online lenders might even offer access to SBA loans for entrepreneurs, such as SBA microloans. Look at our startup business loan comparison chart to find some startup-friendly loan options.
Business Credit Cards: If you just need a few thousand dollars to get started, a business credit card can be a smart choice. You can use a business credit card to charge startup expenses, and/or to get a cash advance (though make sure you check the terms on the advance because they usually charge high interest). You could also use a personal credit card, though business credit cards typically have more business-specific benefits, such as cash-back for common business expenses. Look at our best small business credit cards comparison to see some of the top business cards’ requirements and perks.
Equipment Financing: If your main startup expense is the equipment you’ll need to run your business — for example, restaurant kitchen equipment, manufacturing equipment, office equipment, etc. — then you can simply finance the equipment itself, in the form of an equipment loan or lease. Similar to automotive financing, equipment financing involves monthly payments (either to lease or own), and does not typically require good credit or any collateral other than the equipment itself. Check out our equipment financing comparison chart to see your best options.
Line Of Credit: A business line of credit is similar to a credit card in the sense that you can have it on hand to pay for expenses, but you only have to repay what you use. Like a business loan, you can get a line of credit from an online lender or a traditional bank. However, startups will have better luck finding a line of credit online; there are several online line of credit providers that only require only 6 or fewer months in business, whereas banks typically will not extend a line of credit to startups. Check out our line of credit comparison page to find some startup-friendly LOC options.
Other startup financing ideas:
Loan from friends/family
Crowdfunding
Seed investors
Business grant
Nonprofit lenders
Personal retirement savings— rollover a retirement account using a ROBS (rollovers as business startups) plan
Our team at Merchant Maverick has also written many informative articles about startup financing that can help you on your journey:
Crowdfunding For Startups: 8 Tips For Launching
Don’t Let Bad Credit Stop You From Getting A Startup Loan
The Best Business Cards For Startups And Entrepreneurs
SBA Loans For Startups
How To Find A Startup Grant
14 Types Of Alternative Financing For Small Businesses
The Best Business Credit Cards For People With Bad Credit
Tax-Deductible Startup Costs
If your total startup costs are $50K or less, you can write off up to $10,000 of startup costs on your taxes in the year that you start the business, including up to $5,000 in business startup costs and another $5,000 in organizational expenses (legal fees, state incorporation fees, etc.). If your startup costs exceed $50,000, the amount of your allowable deduction will be reduced by that dollar amount, and if your startup costs are more than $55,000, you are not eligible for the deduction.
Certain startup expenses are not tax-deductible—for example, the costs to qualify for doing business in your industry, such as real estate licensing costs, are not deductible as a startup expense. Additionally, business assets (one-time business expenditures such as vehicles and equipment) are not deductible as startup expenses, but may be deductible in a different category (amortization).
(In case you were wondering, business loan interest is, indeed, tax-deductible.)
Final Thoughts
It may be a cliche, but it is also true that “it takes money to make money.” Startup business costs can range from under $10K to over $100K, depending on a number of factors. It’s okay if you don’t have all the money right now: the important thing is to put together an accurate estimate of how much you will need, what you will spend the money on, and how/when you’ll be able to repay any borrowed monies with your revenue. You can then incorporate this estimate into your business plan and the loan proposal you will use to demonstrate to lenders that you are a good candidate for financing.
With the numerous financing options available to entrepreneurs these days, there is a great chance that if you have a sound business plan and accurate, reasonable startup cost estimate, you will be able to find a lender that can meet your startup financing needs.
The post How Much Money Do You Need To Start A Business? appeared first on Merchant Maverick.
Do you have a tendency to share your knowledge and experience with others? Do you enjoy giving advice that helps others better their businesses ⦠or their lives? Did you know that you could get paid just for sharing your expertise?
While it may sound too good to be true, thatâs exactly what a consultant does. A consultant is an expert that provides knowledge, expertise, and training to others for a fee. Consultants advise their clients on a variety of topics, from how to implement the latest technology to how to create a successful marketing campaign.
Becoming a consultant does not require special training, credentials, or education. You simply need to be an expert in your field. You also need to have passion — not just for your industry but for helping others truly find the right solutions for their problems.
Consultants are organized, know how to network, and are always willing to learn more about their field to provide the best services to their clients.
If this sounds like you, becoming a consultant may be your new career path. The great thing about consulting is that anyone with knowledge and expertise can do it. Starting your own consulting business has low overhead costs and doesnât require a lot of capital from the get-go. In fact, you can even start your own business from your home office.
But maybe your goals are much bigger. Maybe you want to have the top consulting firm in your area. It doesnât matter if you want to simply be your own boss and make a decent income or if you want to grow your business to epic proportions — this guide is for you.
Weâll explore the steps you need to take to get your business off the ground. From finding your niche to funding expenses and spreading the word about your business, this guide explores what it takes to open and operate a successful consulting business. Letâs jump in and get started!
Pick Your Niche
Weâve all heard the saying, âJack of all trades, master of none.â When clients are seeking a consultant, they donât want someone that knows a little bit about everything. Instead, they want to work with a consultant that knows everything about one thing. This is why itâs so important to pick your niche.
To get started, consider your skills and knowledge. What industry are you familiar with? Clients are looking for an expert in their field, so identifying the industries you already know is important when selecting your niche.
Next, you need to consider what problems and pain points your chosen industry is facing. You can do online research to find out what challenges are common in this industry. Check out blogs and industry forums to get an idea of common complaints and problems. You can even talk directly with people in the industry to find out what obstacles and setbacks they face.
Once armed with this information, you need to identify your own skills and knowledge that could be applied to this field. For example, letâs say youâre knowledgeable about the construction industry. One of the common pain points in this industry is a lack of communications. Are you familiar with mobile and cloud-based software? Great! You could use this knowledge to help businesses streamline communications and improve efficiency.
When you start your consulting business, your goal shouldnât just be something generic like, âI want to help other business owners.â Instead, you should have a more specific purpose in mind. âI help businesses in this industry find and implement the newest and best software solutions to grow their business in just 3 months.â This also serves as your value proposition. In other words, this is the value you offer; something that sets you apart from other consultants. Remember to effectively communicate to your clients what you can do for them.
Still unsure of where to get started? Consider one of these niches for your consulting businesses:
Biotech
Cannabis Business
College
Construction
Customer Service
Dental
Financial
Food Safety
Grant Writing
Human Resources (HR)
Information Technology
Leadership
Management
Marketing
Medical
Nutrition
Project Management
Real Estate
Safety
Sales
Security
SEO
Social Media
Supply Chain
Technology
After youâve selected your niche, do your research to find out what certifications and licenses you need to legally operate your business. In most instances, youâll find that a business license in your state of operations is all that you need to open your consulting business.
One last thing to remember is that even if youâre knowledgeable about your niche right now, industry trends and changes can occur in an instant. Make sure you stay up-to-date on whatâs happening in the industry to ensure youâre always qualified to assist your clients.
Make Your Business Plan
Even if your consulting business seems pretty straightforward, itâs still necessary to have a business plan. There are a few reasons you need a business plan. The first is that your plan maps out your goals and how you plan to reach those goals. A business plan is also necessary when you seek funding through banks or other lenders.
Because every business has a different vision, no two business plans are exactly alike. However, there are a few common components that should be included in all business plans. Those components are:
Executive Summary: Highlights what will be discussed in your plan and summarizes what your business hopes to accomplish
Company Description: Includes key information about your business and the customers that you will serve
Competitive Analysis: Who are your competitors, and what are their strengths and weaknesses?
Organization & Management: An outline of the setup of your organization and names and summaries of the job responsibilities of your management team
Market Analysis: An analysis of your industry now and in the future
Marketing Plan: An outline of the marketing strategies you will use to draw clients to your business
Financial Projections: Your expectations for future revenue based on market research
Register Your Business
Before you launch your business, you have to register with federal, state, and local agencies. You will need to register your business name with the state in which you operate. In addition, you must register with the Internal Revenue Service to get an Employer Identification Number (EIN) if you ever plan to hire employees. It’s imperative to obtain licenses and permits to operate your business based on state and local regulations. You must register your business if you plan to seek business funding now or in the future — or if want to open a business bank account. Establishing a business is legally required, but it also makes you look more professional and legitimate to your clients.
One important step to take when registering your business is choosing your business structure. Your business structure will be important in determining what youâll pay in taxes. Your business structure may also offer protection from personal liability for the debts and obligations of your business. The different types of business entities include:
Sole Proprietorships
This structure is the easiest to form and does not require filing with the state. With a sole proprietorship, profits and losses from the business are reported on the business ownerâs personal tax return. The major drawback of this business structure is that the business owner â you â are held personally liable for the debts and obligations of the business.
Partnerships
A partnership is established by businesses with two or more owners. There are three common types of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
General Partnership (GP): This type of partnership has the fewest ongoing requirements. These are also the easiest to form and donât require state filing. The drawback is that partners in a GP are personally liable for the debts and obligations of the business.
Limited Partnership (LP): In a limited partnership, only the general partner(s) has unlimited liability. The other partners — known as limited partners â have limited liability. This simply means that personal assets canât be used to cover the debts and liabilities of the business.
Limited Liability Partnership (LLP): In a limited liability partnership, all partners have limited liability. However, partners may be held liable for their personal actions. This structure is reserved for professional service businesses.
Limited Liability Companies
A limited liability company, or LLC, is independent of its owners. The personal assets of the owners are kept separate from business debts. An LLC is taxed similarly to sole proprietorships and partnerships.
Corporations
If a corporation is the right structure for your business, there are two options to consider: C corporations and S corporations.
C-Corporations: C-corporations are independent of their owners. There is no limit on the number of shareholders in a C-corporation. C-corporations are taxed on shareholder dividends and corporate profits.
S-Corporations: An S-corporation is also independent of its owners. Owners report their share of the profits and losses on their own personal income tax returns. There are limitations to the number of shareholders with this structure.
When choosing your business structure, you need to keep a few considerations in mind. If you have multiple owners, a partnership is a good route to take. If you want to protect your personal assets but donât want a higher tax rate, consider establishing an LLC. If you plan to raise large amounts of capital in the future, a corporation might work best for you. You can learn more about what business structure best fits your needs by consulting with an attorney or accountant.
Get Business Insurance
Business insurance is critical for the protection of your business. From property insurance that protects your office building to liability insurance that safeguards you from lawsuits, there are a few different types of business insurance to consider for your consulting business.
General Liability Insurance
If you operate a brick-and-mortar business, you need general liability insurance. This protects your business in the event that something happens to a client on your property. For example, if a client slips and falls in your office, they could file a lawsuit against you. With general liability insurance, you wonât have to pay all associated costs out-of-pocket.
