By Aaron Allen
The Seattle Medium
As we continue to evolve into a post-Covid society, many Black people are embracing entrepreneurship and the significant role it can play in building wealth, creating employment opportunities and celebrating diverse cultures.
Much of the growth of Black-owned businesses in American has been fueled by Black women, who are the nation’s fastest growing demographic of entrepreneurs. In fact, over one million new businesses started over the last decade are owned by entrepreneurs of color.
“Black businesses are really surging and a lot of them are owned by Black women which I think is really cool,” says Shelia Winston, a Small Business Consultant with Chase. “I’ve noticed ever since the pandemic more and more people are going into business realizing they can do it themselves and they want to have a swing at it and not to be so dependent on employers.”
According to Winston, starting a business requires a long-term commitment to your idea, planning and discipline. One may have a great business concept, but before you start opening stores or selling products there are six steps that Winston believes that perspective business owners should take in order to start their business off on the right foot.
Make it official…legally
When establishing your business aspiring business owners should first choose the business classification that they feel is best for them and their business (i.e. a limited liability corporation (LLC), a limited liability partnership (LLP) or a corporation). According to experts, registering your business as an LLP, LLC or corporation is vital because it makes your business a separate legal entity and forms a financial protection barrier between you as the owner and your business.
“Yes, the first step in starting your business is you have to make it legal,” says Winston. “And by that, I mean there are different entities you have to consider as far as what you want to become when you are a business. There are different business structures, different types. There is sole proprietorship, there is want is call a Limited Liability corporation (LLC), limited liability partnership (LLP) or a corporation. All of these will help you define what type of business you are, and your fiscal responsibilities related to your designation.”
Make your business account work for you
Once you have registered your business it is important to determine your business’ spending needs and financial resources.
According to Chase, the Internal Revenue Service (IRS) recommends all incorporated businesses have a business banking account, and there are several benefits to opening one up. For example, separating your personal finances from those of your business allows you to take full advantage of tax deductions, automate your bookkeeping, protect yourself from business debt liability and establish business credit.
“How do you make your [bank] accounts work for you,” asks Winston. “What you want to do is look at the different types of business account because you always want to separate your business accounts from your personal accounts. You want to be able to determine your spending, so you always want to keep them separate. You want to make sure you have an account that will work best for you.”
Fund your business idea
Business credit is one of most common ways for entrepreneurs to fund a new business. It’s also a great way to access the capital that you need to start, run and grow your company.
“You want to make sure you have strong credit this will increase your purchasing power,” says Winston. “This is when you look at how you are going to establish your business credit, your funding and access to capital in order for your business to have a successful future.”
Take inventory of your financial resources
What are your income streams and how much could you invest in your business to create more customers, increase sales and produce opportunities for growth? You should work with your financial, legal and tax advisors to run through best and worst-case scenarios and find out what your options are. Financial resources like cash management solutions can be helpful when setting up your business.
“What you invest in can help create more customers, increase your sales and produce different options for growth,” says Winston. “Make sure you list all your assets, all your savings accounts, your retirement and business accounts and home equity. Once you define all of your assets, now you want to list your liabilities — credit cards, mortgage payments, rent and/or car payments — so you can find out what your actual net worth is by inventorying what you own and how much you owe. You do this by subtracting your liabilities from your assets.”
Create your online presence
If you are doing business digitally or you possess brick and mortar, your clientele needs a way to find out more about your business and what you offer. Creating an online hub for your business is critical to getting your message out there and building a customer base.
“When we talk about online presence, we want to make sure that you have different ways where you can be seen online for your business,” says Winston. “Your online presence can be in the nature of purchasing a domain, making sure you have a plan, designing webpages, and making a website. It’s important to make sure you come up on search engines when people google your business. There are all kinds of things that you can do to have a strong online presence and make sure that you are visible.”
Build your dream team
As your business evolves, you will need to hire people, people you can trust to get the job done and reach the next level. Building your dream team should consists of assembling a group of employees who have strong work ethic and diverse expertise. Finding and hiring individuals who can complement your weaknesses are effective measures towards a path of growing a successful business.
“These are planning steps that one should be thinking about during your planning stages,” says Winston. “I am firm believer that businesses don’t just happen, you have to make sure that everything is planned. As you grow you are going to have to hire the right people, people you can trust, build a strong network, be out in the community, make yourself known, and make sure you take all of things into consideration.”
