Starting a Business All–in–One For Dummies

Eric Tyson, MBA, has been a personal finance writer, lecturer, and counselor for the past 25+ years. He is the author or coauthor of numerous For Dummies bestsellers on personal finance, investing, and home buying. Bob Nelson, PhD, is considered one of the world's leading experts on employee engagement, recognition, and rewards. He is president of Nelson Motivation, Inc., a management training and consulting company that helps organizations improve their administration practices, programs, and systems.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Where to Go from Here 3

Book 1: Moving from Idea to Reality 5

Chapter 1: Your Business in Context 7

An Overview of Feasibility Analysis 8

Understanding Your Industry 11

Researching an Industry 15

Defining Your Market Niche 21

Zeroing In on a Brand-New Product 24

Chapter 2: Refining and Defining Your Business Idea 27

Recognizing the Power of a Good Idea 28

Brainstorming New Business Ideas 32

Identifying Business Opportunities 36

Putting a Promising Idea to the Test 39

Chapter 3: Creating a Business Model 45

Identifying Who Needs a Business Model 46

Common Aspects of All Business Models 47

Business Models in Their Simplest Form 49

Examples of Business Models 50

Finding Success with a Business Model 52

Chapter 4: Finding Your Target Market 63

Gauging the Target Market 63

Determining Industry Attractiveness 64

Looking for Niche Attractiveness 68

Checking Out Customer Attractiveness 73

Finding Your Place on the Industry Value Chain 75

Chapter 5: Considering a Franchise 79

Understanding What a Franchise is 79

Recognizing the Importance of Brands in Franchising 81

Identifying the Three Types of Franchising 82

Being Aware of the Roles and Goals of Franchisors and Franchisees 85

Reviewing Franchise Relationships 88

Nuances of the Franchisor/Franchisee Relationship 93

Considering the Pros and Cons of Franchising 95

Book 2: Planning for Your Business 101

Chapter 1: Writing a Business Plan 103

Selling Yourself on the Importance of Business Planning 103

The Anatomy of a Business Plan 105

Setting Out Your Planning Objectives 107

Identifying Your Business Plan Audiences and Key Messages 109

Establishing Your Plan’s Time Frame 112

Preparing for the Real World 113

Chapter 2: Finding the Funding 117

Starting with a Plan 118

Tapping Friends and Family 121

Finding an Angel 122

Daring to Use Venture Capital 124

Selling Stock to the Public: An IPO 128

Finding Other Ways to Finance Growth 132

Guarding Your Interests 134

Chapter 3: Setting Your Franchise’s Wheels in Motion 137

Surveying Your Options for Locale 138

Finding Your Franchise’s Habitat 142

Protected Areas, Exclusive Areas, and Encroachment Policies 147

Signing the Lease 149

Meeting Your Franchise’s Requirements 150

Getting the Goods: Merchandise and Supplies 153

Receiving Merchandise 158

Maintaining Inventory 161

Getting Good Training for Yourself and Your Management 164

Chapter 4: Starting a Home-Based Business 169

Looking at the Basics of Home-Based Business 170

Examining the Good News and the Bad 175

Taking the Home-Based Business Quiz 178

Starting Something from Scratch 181

Transitioning into Your Home-Based Business 182

Chapter 5: Creating an Online Presence for Your Business 195

Feng Shui-ing Your Website 196

Creating Content That Attracts Customers 199

Nip and Tuck: Establishing a Visual Identity 208

Inviting Comments from Customers 214

Moving from Website to Web Presence 219

Chapter 6: Starting with the Right Legal Structure 221

Introducing the Legal Business Classifications 222

Going It Alone: The Sole Proprietorship 224

Choosing a Partner: The Partnership 226

Going for the Gold: The Corporation 228

Offering Flexibility: The S Corporation, the LLC, and the Nonprofit Corporation 231

Benchmarking Your Best Choice 234

Book 3: Handling Your Finances 235

Chapter 1: Setting Up the Books 237

Bookkeepers: The Record Keepers of the Business World 238

Wading through Basic Bookkeeping Lingo 239

Pedaling through the Accounting Cycle 241

Tackling the Big Decision: Cash-Basis or Accrual Accounting 243

Seeing Double with Double-Entry Bookkeeping 246

Differentiating Debits and Credits 248

Outlining Your Financial Road Map with a Chart of Accounts 248

Starting with the Balance Sheet Accounts 250

Tracking the Income Statement Accounts 256

Setting Up Your Chart of Accounts 260

Chapter 2: Reporting Profit or Loss in the Income Statement 263

Presenting Typical Income Statements 264

Taking Care of Housekeeping Details 268

Being an Active Reader 271

Deconstructing Profit 273

Pinpointing the Assets and Liabilities Used to Record Reporting Unusual Gains and Losses 282