Professional Liability Insurance
Professional liability insurance is also known as errors and omissions (E&O) insurance. This type of insurance protects you from lawsuits that may be filed by clients. Letâs say that you consult with a client on a project, and the project ultimately ends up failing. The client believes that the failure of the project was your fault and files a lawsuit. If you have E&O insurance, attorneyâs fees, settlement expenses, and court costs will be covered up to the full amount of your policy.
Workerâs Compensation
If you have employees, workerâs compensation is another type of insurance your business needs. Workerâs compensation covers the medical expenses, wages, and legal fees of an employee that is injured on the job or suffers a work-related ailment. Most states require all W2 employees to be covered under workerâs compensation insurance, but laws vary by state.
Commercial Property Insurance
If you have a commercial property for your consulting business, consider getting commercial property insurance to protect your assets. This type of insurance protects you from losses that may occur from burglary, fire, or natural disasters.
Separate Personal & Business Expenses
It may be tempting to simply use your own personal bank account and credit cards for your business. Since the business is yours, thereâs no harm in mixing your business and personal finances, right?
Actually, the wisest move is to keep your business and personal finances separate. One of the most important reasons for doing this is because it will make filing your taxes much easier. Imagine that the deadline is ticking to file your return with the IRS, and you (or your accountant) are stuck spending hours separating business and personal records. If youâre audited after filing, having separate records for business and personal income/expenses will make the process go much more smoothly.
Keeping your business and personal finances separate is also helpful in limiting your liabilities from creditors. If there is no clear separation between you and the business, creditors could potentially use your personal assets for unpaid debts and obligations, even if your business is structured as a corporation or LLC.
Separation of personal and business expenses is also important for building your business credit. If youâre using your own personal credit cards, you may increase your personal credit score. However, this wonât affect your business credit history. If you plan on applying for business loans in the future, boosting your business credit profile is critical to qualifying for higher loan amounts and the best rates and terms.
The first step to separating your business and personal finances is to open a business checking account. This bank account can be used for depositing money, writing checks to vendors, making online payments, and keeping an eye on the expenses and income of your business. To open an account, you will need your EIN, Social Security Number, business address, and business license. You may also need other documentation, such as a copy of the articles of incorporation on file with your state.
Even though you can keep an eye on your finances through your business bank account, itâs also important to set up a dedicated accounting system for your business. This will allow you to closely keep track of the money coming in and going out of your business. You may opt to hire a bookkeeper for this task, or you can use accounting software to track everything yourself. Weâll go into more details on this type of software a little later.
Finally, you can apply for a business credit card to cover recurring expenses for your business, such as your lease or utility payments. Using and paying off your business credit card responsibly will help strengthen your business credit profile.
Unsure of which card is right for you? Start with these recommendations.
Chase Ink Business Cash
Chase Ink Business Cash
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Annual Fee:
$0
Purchase APR:
15.49% – 21.49%, Variable
Required credit: Good, excellent
Bonus offer: $500 cash back if you spend at least $3,000 in the first three months of opening your account
Purchase intro APR: 0% for the first 12 months
Balance transfer intro APR: 0% for the first 12 months
Foreign transaction fee: 3%
Rewards:
5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone purchases each account anniversary year
2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
1% cash back on all other purchases
Notable Perks & Benefits:Â
Employee cards at no additional cost
Travel and purchase coverage
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The Chase Ink Business Cash card rewards you just for using your card on business expenses. You can receive 5% cash back on internet, cable, phone services, and purchases from office supply stores. However, this is capped at the first $25,000 spent each anniversary year.
You can also earn 2% back on purchases at gas stations and restaurants. This is also capped at the first $25,000 spent per anniversary year.
For the rest of your purchases, you can take advantage of unlimited 1% cash back rewards. As a new cardholder, you can receive a bonus of $500 cash back if you spend $3,000 within 3 months of opening your account.
This credit card has a 0% introductory APR for the first 12 months. After the introductory period, interest rates are 15.49% to 21.49% based on creditworthiness. There is no annual fee associated with this card.
Additional benefits for Chase Ink Business Cash cardholders include free employee cards, purchase protection, and extended warranty protection. You must have excellent credit to qualify for this credit card.
Spark Cash Select For Business
Spark Cash Select From Capital One
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Annual Fee:
$0
Purchase APR:
15.24% – 23.24%, Variable
Required credit: Good, excellent
Bonus offer: $200 cash back if you spend at least $3,000 in the first 3 months of opening your account
Purchase intro APR: 0% for the first 9 months
Balance transfer intro APR: 0% for the first 9 months
Foreign transaction fee: None
Rewards:Â
Unlimited 1.5% cash back on all purchases
Notable perks & benefits:
Rewards can be requested as cash back or applied as statement credits
Employee cards at no additional cost
Comes with Capital One and Visa business benefits
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Capital Oneâs Spark Cash Select for Business is designed for borrowers with excellent credit scores. One of the standout features of this card is the unlimited 1.5% cash back you receive just by using your card. You can cash out your rewards at any time.
If you become a new cardmember and spend $3,0000 within the first 3 months of opening your account, youâll receive a $200 cash bonus.
Youâll also be able to enjoy a 0% introductory APR for the first 9 months. After the introductory period, your APR will be from 15.24% to 23.24% based on creditworthiness. This card does not have an annual fee, and you can receive employee cards at no cost.
Seek Business Funding
One of the best things about setting up your consulting business is that you may be able to get started with very little capital. Ultimately, though, this depends on the goals of your business. For example, if you plan to only consult with clients online, you can work right out of your home office. This eliminates the need for a dedicated commercial office, which comes with expenses such as monthly rent and utility payments.
On the other hand, you might want to open a brick-and-mortar business immediately. This would require more capital from the start. Even if you start small, you may later expand your business by purchasing or leasing a larger building and hiring employees.
Whether you start off big or you plan to grow in the future, youâll need capital. In some cases, you may be able to use your revenue to fund your expenses and growth. In other instances, youâll need a financial boost from a business lender.
Fortunately, there are many financing options out there if you know where to look. Letâs explore the types of funding available to you, along with our lender recommendations.
Personal Savings
If you would prefer to not work with a lender, using personal savings is an option available to you. If you use your own money, you donât have to worry about making payments to a lender. Youâll also save money because you wonât pay interest or fees that are charged by a lender. On the downside, if your business isnât successful, you risk losing your savings.
Friends & Family
Have a friend or family member with cash to invest? Pitch them your business idea and let them know why investing in you is a great idea. Have your business plan in hand and present your ideas to them just as you would any other lender. If they decide youâre worth the investment, make sure to get everything in writing to protect all parties.
There are two ways to get loans from someone you know. You can choose debt financing, which means that youâll make payments toward your principal balance plus interest on a regularly scheduled basis, just like a traditional loan. Or you can receive money in exchange for ownership in your business â also known as equity financing. While you wonât have to repay immediately, your friend or family member will collect a share of the profits over time. Depending on your agreement, they may also have some level of control in the decision-making process of your business.
Unsure of which route to take? Learn more about debt vs. equity financing to determine which option is best for your business.
Rollovers As Business Startups (ROBS)
What if there was a way to get the capital you need to start or grow your business without taking on debt? Sounds too good to be true, doesnât it? But with a rollovers as business startups (ROBS) plan, you can do just that. The only catch? You have to have a qualifying retirement plan.
Early withdrawal of your retirement funds results in penalties. However, a ROBS plan allows you to leverage your funds without having to pay these penalties.
With a ROBS plan, you set up a new C-corporation. Then, you create a retirement plan for your newly created corporation. Next, you roll over funds from your existing retirement plan. These funds can be used to purchase stock in your new business, providing you with the capital you need to start or expand your business.
The best part of a ROBS plan is that youâre using your own funds. This means no debt, no interest or fees, and no repayments to a lender. However, you are putting your retirement funds at risk if your business fails.
Recommended Option: Guidant Financial
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Time in business: Unknown
Credit utilization: Less than 50%
Credit score: 690+
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Many small business owners that get capital through a ROBS plan hire a ROBS provider to do the heavy lifting. Guidant Financial is a ROBS provider that can help you get started.
To set up a ROBS plan with Guidant Financial, you need to have a retirement plan or pension account with at least $50,000. Most plans qualify, including:
401(k)
403(b)
Traditional IRA
Keogh
TSP
SEP
Guidant Financial can help you roll over up to 100% of your account balance. In addition to having a qualifying plan, you must also meet these requirements:
Must be an employee of the business
Must have a business to fund
You can use your funds for any business purpose, whether youâre buying an existing business, funding startup costs, or paying expenses related to expansion.
To get started, you must pay a $4,995 startup fee. Since this isnât a loan, you wonât have to make debt repayments. However, you will have to pay a monthly administration fee.
If you donât qualify for a ROBS plan or youâre seeking other types of funding, Guidant Financial offers other options including Small Business Administration (SBA) loans, unsecured business loans, and equipment leases.
Lines Of Credit
A line of credit is one of the most flexible forms of financing. This is a type of revolving credit (similar to a credit card) that allows you to make multiple draws. As you repay your principal balance (plus fees and interest), funds will become available to use again. Fees and interest are only charged on the borrowed portion of funds.
With your line of credit, you can initiate draws as needed. Once you draw funds, theyâll be transferred to your bank account and are available to use in 1 to 3 business days in most cases.
You can spend up to and including the credit limit set by your lender. Most lines of credit can be used for any business purpose but are particularly useful for unexpected expenses, filling revenue gaps, or covering extra expenses due to a seasonal increase in business.
Recommended Option: Fundbox
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No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
Business revenue: $50,000 per year
No specific personal credit score requirement
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Fundbox is a lender that has lines of credit up to $100,000 for qualified small business owners. The lender charges set draw fees starting at 4.66% of the borrowing amount. You can choose to repay Fundbox over terms of 12 or 24 weeks, and payments are automatically deducted from your linked business checking account.
You can be approved instantly and put your line of credit to work for you immediately. Once you initiate a draw from your account, funds will hit your bank account within 1 to 3 business days.
Qualifying for a Fundbox line of credit is easy. The minimum requirements are:
Must have a business checking account
Must have a U.S.-based business
At least 2 months of activity in accounting software or at least 3 months of transactions in your business bank account
At least $50,000 in annual revenue
Your credit limit will be based on the performance of your business.
Equipment Loans
Whether your consulting business is home-based or you operate out of a commercial property, you will need some equipment to get started. Some equipment you may need for your business includes a computer, printer, office furniture, and computer software. If you donât have the funds available in your bank account, consider applying for equipment financing.
Equipment financing is a type of funding used to purchase equipment, furniture, and fixtures for your business. Equipment loans can also be used to purchase a commercial vehicle if one is needed to drive to meet your clients if you don’t want to take out an auto loan. There are two types of equipment financing available: equipment loans and equipment leases.
With an equipment loan, youâll make regularly scheduled payments to a lender over a set period of time, such as five years. Each payment will be applied to the principal â the amount you borrowed â as well as fees and interest charged by the lender. Once youâve made all payments as scheduled, the equipment belongs to you. You can continue to put the equipment into use or sell it.
With equipment leases, you also make scheduled payments to a lender. However, your lease terms are typically a few years shorter. Once youâve made all scheduled payments, you return the equipment and sign a new lease for new equipment. You never truly own the equipment, but this is a good option for anyone that wants to update their equipment every few years.
Recommended Option: Lendio
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Time in business: 6 months
Business revenue: $10,000 per month
Personal credit score: 550
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Lendio isnât a direct lender. Instead, itâs a loan aggregator that can connect you with its financing partners to help you get the best financing offer for your situation.
One of the financial products offered through Lendio is equipment financing. You may qualify for funding of $5,000 to $5 million for the purchase of your equipment. Loan terms are 1 to 5 years with interest rates starting at 7.5%.
Your funds can be used for almost any equipment purchase, including software, furniture and fixtures, and even appliances and HVAC units for your office.
To qualify, you must meet these minimum requirements:
Time in business of at least 12 months
At least $50,000 in annual revenue
Personal credit score of 650 or above
If you donât meet these requirements, Lendio may still have an option for you. Just fill out a quick application to find out what you can qualify to receive. Lendio also offers additional financial solutions, including SBA loans, lines of credit, term loans, and startup loans.
Personal Loans For Business
If youâre a brand-new business, you may not qualify for other financing options. This is because lenders look at annual revenue, business credit profile, and your time in business to determine if youâre a risky borrower. If you donât meet these qualifications, you wonât be able to get affordable small business funding.
However, there is an alternative solution. You can apply for a personal loan to use for business purposes. With this type of financing, a lender considers your personal credit history and income to determine if you qualify.
In most cases, you can use a personal loan for business for any purpose, from purchasing needed equipment to hiring new employees, using as working capital, or paying startup costs.
Recommended Option: Upstart
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Time in business: N/A
Personal credit score: Minimum 620
Business revenue: N/A
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Upstart personal loans are available in amounts from $1,000 to $50,000. APRs range from 7.54% to 35.99%. Repayment terms are 3 or 5 years.
Upstartâs lending partners consider more than just your credit score when determining whether to approve your loan. Your years of credit, education, area of study, and job history are also considered during the application process.
To qualify for an Upstart personal loan, you must have:
Personal credit score of 620 or above
Solid debt-to-income ratio
No bankruptcies or public records
No delinquent accounts or accounts in collections
Less than 6 inquiries in the last 6 months
Business Credit Cards
Weâve already discussed business credit cards earlier as part of keeping your business and personal accounts separate. Business credit cards are great to have on-hand for unexpected expenses or recurring expenses for your business.
You can even score rewards just for using your credit card. Look for a rewards card that offers cash back or points to use toward perks like travel to get the most out of your card.
Recommended Option: Spark Classic
Spark Classic From Capital One
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Annual Fee:
$0
Purchase APR:
25.24%, Variable
Required credit: Fair
Bonus offer: None
Purchase intro APR: N/A
Balance transfer intro APR: N/A
Foreign transaction fee: None
Rewards:
Unlimited 1% cash back on all purchases
Notable perks & benefits:
Free employee cards
Fraud coverage and alerts
Capital One and Visa business benefits
More card details (click to expand)
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Capital Oneâs Spark Classic for Business card is available to business owners with average credit. This card offers a 25.24% variable APR and no annual fee. Using your card responsibly helps build your business credit profile so you can qualify for other cards and financing offers in the future.
You can earn unlimited 1% cash back on all purchases with no minimum required to redeem. Other benefits include fraud coverage and alerts and employee cards at no additional cost.
Choose Business Software
Choosing the right business software can help you run your consulting business more efficiently. The first type of software you should invest in is accounting software or an online bookkeeping system. This allows you to keep track of your income and expenses, run financial reports, send invoices, and access your financials for tax purposes. As your business grows, you may opt to hire a bookkeeper or accountant, but in the beginning, you may be able to tackle this task yourself using the right accounting software.
New to accounting? Download our free ebook, The Beginner’s Guide to Accounting, to get a handle on the basics.
Youâll also need software thatâs used for managing clients — from keeping updated contact information all in one place to setting and tracking appointments. There are programs designed specifically for consultants that offer client management, project management, tasks, and other features.
To accept payments other than cash, youâll also need payment processing software. This software communicates between your bank and the bank of your client, allowing you to accept debit cards, credit cards, and other forms of payment. If your business is going to be based solely online, you can sign up for an online payment solution.
Finally, if you plan to do online consulting, you must invest in video conferencing software. There are multiple options available — some at no cost and others that charge a monthly fee.
Set Your Rates
In order for your business to be successful, you have to have revenue. Without revenue, you wonât be able to pay your expenses or the salaries of yourself or your employees. Without revenue, you also wonât be able to grow your business.
To make sure your business is successful and profitable, you need to set your rates. This can be a balancing act for most consultants. If you set your rates too high, it may scare away potential clients. If you shortchange yourself and set your rates too low, clients may not take you seriously or you might not bring in enough revenue to cover your expenses.
To set your rates, first decide how your pay structure will look. You have three options: per project, hourly rates, and retainers.
If you charge per project, you will need to figure out how long the project will be, what expenses may be incurred, and other factors. You may choose to bill for the entire project or break it down into monthly payments.
You can also charge an hourly rate. Take a look at your expenses and determine how much you would need to charge to be profitable. Also, be aware that the higher your rate is, the more your clients will expect from you. If you have the credentials, training, and education to justify charging $500 per hour, your clients will have high expectations of what youâll provide.
Finally, you can also work on a retainer basis. With a retainer, you will work a specific number of hours for one set monthly fee.
When calculating your rates, make sure to list all of the expenses of your business. You will need to make at least enough revenue to cover these costs.
You also need to find out what your competitors are charging for their services. You can do this by going online to their websites, checking out their brochures, or making a quick phone call. Unless you have an obvious advantage over other consultants in your area, you want to make sure that your fees are competitive.
Bolster Your Web Presence
Prospective clients are going to have a difficult time finding you if you donât have a web presence. This doesnât mean that you have to invest thousands of dollars in setting up a fancy new website. However, you do need to have at least a basic website and social media profiles to provide clients with critical information about your business.
You can get started by setting up free social media pages on sites including Facebook and Twitter. Your pages should include your contact information, the services you offer, and office hours. As your business grows, you can post news and updates, videos, photos, and other media to draw in clients.
You also need to set up a company website. You could pay a web designer, but at this stage, you can certainly tackle the task yourself. Easy website builders make it simple to set up your website in just minutes, even if youâve never created a website before. Make sure that you include your contact information, areas served, and the services you offer. If you have any credentials or training, add that information to your website, as well.
Later, you can add additional features to your website, such as videos, online appointment scheduling, and client testimonials.
If you want to learn more tips and tricks, check out our article on creating and maintaining your online presence.
Market Your Business
Building your web presence is one way to get your name out to the public, but you should also implement a marketing and advertising campaign to further boost your business. The strategy you choose is based on a number of factors, including your marketing budget and your goals for the campaign.
One great way to market your business is through Facebook ads. You can easily set your budget and select your target audience. It only takes a few minutes to get your Facebook ads up and running. Learn more about social media marketing for your business.
Another advertising method you can use is a newsletter. Your newsletter doesnât need an over-the-top design. Instead, a simple newsletter with important information is most effective. Use your newsletter to discuss current industry trends, current news about your business, and other relevant information. You can send a physical newsletter by mail, but this comes with costs including paper and envelopes, printing, and postage. A more affordable option is to offer an email newsletter. Make sure to include a sign-up option on your website and social media pages.
Another idea is to print up brochures for your business. Your brochure should include your services, your value proposition, the industries you serve, and biographical information, such as your credentials or training.
You can also take your knowledge and leverage it as a guest speaker at an event. You can speak at dinners, luncheons, and other functions for industry events or service organizations. If you donât want to be a public speaker, you can attend industry events and network with potential clients. Networking is key to running a successful consulting business.
Cold-calling is also a way to attract new clients. Prepare your script before calling local businesses that could use your services. The goal of cold-calling is to get a meeting with the decisionmaker to sell yourself and your services to gain a new client.
Finally, word-of-mouth advertising is one of the easiest ways to bring in business. Satisfied clients that tell their friends, family, and colleagues about you or who take the time to write a referral or testimonial that you can use on your website can help drive more clients to your business.
Final Thoughts
Sharing your knowledge and expertise with others can be extremely lucrative if you know how to set up your consulting business. With careful planning — selecting your niche, setting your fees, and effectively marketing your business — youâll have a better chance of reaching new clients and meeting your financial goals. Good luck!
The post How To Start And Fund A Consulting Business: The Step-By-Step Guide appeared first on Merchant Maverick.
In the world of fashion, trends come and go, but a few select pieces stand the test of time. One piece of clothing thatâs found in almost any wardrobe is the t-shirt. From comfy shirts made for the gym to shirts with trendy designs worn for a night out with friends, t-shirts are a staple for men, women, and children.
T-shirts are here to stay, so why not capitalize on this fashion staple? Whether you have a degree in fashion design or you just want to become an entrepreneur, starting your own t-shirt business could be the opportunity youâve been looking for.
In this guide, weâll take a look at what it takes to get your own t-shirt business off the ground. Weâll start with basics such as designing and printing your shirts. Weâll discuss the importance of registering your business. Then, weâll look at startup costs, as well as how you can get the capital you need to start your business and keep it operating. Finally, weâll look at ways you can advertise your business to bring in customers and revenue.
Ready to take the leap into entrepreneurship? Read on to find more.
Design Your Shirts
Before you begin selling t-shirts to the masses, you have to create designs that people want to buy. The first step is identifying your target market. Are you going to sell t-shirts to men, women, children, or a combination of the three? Are your t-shirts going to be more fashionable, or are they better suited for lounging around the house or hitting up the gym?
Once youâve identified your target market, itâs time to think about the designs youâll use. Letâs say that your t-shirts are aimed at the active man or woman. Your designs should incorporate fitness or motivational graphics. You can also determine other features of your shirts based on your target audience, such as the type of material used. If your shirts are designed for the fitness-minded consumer, for example, select a moisture-wicking fabric.
Your t-shirt designs donât have to be overcomplicated as long as they appeal to your target audience. The key, though, is to make sure your designs are completely original. Not only does ripping off other designs make you look like a copycat, but you could face some serious legal issues if you use the artwork or designs of others without permission.
Itâs also important to remember that sometimes a design may be a complete flop. Even the most well-known fashion designers in the world have released items that werenât a hit with their devoted fans. If one design isnât doing the job, try something else until you find what works best for your target audience.
Also, it doesnât matter whether or not you have any design experience. As long as you have some ideas, you can hire a designer to bring your visions to life.
Decide How To Print Your Shirts
Once you have your designs, itâs time to think about how youâre going to bring the design from your computer or tablet screen to the front of a t-shirt. In other words, you need to decide how to print your shirts.
First, you’ll need to determine the method youâll use to print your shirts. Screen printing is one option; it is a tried-and-true method that allows you to add long-lasting graphics to t-shirts. Screen printing is best for creating large batches of shirts since the initial setup is so time-consuming. Printing smaller batches is not cost-efficient with this method.
Another thing to note is that screen printing is best for very simple designs. Complex designs or multiple colors in one design can be problematic. If you have a more complicated design or pattern, consider direct-to-garment printing.
Direct-to-garment printing works similar to your color printer at home or at the office. The DTG printer prints directly on the t-shirt. With this method, you can use multiple colors and print complicated designs and patterns. Shirts printed with a DTG printer can be extremely detailed.
Setting up a DTG printer isnât difficult or time-consuming. However, the actual printing process does take some time, so this method is best for smaller batches of t-shirts.
Another option to consider for printing your t-shirts is using a heat transfer machine. These machines transfer designs from heat transfer paper to the t-shirt. Full-color images can be printed using the heat transfer method, and you can easily print shirts on-demand. However, the quality is often lower and the design far less durable than using the other printing methods.
Regardless of which method you choose, there are two ways you can go about printing your shirts. You can use a third-party printing service or you can purchase the equipment and do it yourself. Letâs review the benefits and drawbacks of each.
Hiring A Third-Party Printer
Many t-shirt businesses do not do the printing themselves. Instead, these businesses hire a third-party service to handle the printing for them. There are a few benefits to hiring a third party to print your shirts. The first is that you wonât have to make an upfront investment in expensive printing equipment. You also wonât have to learn how to use the equipment or spend time running it.
However, there are some drawbacks to using a third party. You’ll have to shop around to find a printing company that provides high-quality workmanship. You donât want your customers receiving t-shirts with graphics that fade or crack or that fall apart after the first wash. Many companies offer low-cost samples so you can check the quality before placing a larger order.
You also need to shop around and compare the pricing of different t-shirt printing companies. Some companies only fill bulk orders, which could put you at a disadvantage if you want smaller batches.
If you plan to only sell your designs online, you can work with an on-demand dropshipper. Once an order is placed on your website, the dropshipper will print and ship out the order to your customer. Before choosing a dropshipper, itâs necessary to place your own order to check out the quality of the shirts. You also need to evaluate pricing to make sure youâre getting the most bang for your buck. The major disadvantage to using a dropshipper is that if an order is wrong, slow to ship, or not printed correctly, the blame will fall on your shoulders, even if you donât have control over any of these issues.
Purchasing Your Own Equipment
The alternative is to purchase equipment and print your own t-shirts. The advantage of this is that you have total control over both the quality and the number of shirts that are printed.
The major drawback, of course, is that t-shirt printing equipment is very expensive. Expect to spend at least a few hundred dollars for a heat transfer machine. If you want a DTG printer, expect to pay tens of thousands of dollars. You will have to pay for ink and maintenance of your machine. In some instances, you may be able to lease equipment to save on upfront costs.
You also have to take the time to learn how to properly use the equipment or train someone else to take on the job.
Decide How To Sell Your Shirts
Now that youâre closer to getting your shirts designed and printed, itâs time to decide how you plan to sell your items. You can set up an online shop, open your own brick-and-mortar store, or bring your designs to local stores in your area. You may also maximize profits by combining these selling tactics.
One of the easiest sales methods is to open an online shop. Customers can browse your designs and make their purchases directly online. You can ship out the orders yourself, or you can work with a dropshipper to make t-shirts on-demand when an order is placed. This option has low startup and overhead costs.
You can also open your own brick-and-mortar store. While youâll be able to reach customers in your local area, this option has much higher startup and operating costs. Expenses may include rent for your commercial property, utilities, fees for business licenses and permits, and equipment. Youâll also have to purchase inventory to keep in stock. If you go this route, make sure to consider your local area. For example, if you live in a remote area, you may not have a large customer base. However, if you live in a thriving city or popular tourist destination, opening your own brick-and-mortar store may be a profitable venture.
The third option is to print out smaller batches of your t-shirts and network with local boutique and business owners in your area. With this method, you wonât have to pay for your own commercial space, but you will have to give the business owner a cut of your profits.
To determine what is right for your business, keep a few things in mind. Is this going to be your full-time job, or are you just trying to make a little extra money on the side? If you donât plan on devoting yourself full time to your t-shirt business, stick to an online shop or sell your t-shirts through other businesses and boutiques.
Calculate Startup Costs
Once you have an idea of the direction you want your t-shirt business to take, you can start thinking about startup costs. The route youâve chosen with your business will determine how much your startup costs will be.
If you plan to open a brick-and-mortar business, youâll have expenses including a rent or lease payment, equipment and furnishings, utilities, a point-of-sale system, and inventory. Unless you plan to do all of the work yourself, you also have to hire employees. If your business will be based solely online, your costs will be much lower — think shipping costs, plus the price of a website, software, and ecommerce platform subscription fees.
Startup costs vary significantly based on the goals of your business. You can start big with a brick-and-mortar shop and may pay tens (or even hundreds) of thousands of dollars to launch your business. Start a smaller online shop, and you can get started for as little as a few hundred dollars to launch your website and register your business.
Register Your Business
Youâve started laying the groundwork for your t-shirt business, and now itâs time to make everything legal. The first step is to determine what type of business structure you will form. The business structure you select will determine how much you pay in taxes, as well as whether or not you will be personally liable for the debts and obligations of the business.
Sole Proprietorship
Sole proprietorships have one owner. These are the fastest and most inexpensive business entities to form and do not require registering with the state. The drawback is that sole proprietorships are not separate legal entities, so you will be personally responsible for the liabilities of the business. It may also be difficult to obtain a loan or raise capital as a sole proprietor.
Partnership
A partnership has two or more owners. A general partnership is the simplest form and does not require registration. General partners will be held liable for the debts, obligations, and liabilities of the business.
You may also consider starting a limited partnership, which has a general partner and limited partners. Limited partners are not responsible for the liabilities of the business.
Finally, you may choose a limited liability partnership, where all partners are limited partners and are not responsible for the liabilities of the business.
Corporation
A corporation is the most complex business structure. As a corporation, you will pay taxes at the corporate rate. Shareholders also pay taxes on dividends, resulting in double taxation. Corporations have ongoing requirements, such as electing a board of directors and holding annual meetings.
While a corporation is more expensive and complicated to form, this is the best structure if you see a large expansion in your future. As a corporation, you can sell stock to shareholders to raise large amounts of capital.
Limited Liability Company
A limited liability company, or LLC, combines benefits of different business entities. Like a corporation, business owners in an LLC are not personally liable for the debts and obligations of the business. However, LLCs do not have to pay corporate tax rates or face double taxation. LLCs also do not have ongoing requirements like corporations.
The type of business structure you select ultimately depends on the needs of your business and your future plans for growth. If you want to build a clothing brand thatâs known around the world, choose a corporation or LLC structure. If you just want a smaller online shop that helps pay your bills, a sole proprietorship may be the way to go.
Once youâve determined your business structure, you may be required to register with your state. Sole proprietorships and partnerships may file for a DBA (“doing business as”) under a fictitious name known as a trade name.
Depending on the type of t-shirt business you plan to operate, you may be required to obtain business licenses and/or permits from state and local agencies. Fees and requirements vary by state. You can contact local agencies including your City Clerk, Department of Consumer and Regulatory Affairs, and state Department of Revenue to learn more about the business licenses and permits required for your business.
Finally, you also need to register for an Employer Identification Number (EIN) from the Internal Revenue Service. This is required if you plan to hire employees now or in the future. Many business lenders may also require an EIN when you apply for funding. If youâre a sole proprietor, you may opt to use your Social Security Number in lieu of an EIN.
Seek Business Funding
âIt takes money to make money,â as the old saying goes. As the owner of a t-shirt business, the amount of money you need to start and operate your business will vary according to your business model. If you have a small online shop, for example, your funding needs wonât be as great as if you’re operating a brick-and-mortar store.
Even if you have startup costs covered, there may come a time when you need additional capital for emergencies or operating expenses. If you canât fund these costs out-of-pocket, itâs time to apply for small business funding. Whether you turn to someone you know or apply with an online lender, there are several financing options available for your business.
Friends & Family
Know a friend, family member, or colleague looking to invest in a new business? Pitch them your business idea. Prepare your presentation carefully to let them know why your idea is a winner. In general, you have two options for getting funded by someone you know. The first is to take out a loan. Your friend or family member provides you with a set sum of money that is repaid over a period of time — along with interest. This is known as debt financing.
The next option is a strategy known as equity financing. With equity financing, an investor provides you with the capital you need to cover startup costs or operational expenses. In exchange, the investor receives ownership in your business. While you may not be required to immediately pay back the investorâs capital, they will be able to take a portion of the profits over time. They may also have some level of control when it comes to important business decisions.
No matter which route you take, always make sure everything is in writing and signed by all parties. Then, uphold your end of the bargain. Nothing can make a good relationship go south faster than a business deal gone wrong.
Small Business Loans
With a small business loan, you can receive a lump sum of money that you repay over time. In addition to repaying your principal loan balance, youâll also pay the lender interest and/or fees. Youâll make regular payments to the lender, which may be daily, weekly, monthly, or on another schedule.
Small business loans can be used for any business purpose, including funding an expansion, purchasing equipment for your business, or for use as working capital.
Recommended Option: LoanBuilder
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Time in business: 9 months
Business revenue: $42,000 per year
Personal credit score: 550
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You can fully customize your small business loan when you work with LoanBuilder. The LoanBuilder Configurator allows you to adjust your repayment terms and borrowing amount to create the right loan for your business.
Through LoanBuilder, you may be eligible to borrow up to $500,000. All loans come with one single fixed fee of 2.9% to 18.72% of the borrowing amount. Your fee is determined by the performance of your business and your credit history. Loans are repaid weekly over terms of 13 to 52 weeks.
To qualify for a LoanBuilder loan, you must meet the following requirements:
Time in business of at least 9 months
At least $42,000 in annual revenue
Personal credit score of 550 or above
Vendor Financing
As you build your t-shirt business, youâll establish relationships with vendors and suppliers. In an ideal world, youâd always have money in your bank account to cover the costs of your inventory and supplies. However, this isnât always the case. An emergency expense that depleted your account, a seasonal uptick in sales, or some other challenge may leave you struggling to pay your vendors upfront.
Many vendors do not offer their own credit programs, but there are lenders that offer vendor financing. With vendor financing, your vendors will be paid the full amount for their products or services while youâre able to pay off the expense over time. This prevents you from having to pay the full cost out-of-pocket for the inventory, supplies, and services you need to keep your business running smoothly.
Recommended Option: Behalf
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No specific time in business, revenue, or credit score requirements.
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Behalf provides vendor financing of up to $50,000 to qualified borrowers. You can repay your loan on a weekly or monthly schedule for up to 6 months.
Behalf charges a monthly fee for its service. Fees start at 1% and are based on the creditworthiness of the borrower. There are no additional fees to receive financing through Behalf.
There are no minimum credit scores, annual revenues, or time in business requirements, although a soft inquiry will be performed when you apply. You must have a U.S.-based business and a U.S. business bank account to qualify. Funds from Behalf canât be used to fund existing debt, such as credit card bills or payroll.
Lines Of Credit
A line of credit is a flexible financing option that allows you to access capital on demand. Instead of receiving one lump sum, a lender sets a credit limit. You can initiate multiple draws up to and including this credit limit. Once a draw is initiated, the lender will transfer the funds to your business bank account. Then, you will repay the money over time, along with any fees and/or interest charged by the lender.
Since a line of credit is a revolving form of credit, funds will be replenished as you pay off your balance. This allows you to have continuous access to capital when itâs needed. A line of credit can be used for any business purpose, including funding emergency expenses, purchasing inventory, or using as working capital.
Recommended Option: Lendio
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Time in business: 6 months
Business revenue: $10,000 per month
Personal credit score: 550
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Lendio is a loan aggregator that gives you access to over 75 small business lenders with just one application. One of the financing options available through Lendio is a business line of credit.
Through Lendio, you may qualify for a line of credit from $1,000 to $500,000. Rates range from 8% to 24%. You could receive funds in as little as one week after you submit your application.
To qualify for a line of credit, you must meet these requirements:
Time in business of at least 6 months
At least $50,000 in annual revenue
Personal credit score of 560 or above
If a line of credit isnât what youâre looking for, Lendio offers additional financing options, including:
Short-Term Loans
Equipment Financing
Business Credit Cards
Commercial Mortgages
Merchant Cash Advances
Startup Loans
Merchant Financing
If you need working capital and you use a service like PayPal to receive your payments, you may qualify for merchant financing.
Merchant financing is a short-term loan option for ecommerce businesses. Typically, qualifying is based on the performance of your business. The lender will provide you with a loan that is repaid over time with interest and/or fees.
Funds can be used for nearly any business purpose, from covering an emergency expense to buying more inventory or using as working capital.
Recommended Option: PayPal Working Capital
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Time in business: 3 months
Business revenue: Minimum $15,000 per year if you have a PayPal Business account, or $20,000 per year if you have a PayPal Premier account
Personal credit score: N/A
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If you accept payments through PayPal, you may qualify for the PayPal Working Capital program. Through this program, you can receive up to 35% of your annual PayPal sales as a loan. Your first loan can be up to $125,000.
PayPal Working Capital charges one set fee based on your sales history, the repayment percentage of your choice, and the loan amount. On days when no sales are made, no payments will be deducted. However, you must pay at least 5% to 10% of your total loan amount every 90 days.
To qualify for PayPal Working Capital, you must meet these requirements:
Have a PayPal Business or Premier account for at least 3 months
At least $20,000 in annual PayPal sales for Premier accounts or at least $15,000 in annual PayPal sales for Business accounts
No more than $20 million in annual PayPal sales
Business Credit Cards
Business credit cards work exactly like personal credit cards. The lender provides you with a set credit limit. You can use your card anywhere credit cards are accepted up to and including the credit limit.
The lender charges interest and fees on your balance until it is paid off. You do not have to pay off your balance in order to continue using the card provided you havenât met your credit limit. A business credit card is a revolving form of credit, so as you pay down your balance, funds become available to use again.
Business credit cards give you on-demand access to capital whenever you need it. You can use business credit cards to pay for an emergency, purchase inventory, or buy equipment. You can also use your credit card to pay for recurring expenses, such as utility bills or software subscription fees.
Recommended Option: American Express SimplyCash Plus
SimplyCash Plus Business Credit Card from American Express
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Annual Fee:
$0
Purchase APR:
14.49% – 21.49%, Variable
Required credit: Good, excellent
Bonus offer: None
Purchase intro APR: 0% for the first 9 months
Balance transfer intro APR: N/A
Foreign transaction fee: 2.7%
Rewards:
5% cash back at U.S. office supply stores and on wireless telephone purchases, up to $50,000 per year
3% cash back on a category of your choosing (airfare, hotel rooms, car rentals, gas stations, restaurants, advertising purchases, shipping, or computer hardware, software, and cloud computing), up to $50,000 per year
1% cash back on all other purchases
Notable perks & benefits:
Expanded buying power â buy above your credit limit with no penalty fees
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The American Express SimplyCash Plus card puts a new spin on credit cards. This is because this card allows you to spend over your credit limit without any fees. You can also receive cash back on all purchases â even if youâre over your limit.
The amount you can spend over your credit limit is based on your usage of the card, payment history, credit profile, and other factors. If you go over your limit, you simply need to pay the amount over the credit limit each month as part of your minimum payment. There are no fees for exceeding your credit limit.
With the SimplyCash Plus card, you can receive up to 5% cash back on your purchases. Wireless phone services and office supply store purchases yield 5% cash back on the first $50,000 spent each calendar year. You can also choose one category to receive 3% cash back on, such as advertising, shipping, hardware, or software purchases for the first $50,000 spent each calendar year. All other purchases receive 1% cash back.
There is no annual fee associated with this card. Youâll also receive a 0% introductory rate for the first 9 months. After that, variable APRs range from 14.49% to 24.19% and are based on creditworthiness.
To qualify for the American Express SimplyCash Plus card, you must have excellent credit.
Recommended Option: Spark Classic For Business
Spark Classic From Capital One
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Annual Fee:
$0
Purchase APR:
25.24%, Variable
Required credit: Fair
Bonus offer: None
Purchase intro APR: N/A
Balance transfer intro APR: N/A
Foreign transaction fee: None
Rewards:
Unlimited 1% cash back on all purchases
Notable perks & benefits:
Free employee cards
Fraud coverage and alerts
Capital One and Visa business benefits
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Donât have perfect credit? Consider applying for Capital One’s Spark Classic for Business credit card. This rewards card gives you unlimited 1% cash back on all of your business purchases. There is no annual fee, and the card has a variable APR of 25.24%.
Additional benefits of Spark Classic for Business include free employee cards, fraud coverage, and extended warranty protection. This card also allows you to build your business credit so you can qualify for additional financing options in the future.
Applicants must have a fair credit score to qualify for the Spark Classic for Business card.
Choose Business Software
Youâre one step closer to launching your business. Now, itâs time to choose the software you need to run your business effectively and efficiently. Some of the business software programs you may need for your t-shirt business include:
Bookkeeping Software
Bookkeeping software allows you to keep an eye on the financials of your business. With this software, you can easily track your business expenses, accounts receivable, and payroll. Many bookkeeping programs also allow you to track other aspects of your business, such as inventory.
With bookkeeping software, youâll always know where your business stands financially. Youâll be able to run and print reports as needed, which may be required when you apply for business financing. Having all transactions reported in bookkeeping software can also help you prevent headaches when tax time rolls around.
No accounting experience? No problem! Check out The Beginner’s Guide to Accounting.
Payment Processing Software
If you plan to accept credit cards or other methods of payment, you will need payment processing software. Your payment processor will act as the communicator between your bank and the bank of your customers, allowing you to process credit cards, debit cards, and other forms of payment.
Point-Of-Sale System
If you want a more sophisticated way to manage your sales, youâll need a point-of-sale (POS) system. A POS system not only includes credit card processing, but it also offers additional features including barcode scanning, inventory tracking, printing receipts, and reports and analytics.
Mobile POS systems allow you to use your app or smartphone to accept payments and keep your business running efficiently. There are also more advanced systems that include hardware such as monitors, keyboards, printers, cash drawers, and scanners.
Advertise Your Business
Youâre almost to the finish line and ready to open your doors ⦠or your online business. Before you launch, though, itâs time to think about advertising. After all, if no one knows about your t-shirt business, how are you going to make any sales? Donât wait until after you launch to spread the word about your business — start right now with these advertising tactics.
Social Media
From middle schoolers to your own grandparents, it seems like everyone is on social media these days. Use this to your advantage to let potential customers know about your t-shirt business.
The great thing about social media is that setting up your profiles is absolutely free. You can also get started in just minutes. Set up pages for your business on Facebook, Twitter, Instagram, and/or Pinterest. Include critical information about your business on each profile including your contact information, website and/or online shop link, and photos of your t-shirts. Later, you can use your profile to share news about your business and new products, advertise sales, or host giveaways.
You can also look into advertising on social media. You can purchase ads for any budget and customize your target audience to get your name out to potential customers.
Another option to consider is talking to social media influencers. Social media influencers recommend products to thousands of followers, helping companies drum up new business. If an influencer wears your shirt and links to your website, you could see an influx of customers.
Some businesses will send a free sample of their products to social media influencers. While this does mean some out-of-pocket costs for you, the exposure you could receive could be well worth the small expense.
Want to learn how to take your social media marketing to the next level? Learn more in our Guide to Social Media Marketing.
Build Your Website
In addition to your social media profiles, you also need a website to build your web presence. Website builders make it easier than ever for you to create your own professional website. You can also easily build an online shop with todayâs modern ecommerce platforms.
When you build your website, make sure that it is designed to appeal to your target audience. Donât forget to include information on your website such as contact info, details on your products, and clear photos of what your business offers. As you build up your website, you can include additional information and features such as online chat options, FAQs, news and updates, and reviews and testimonials.
Word Of Mouth
Never underestimate the power of word-of-mouth advertising. The trick to this one is simple: provide high-quality products and exceptional customer service. If someone buys one of your t-shirts and is pleased with the quality, theyâll be proud to wear it and tell others about your business. If the shirt was poorly made or customer service was lacking, theyâll also tell others.
Word of mouth advertising is an easy and free way to get the word out about your new business. And donât be afraid to toot your own horn. If someone gave a great review, share it on social media and your website. Donât be afraid to ask customers to give their feedback, but donât be pushy. Also, learn to accept criticism. Not all of your reviews and feedback will be glowing. Instead of taking offense, learn from it. Where is your business lacking? How can you make sure that each customer that purchases your t-shirts is fully satisfied? Never stop trying to improve your business, and always provide the best products and customer service to keep your customers coming back for more.
Final Thoughts
Owning and operating your own t-shirt business can be fun, exciting, and lucrative, but donât be fooled ⦠a lot of hard work is necessary to make your business a success. Donât rush the process. Instead, take the time to plan out your business, create unique designs, and provide high-quality products and service that will draw customers to your business.
Want to learn more about starting your own business? Download our small business guides for the information and tips you need to launch your business venture.
The post How To Start And Fund A T-Shirt Business appeared first on Merchant Maverick.
Can you picture making a profit by keeping the lawns of homes and businesses in your area looking their best? Youâre not alone. For many aspiring entrepreneurs, starting a lawn care business sounds like a practical and achievable way to make money and be their own boss — a dream come true, in other words. If youâre reading this, youâre ready to take the next step toward making that dream a reality.
Starting a lawn care business seems easy. Just grab up some lawn equipment, find a couple of guys willing to do physical labor, and get started, right? Not exactly.
Like any other small business, building a successful lawn care business takes careful planning and hard work. You have to be willing to put in the time, effort, and money required to start and grow your business. A lawn care business may have low overhead and lower initial risk than other types of businesses, but it isnât a cake walk. However, over time, youâll begin to see the fruits of your labor through the beautiful lawns in your city or town and the profits sitting in your bank account.
In this guide, weâll break down the steps for starting your own lawn care business. Weâll start off with the importance of your business plan and what it should include. Weâll go over what you need to get started — and itâs more than just lawn equipment. Weâll talk about the costs youâll encounter and how to get the financing to cover those costs. Weâll also discuss ways to bring in customers ⦠and profits.
Letâs get started!
Create A Business Plan
Every business is different, but all businesses need one thing to be successful: a business plan. Your future lawn care business is no exception. Even if your business concept seems simple, having a solid business plan in place is a necessity.
Think of your business plan as a roadmap of your business. You wouldnât go on a long trip without a map or GPS, or put together a complicated piece of furniture without instructions, right? View your business in the same light.
Your business plan outlines your goals for the future. In other words, how will you get from where you are now — a startup business — to your goal? Every entrepreneur has a different goal. Maybe yours is to make $1 million in revenue within five years. Maybe itâs to expand throughout your state. Maybe you want to build a franchise that will go nationwide. No matter what your goals are, they need to be outlined in a solid business plan.
All business plans are different, but there are a few key sections that should be included in all plans. Those include:
Executive Summary: A short summary of your business plan and the value proposition of your business
Business Description: What does your business do? Include your mission statement and when your business was formed.
Organization: Who are your team members and what do they do within the organization?
Market Analysis: Include information about the market and your competition
Marketing Strategies: How do you plan to market your business to draw in customers and bring in profits?
Financial Projections: Use revenue growth and market trends to project the financial outlook of your business
Not only is your business plan critical to the growth of your company, but itâs also an absolute necessity if you plan to seek funding from outside sources — such as investors or banks — in the future.
Determine What Equipment You Need
To operate a lawn care business, you need to have the right tools and equipment for the job. While you may start off small and add to your inventory as your business grows, there are a few critical pieces of equipment you need to get started. For most lawn care businesses, major equipment includes:
Riding Lawnmower
Push Lawnmower
Edger
Hedge Trimmer
Leaf Blower
Truck
Equipment Trailer
For your business, youâll also need equipment thatâs less expensive but just as critical to operations. This includes:
Lawn Tools
Hand Tools
Lawn Bags
Eye/Ear Protection
Gloves
Gas Cans
Oil
Garden Hoses
You should expect to spend approximately $30,000 to $40,000 for the equipment you need to start your business. As your business grows, of course, youâll need additional capital for the purchase of more equipment. For example, you may have just one truck, trailer, and mower for now, but if you have additional crews taking on jobs all over the area, youâll need more equipment.
You may even opt to offer additional services — installing sod, laying mulch, or planting flowers — all of which require additional equipment and supplies. For now, however, focus on the equipment listed above. Those items will be most critical to getting your business off the ground.
Calculate Startup Costs
With an idea of the type of equipment you need to launch your business, you can now begin calculating startup costs. This will include the cost of your equipment, plus other necessary expenses to keep your business operating smoothly.
Your equipment will make up the bulk of your costs, and you should budget approximately $30,000 to $40,000 for these purchases. You may be able to get started with a smaller investment by purchasing used equipment. However, purchasing used does come with its risks. Older trucks can break down and previously-owned lawn equipment may immediately require servicing or repairs. While you can save money in the short term by buying used equipment, you may rack up additional expenses over the long term, so consider your purchases carefully.
When purchasing your equipment, shop around. Look online and visit local retailers to get estimates of costs. Determine what equipment you really need now and what you could add as your business grows. You may even consider starting with basic equipment (do you actually need that fully-loaded riding mower right this minute?) and upgrading your equipment when your business starts bringing in revenue.
Beyond the equipment weâve already discussed, youâll need additional supplies for your business. This may include chemical weed killers, pesticides, fertilizer, and other supplies. You may purchase these supplies upfront, or you may purchase them when needed. If you plan to keep inventory, you may incur additional costs if you rent storage for your supplies and equipment.
Another big startup cost to consider is the cost of insurance. You will need to have auto insurance on your truck. You will also be required to carry liability insurance. If you hire employees now, additional costs may include workmanâs comp insurance and payroll taxes. Other startup costs include fees for permits and licenses. Weâll discuss obtaining licenses and permits a little more in the next section.
If youâre starting small as a one-person operation, your primary startup costs will be your equipment, supplies, insurance, and marketing costs. Just remember to take your time to do your research, plan, and budget to keep startup costs under control.
Register Your Business
Before you begin operating, you’ll need to register your business. There are several steps required to register a new business:
Choose & Register Your Business Name
While you may choose to operate your business under your own name, most small business owners choose a trade name. This name will need to be registered in the state where you will operate.
When choosing your name, you want to select one that is a reflection of your brand. You will also need to make sure that you select a name that is not registered by someone else in your state. You can find your stateâs registration database with a quick online search.
Choose Your Legal Structure
One of the first steps in setting up your business is determining your legal structure. Your legal structure determines how much you pay in taxes and your personal liability for your business. Legal structures include:
Sole Proprietorship: This gives you full control over your business. You do not have to register this type of entity, so you skip over all the paperwork. However, this structure does not separate your personal assets and liabilities from those of your business. This means that you can be held personally liable for all debts and obligations of your business.
Partnership: This structure is the simplest structure for businesses that have two or more owners. A limited partnership (LP) gives one partner unlimited liability, while other owners have limited liability and limited control over the company. A limited liability partnership (LLP) gives limited liability to all owners, protecting each against the debts of the business and the actions of other partners.
Limited Liability Company: A limited liability company (LLC) protects you from personal liability from business debts and obligations. For example, your house, vehicle, or savings accounts will be untouchable if your business faces a lawsuit or files for bankruptcy.
Corporation: Corporations pay higher taxes and are more expensive to form. However, corporations can also raise money through the sale of stock. This structure is best for businesses that need to raise high amounts of capital or want to go public in the future.
Most lawn care business owners will register as a sole proprietorship or LLC, but consider the number of owners you have, protecting yourself from personal liability, and the future goals of your business before you make your decision.
Register With The IRS & State Revenue Agency
If you plan to have employees now or in the future, you will need to register for an Employer Identification Number. Youâll also request estimated tax vouchers from both the IRS and your state revenue office to file with your quarterly tax payments.
Obtain Licenses & Permits
The licenses and permits that you need for your business are based upon the laws of your municipality and what your business will do. For example, simply mowing lawns only requires a standard business license in most areas. However, if you plan to spray chemical herbicides, an additional license may be required. You can find out more about license and permit requirements by contacting your stateâs Department of Commerce.
Seek Funding
Weâve already discussed the potential expenses youâll encounter when opening your own lawn care business. Now, the big question is: how do you pay for it all? Like most aspiring entrepreneurs, your personal bank account likely isnât bursting at the seams with more money than you know what to do with.
If youâre scratching your head trying to figure out finances, youâre certainly not alone. Most small business owners donât have the funds needed to start and operate a new business. This is where small business funding plays a role.
There are more lenders than ever that are ready to give you the money you need to get your business off the ground. The trick is knowing what type of funding is best for your business and exactly where to find it.
Personal Savings
If youâve socked away money in personal savings through the years, this money could be used to fund your new business venture. The best thing about using your own money is that you arenât indebted to anyone. You donât have to worry about loan payments, fees, and high interest rates. On the downside, if your business fails, it takes your savings with it.
Friends & Family
If you have a friend, family member, or colleague with money to invest, consider pitching your idea to them. Present them with your business plan and give a presentation just as you would give to a banker or other lender.
There are a few ways you can go about getting capital from someone you know. The first is a loan. Agree to rates, terms, and the borrowing amount and get it all in writing. Then, youâll repay the borrowed funds plus interest over a set period of time, just as you would any other loan.
Another option is equity financing. Youâd receive capital for your business and in exchange, your investor would own part of your company. You wouldnât pay back the money immediately like you would a loan, but the investor would be able to take a share of your profits at a later time. Learn more about debt financing vs. equity financing.
No matter which way you go, keep everything professional and make sure everything is in writing. One thing that can sour a good relationship fast is a business deal gone bad.
Personal Loans
As a new business owner, walking into your bank to get a business loan is pretty tough ⦠if not impossible. Banks look at your business and personal credit score, annual revenues, and your time in business. These lenders want to work with small businesses that are established and have the lowest risk. If youâre new to the game, many lenders wonât give you a second look.
This doesnât mean that youâre only stuck with high-interest, short-term loan options. If you want a long-term loan with low rates, consider a personal loan for business. With these loans, you can qualify based on your personal income and credit score â no business information required.
You can apply for a personal loan for business through your bank, credit union, or an online lender. The most creditworthy borrowers will qualify for the best rates and terms and highest borrowing limits. A personal loan for business is a great option for larger purchases that youâd like to pay off over a longer period of time, like expensive equipment.
Recommended Option: Upstart
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Time in business: N/A
Personal credit score: Minimum 620
Business revenue: N/A
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Through Upstart, you can receive a personal loan of $1,000 up to $50,000 to use for your startup costs. APRs range from 8.09% to 35.99%. Your loan will be repaid over a period of 3 to 5 years.
Upstart is different from other lenders in that they look at more than just your credit score. While the lender does consider your credit score, education, years of credit, and job history are also factors used to determine if you qualify for a personal loan.
To qualify for an Upstart loan, you must:
Have a personal credit score of at least 620
Live in a state serviced by the lender
Have a regular source of income
Have a bank accountÂ
Equipment Financing
Equipment financing is a type of funding used to purchase equipment. Instead of paying the full cost of your equipment up front, youâll make a smaller down payment. A lender will cover the rest of the cost, which youâll pay back over time along with fees and interest.
There are two different types of equipment financing: equipment loans and equipment leases. If you take out an equipment loan, youâll typically pay 10% to 20% of the total purchase price as a down payment. Borrowers with high credit scores may qualify for 0% down financing. Once the down payment is paid and the loan is in place, youâll be able to immediately take possession of your equipment. Youâll pay for the total purchase price of the equipment plus interest over a set period of time — typically around 5 years. Once youâve made all payments as agreed, the equipment is yours to keep, trade in, or sell.
An equipment lease is more like renting. Youâll pay a down payment and take immediate possession of the equipment. Youâll make payments to your lender over a shorter period of time, usually 2 years. Once your lease period ends, youâll return the equipment and sign another lease for newer equipment. Some lenders may allow you to pay off your balance if you want to keep the equipment youâve been using.
Learn more about equipment loans and leases and which is right for you.
One of the best things about equipment financing is that you donât have to put up collateral to secure your loan. Instead, the equipment itself serves as the collateral and can be repossessed if you default on your loan or lease.
With equipment financing, you can purchase any type of equipment you need for your business, including lawnmowers, edgers, trimmers, or even a commercial vehicle.
Recommended Option: Lendio
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Time in business: 6 months
Business revenue: $10,000 per month
Personal credit score: 550
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Lendio is a loan aggregator that connects you with multiple lenders with just one application. Through Lendio, you can apply for equipment financing from $5,000 to $5 million with repayment terms of 1 to 5 years. Interest rates start at 7.5%.
To qualify for equipment financing, you must meet the following requirements:
Annual revenue of at least $50,000
Personal credit score of 650 or higher
Time in business of at least 12 months
If your credit score falls below the 650 minimum, you may be able to qualify with proof of solid cash flow and revenue for the last 3 to 6 months.
Even if you donât meet these requirements, you could still qualify with certain lenders. Simply fill out Lendioâs free application or contact a personal funding manager. If you donât qualify for equipment financing or have other financial needs, you can also apply for Small Business Administration loans, short-term loans, startup loans, and Lendioâs other financial products.
Lines Of Credit
If you want a flexible form of financing, a line of credit might be right up your alley. Youâll be able to initiate draws from your line of credit, and the lender sends the funds immediately to your bank account. You can make one or more draws from your line of credit up to and including your set credit limit.
Since a line of credit is revolving, your funds will become available to use again as you pay down your balance. Interest and/or fees are charged on the borrowed portion of funds. If you donât use your line of credit, you wonât pay interest to the lender. Many lenders also wonât charge any fees if you havenât used your funds.
A line of credit is a good option when you need immediate access to cash, such as to purchase supplies or to pay for an unexpected expense, like repairs to your vehicle or equipment.
Recommended Option: Fundbox
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No time in business requirements, but must have used a compatible accounting or invoicing software for at least 2 months, or a compatible business bank account for at least 3 months.
Business revenue: $50,000 per year
No specific personal credit score requirement
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You can qualify for up to $100,000 when you apply for a Fundbox line of credit. Fundbox fees start at 4.66% of the borrowing amount. You only pay when you use your funds, and you can save by repaying early. Payments are made weekly over a period of 12 or 24 weeks. You may receive a line of credit based on the performance of your business or for your unpaid invoices.
To qualify for a Fundbox line of credit, you must meet the following minimum requirements:
Be a U.S.-based business
Own a business checking account
Have at least $50,000 in annual revenue
Have a bank account with transactions for at least 3 months OR at least 2 months of activity in supported accounting software
Qualifying through Fundbox takes just minutes. If approved, youâll be able to initiate draws on your line of credit immediately for deposit in your account as quickly as the next business day.
Rollovers As Business Startups (ROBS)
Do you have a retirement account? If so, you may qualify for a unique type of funding known as Rollovers as Business Startups (ROBS). You probably already know that early withdrawal from your retirement account results in penalties. But there is a way to access these funds without being penalized, and yes, itâs completely legal.
A ROBS plan allows you to roll over your qualifying retirement funds into capital for your new business. Hereâs how it works:
A new C-corporation is created
A new retirement plan is created for the C-corp
Funds are rolled over from your existing retirement plan to the new retirement plan
These funds are used to purchase stock in the C-corp, giving you the capital you need to start or grow your business
Even though itâs just four steps, there are some legal issues to be aware of. This is why entrepreneurs that leverage their retirement funds in this way turn to a ROBS provider. A ROBS provider will handle everything for you, from setting up the new C-corp to maintaining compliance. In exchange, you pay a setup fee and a monthly maintenance fee.
Funds from your ROBS plan can be used for any business purpose. One of the best things about a ROBS plan is that you wonât be making payments with interest to a lender. You also donât have to worry about traditional borrower requirements like personal credit score or annual revenues. As long as you have a qualifying retirement plan, you can set up a ROBS plan. The main drawback, however, is that if your business fails, you lose your retirement funds, so be aware of this risk before setting up your plan.
Recommended Option: Benetrends
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Varies based on the type of financing you seek.
Must have a personal credit score of 660 or above.
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Benetrends is the creator of the innovative Rainmaker Plan, the original ROBS plan. Benetrends can get the funding you need for your business in as little as 10 days. You will have access to your retirement funds with no penalties with Benetrendsâ easy four-step process.
There are no credit score, time in business, or revenue requirements. Most retirement plans with at least $50,000 qualify.
A setup fee of $4,995 is required to start your ROBS plan. After paying this initial cost, you must pay a service fee of $130 per month. This fee covers compliance, audit protection, and other services.
Purchase Financing
When you start your lawn care business, youâll likely develop relationships with vendors. You can pay these vendors out of pocket when you receive your invoice, or you can break your purchase down into smaller, more manageable payments with purchase financing.
With purchase financing, a lender will pay your vendor up front. Youâll repay the lender the borrowed amount plus fees and/or interest through smaller payments made over a longer period of time. This is an excellent way to purchase supplies and other items critical for the success of your business when youâre facing cash flow issues or just need a little extra time to pay.
Recommended Option: Behalf
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No specific time in business, revenue, or credit score requirements.
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Behalf offers purchase financing, allowing you to pay any merchant with terms up to 6 months. With Behalf, you can borrow between $300 and $50,000. Monthly fees start at just 1%, and there are no origination fees, membership fees, prepayment fees, or maintenance fees.
There are no minimum time in business, revenue, or personal credit score requirements. However, a hard pull of your credit is performed by the lender and will be used to determine if youâre eligible to receive funding, as well as your monthly fee.
Business Credit Cards
A business credit card is a great way to cover expenses or make purchases without waiting for approval from a lender. Once youâre approved for a credit card, youâll be able to spend up to and including your credit limit anywhere credit cards are accepted.
Once youâve made a purchase using your credit card, youâll be required to make a monthly payment until you repay your balance, plus interest charged by the credit card issuer. This is a type of revolving credit, so as you repay, funds will be available to use again. Once youâre approved for a credit card, you donât have to wait for approval to make a purchase. You can make one or multiple purchases up to and including the credit limit set by the lender.
You can cover an emergency expense or purchase supplies using a business credit card. You can also use credit cards for recurring expenses, such as gas for your truck and machines. With a rewards card, you can even get cash back or perks just for using your card.
If you donât qualify for a business credit card, consider applying for a personal credit card to use for business expenses.
Recommended Option: Spark Cash For Business
Capital One Spark Cash For Business
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Annual Fee:
$95 ($0 the first year)
Purchase APR:
18.74%, Variable
Required credit: Good, excellent
Bonus offer: $500 cash back if you spend at least $4,500 in the first 3 months of opening your account
Purchase intro APR: N/A
Balance transfer intro APR: N/A
Foreign transaction fee: None
Rewards:
Unlimited 2% cash back on all purchases
Notable perks & benefits:
Rewards can be requested as cash back or applied as statement credits
Employee cards at no additional cost
Capital One and Visa business benefits
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The Spark Cash card from Capital One offers unlimited 2% cash back that you can redeem anytime. New cardholders can earn a $500 cash bonus just for spending $4,500 within the first 3 months of opening their accounts. This business credit card has a 19.24% variable APR. There is no annual fee for one year, and the fee is $95 after the first year. Employee cards are available at no additional cost.
To qualify for this credit card, you must meet these requirements:
Excellent personal credit score
No bankruptcies
No defaults on loans
No payments over 60 days late on a credit card, loan, or medical bill for the last year
A loan or credit card for at least 3 years with a credit limit above $5,000
Recommended Option: Chase Ink Preferred
Chase Ink Business Preferred
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Annual Fee:
$95
Purchase APR:
18.24% – 23.24%, Variable
Required credit: Good, excellent
Bonus offer:Â 80,000 points if you spend at least $5,000 within the first three months of opening your account
Purchase intro APR:Â N/A
Balance transfer intro APR:Â N/A
Foreign transaction fee: None
Rewards:
3 points per dollar spent on the first $150,000 in combined purchases on travel, shipping purchases, internet/cable/phone services, and advertising purchases made with social media and search engines each account anniversary year
1 point per dollar on all other purchases
Notable Perks & Benefits:Â
Points are worth 25% more if redeemed for travel via Chase Ultimate Rewards
Points can be transferred to other travel programs on a 1:1 point basis
Points do not expire while your account is open
Employee cards at no additional cost
Cell phone protection
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Another business credit card to consider is the Chase Ink Business Preferred card. With this card, you’ll be able to rack up points just by making purchases for your business. All travel, shipping, advertising, internet, cable, and phone purchases yield three points for every dollar spent for the first $150,000 spent annually. You’ll receive one point for every dollar spent on all other business purchases with no limitations.
You’ll also be eligible to receive a bonus offer of 80,000 bonus points if you spend $5,000 within 3 months of opening your account. Points can be redeemed toward cash, gift cards, or other products and services.
Chase Ink Business Preferred has a variable interest rate of 18.24% to 23.24%. The card has an annual fee of $95. Other benefits are also provided for cardholders, including cell phone protection and free employee cards.
To qualify for this card, you must have good to excellent credit.
Bolster Your Web Presence
The internet has made life easier than ever for small business owners. After all, you can do your accounting online, shop for supplies and equipment, and communicate with customers. Perhaps most importantly, you can market your business online. Bolstering your web presence is a quick and easy way to reach your target market, helping you bring in new customers and boost your profit potential.
Set Up Social Media Profiles
Social media has morphed into something much bigger than just chatting with family and friends. These days, people are using social media to find and connect with new brands and businesses. Shouldnât your new business be included?
One of the best things about social media is that itâs free to set up your profiles. Add your business to Facebook, Twitter, Google+, Instagram, LinkedIn, Yelp, and/or Pinterest. With these social media profiles, you can share information about your business such as operating hours and services provided, post photos of completed jobs, promote specials, or share news about your business. On sites like Facebook, satisfied customers can even post reviews and ratings.
Want to learn how to get the most out of your social media pages? Take a look at our Guide to Social Media Marketing.
Build Your Website
Most people turn to the internet when theyâre looking for a service provider, which is why itâs so important to have a website. No experience with web design? Donât worry — there are a variety of web builders that do the hard work for you. Check out some of our top picks.
Your website doesnât have to be complicated. Make sure that your design fits your brand and provides the most relevant information that customers need, including a list of services provided, your service area, and your contact information. You can even take it a few steps further by adding photos of jobs youâve successfully completed, price lists, special promotions, and news and updates.
One last thing to note is that when you choose a domain name, make sure that it reflects your brand and includes your business name. However, you also want to make sure that itâs short and easy to remember. Avoid using symbols and numbers to make it easier for current and future customers to find you online.
Check out more tips and tricks for creating and maintaining your web presence.
Choose Business Software
Every business — including your new lawn care business — needs business software to keep operations running smoothly. You can use business software to keep track of appointments, store customer data, process payments, create invoices, and keep up with your financials. Letâs explore a few types that would be useful for your lawn care business.
Accounting Software
Managing your finances is one of the most important aspects of running a business. Accounting software makes it easier than ever to track your finances. With this type of software, youâll be able to keep up-to-date on the money that you receive, what is owed to you, and what you owe. In addition, using accounting software also makes it easier for you to run important financial statements and file your taxes.
Todayâs accounting software comes with more features than ever, including cloud-based storage, online invoicing, automatic payment reminders, and mobile apps for tracking on the go. Unsure of which software is best for you? Check out some of our recommendations. If you’re new to accounting or need a refresher, make sure to download our eBook, The Beginner’s Guide to Accounting.
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A great choice for freelancers needing some extra help managing their business
Payment Processing Apps
Very few businesses today are âcash only.â This is because credit cards, debit cards, and even mobile devices make it easier than ever for consumers to pay for their purchases. To make payments more convenient for your customers, consider using a payment processing app.
Payment processing software transmits data between you, your bank, and your customerâs bank, allowing you to accept credit cards, debit cards, and other forms of payment. Many payment processors also include the hardware needed to accept these methods of payments. This hardware may be included in your subscription cost or for an additional fee.
Worried about bulky hardware? Donât be. There are devices that easily affix to a mobile phone or tablet, so you can take payments anywhere — from your own office to your customerâs front yard.
Best Overall Mobile POS
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Highlights
No contract or monthly fee
Instant account setup
Retail upgrade available
Restaurant upgrade available
For iOS and Android mobile devices
2.75% per in-person card swipe
Retail POS:Â Free trial ($60/mo value)
Â
Restaurant POS: Free trial ($60/mo value)
Â
Square POS: Always free
Field Service Management Software
Another type of software to consider purchasing for your business is field service management software. This software allows you to keep up with everything from your customers to your employees. There are even programs that are specific to lawn care companies.
With this type of software, you can keep up-to-date records on your customers, from their contact information to their history of appointments. With this software, you can easily schedule new appointments and dispatch employees. Other features may include automatic invoicing, route optimization, easy estimates, and GPS tracking.
Advertise Your Business
In order to make your business successful and profitable, you have to have customers. And you have to reach customers by spreading the word about your business.
While bolstering your web presence is a good first step, donât stop there. Consider purchasing paid ad space on social media platforms or search engines to reach a broader audience. Yelp for Business is an excellent way to advertise yourself while gaining street cred with potential clients.
You can also utilize free online sites like Craigslist to advertise your business. Just remember to follow the rules before posting and avoid spamming the website.
Moving beyond the web, never underestimate the power of âold schoolâ marketing techniques like flyers and door hangers. Post flyers in areas that get a lot of foot traffic, such as retail shopping centers, and put door hangers around your neighborhood and surrounding areas. You can design and print these yourself, or you can pay an additional fee to a professional printer. Either way you go, this is a very affordable way to market your lawn care business. Before you use this method of advertising, contact your city government office to learn about any restrictions and always make sure to get the permission of the property owner before distributing flyers on private property.
You can also use your work truck to advertise your business. Make sure that your business name, telephone number, and/or URL are prominently displayed and easy to read. Online printers can create custom vinyl decals featuring your logo, name, and contact information at a very affordable price.
Finally, word-of-mouth advertising is one of the most effective methods of advertising in this industry. If your customer likes your service, theyâll tell their friends, family members, neighbors, and colleagues about your service when recommendations are needed. They may give you a glowing review on your website or social media page, which could lure in additional customers. Always make sure to provide the best service to your customers so theyâll refer you to new customers in the future.
Final Thoughts
Your new lawn care business wonât be up and running overnight, but taking the time to go through each step ensures a better chance for success. Every business is different, and you may need to tweak some of these steps to better fit the vision for your lawn care business. Maybe taking the steps in a different order makes more sense for your business, or maybe thereâs a step that isnât relevant to your future goals.
No matter how you picture your future, youâre now armed with the knowledge of what it takes to start your own lawn care business. Now, itâs up to you to determine what steps youâll take next to become a successful entrepreneur.
The post How To Start A Lawn Care Business appeared first on Merchant Maverick.
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The beginning of a new year is a good time to think about what has passed and what is to come, but this time shouldn’t be limited to personal reflection alone.
As a small business owner, give yourself an opportunity to reflect on your business and its finances. What worked last year? What didn’t work and why? Where do you want to be a year, two years, five years from now? What will it take to get there?
Once you’ve spent some time reflecting, start creating new goals to strive for. There’s no better time to reevaluate your business strategy or implement new financial processes than at the start of the new year. Build on what you learned in 2017 and make 2018 even better by creating financial and business resolutions.
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Business Resolutions To Consider
Here are some possible financial resolution ideas to help get you thinking about how to make this year a success for your business…
Create A Budget & Stick To It
This could be the year to create, implement, and stick to a reasonable budget. Most accounting software programs make it easy to create yearly budgets, and some even allow you to use last year’s data as inspiration.
Increase Sales
Who doesn’t want to increase sales? Begin by considering practical ways to make this happen, like creating specific motivations for your sales staff or expanding your clientele. Use your existing accounting software to drill into your sales records and analyze the trends in your business. What sells well? What type of customers buy your products? Leverage this data to make informed decisions going forward.
Go On An Expense Diet
It might be time to cut back on the expenses. Use your existing accounting software and purchases records to pinpoint unnecessary spending. Find ways to automate processes so you can save time on projects and avoid paying excess wages. When it comes to the overall profitability of your business, this is one diet that isn’t so hard to stick with.
Reinvest Money In Your Business
Did your business make a decent profit in 2017? This year, make it a point to reinvest in your company. Increase your company’s assets, or buy those new computers everyone has been needing to boost productivity. Incentivize your employees to stay by providing more benefits or increasing wages. The more you invest, the more return you’ll see.
Try A New Marketing Strategy
Marketing is always changing and adapting. The New Year is a great time to evaluate your current marketing strategy to see what’s paid off and what hasn’t. Continue practicing the strategies that work, dump the ones that don’t, and don’t be afraid to experiment with some new strategies during 2018.
Pay All Bills On Time
A New Year’s Resolution doesn’t have to be grand and impressive. Your resolution could be as simple as paying your bills on time. If you struggled to get all of your bills paid on time in 2017, make it a priority to stay on top of that this year. Use your accounting software to set reminders and automate your billing if needed.
Stay On Top Of Invoicing
It’s easy to get backed up on invoicing. But when invoices are your company’s bread and butter, it’s important to follow through. Fortunately, almost all accounting software allows you to set up invoicing automations and automatic late-payment reminders. QuickBooks Online even has an invoice scheduling feature when you can schedule invoices to be sent at a later date.
Keep Better Tax Records
If tax time is looming large for you right now, a good New Year’s Resolution would be to keep better tax records for next year. Use your accounting software to keep financial records and check out what tax support your accounting software offers.
Switch Accounting Software
There’s no better time to switch accounting software than at the beginning of a New Year. If your software isn’t cutting it, maybe this year should be about finding a program that actually works for your business. Check out our accounting software comparison chart and read our comprehensive accounting software reviews to see which software is right for you. If you need extra help, read our Complete Guide to Choosing Online Accounting Software.
Update Existing Accounting Software
Even if you don’t want to switch to a new accounting software program, it might be time for an upgrade. This could definitely be the case if you use an old locally-installed program. Read 5 Signs It’s Time to Update Your Accounting Software and start your new year right with the best-performing accounting software.
Add A New Software Integration
Integrations are a great way of adding extra features to your accounting software. Integrations can cover everything from project management to time tracking, email marketing, analytics, scheduling, and much more.
Reconcile Your Bank Accounts Every Month
Were you overwhelmed last year when closing your books? Make things easier on yourself by striving to reconcile your bank accounts each month. Not only will this help you to be less stressed, it will help you to be more proactive with your business’s finances.
Automate Your Business Processes
Perhaps, when looking back on last year, you realized how many day-to-day business processes could be streamlined. This year, choose to automate your business as much as you can. Use your accounting software to automate invoicing and billing. Or take advantage of software integrations like MailChimp to automate your email marketing.
Make Resolutions A Reality
We all know how resolutions go. You are oh-so committed at the beginning of the year, but come March, the diets have been forsaken, the gym memberships are wasted, and nothing is accomplished like you thought it would be. But this doesn’t have to be the case.
There are several tricks you can employ to make your financial resolutions last.
First of all, break the resolution up into smaller, manageable tasks. Resolutions often involve worthy but intangible ideas. Take ‘increasing sales,’ for example. This is a great idea, but how do you achieve it? Break it into achievable components. You could start by running a sales rep competition for the most sales, breaking out a new social media marketing strategy, or implementing a loyalty program to encourage buyers to come back.
Second of all, don’t go at it alone. Bring your whole team in on your business resolutions. Let them know what your goals are for the year so you can all work together to achieve them — and hold each other accountable. Your team may even have a few ideas of their own.
Now that you have a few potential financial resolutions for your business, run with them or come up with new ideas all your own. Whatever you do, don’t let this precious time of reflection and new beginnings go to waste. Seize the opportunity to regroup and create new business goals for yourself and your team. 2018 is yours for the taking!
Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.