Watching for Misconceptions and Misleading Reports 284

Chapter 3: Showing Financial Condition in the Balance Sheet 287

Expanding the Accounting Equation 288

Presenting a Proper Balance Sheet 289

Judging Liquidity and Solvency 293

Understanding That Transactions Drive the Balance Sheet 297

Sizing Up Assets and Liabilities 300

Financing a Business: Sources of Cash and Capital 307

Recognizing the Hodgepodge of Values Reported in a Balance Sheet 309

Chapter 4: Reporting Cash Sources and Uses in the Statement of Cash Flows 311

Meeting the Statement of Cash Flows 312

Explaining the Variance between Cash Flow and Net Income 316

Sailing through the Rest of the Statement of Cash Flows 322

Pinning Down “Free Cash Flow” 326

Looking at Limitations of the Statement of Cash Flows 328

Chapter 5: Controlling Costs and Budgeting 331

Getting in the Right Frame of Mind 332

Getting Down to Business 332

Looking into Cost of Goods Sold Expense 346

Focusing on Profit Centers 349

Reducing Your Costs 351

Deciding Where the Budgeting Process Starts 351

Homing In on Budgeting Tools 353

Preparing an Actual Budget or Forecast 357

Understanding Internal versus External Budgets 360

Creating a Living Budget 361

Using the Budget as a Business-Management Tool 364

Using Budgets in Other Ways 365

Chapter 6: Satisfying the Tax Man 367

Tax Reporting for Sole Proprietors 367

Filing Tax Forms for Partnerships 368

Paying Corporate Taxes 369

Taking Care of Sales Taxes Obligations 370

Keeping Up with and Researching Tax Strategies and Rules 371

Paying for Tax Help 375

Book 4: Managing Your Business 385

Chapter 1: Tackling the Hiring Process 387

Starting with a Clear Job Description 387

Defining the Characteristics of Desirable Candidates 388

Finding Good People 390

Becoming a Great Interviewer 394

Evaluating Your Candidates 398

Hiring the Best (and Leaving the Rest) 401

Chapter 2: Setting Goals 405

Knowing Where You’re Going 406

Identifying SMART Goals 408

Setting Goals: Less is More 410

Communicating Your Vision and Goals to Your Team 412

Juggling Priorities: Keeping Your Eye on the Ball 413

Using Your Power for Good: Making Your Goals Reality 415

Chapter 3: Embracing Corporate Social Responsibility 419

Understanding Socially Responsible Practices 420

Developing a CSR Strategy for Implementation 422

Doing the Right Thing: Ethics and You 424

Chapter 4: Managing with Technology 429

Weighing the Benefits and Drawbacks of Technology in the Workplace 430

Using Technology to Your Advantage 433

Getting the Most Out of Company Networks 437

Chapter 5: Delegating to Get Things Done 439

Delegating: The Manager’s Best Tool 440

Debunking Myths about Delegation 441

Taking the Six Steps to Delegate 445

Sorting Out What to Delegate and What to Do Yourself 446

Book 5: Marketing and Promotion 451

Chapter 1: Optimizing Your Marketing Program 453

Know Yourself, Know Your Customer 454

Finding Your Marketing Formula 463

Controlling Your Marketing Program 466

Refining Your Marketing Expectations 467

Revealing More Ways to Maximize Your Marketing Impact 469

Chapter 2: Laying a Foundation for Growth 471

Measuring the Growth Rate of Your Market 472

Responding to a Flat or Shrinking Market 473

Finding Your Best Growth Strategies 475

Growing a Market Segmentation Strategy 481

Developing a Market Share Strategy 483

Designing a Positioning Strategy 485

Growth Hacking to Build Leads and Market Share 487

Selling Innovative Products 489

Chapter 3: Taking Stock of Your Business Image 491

Making First Impressions 492

Auditing the Impressions Your Business Makes 500

Chapter 4: Forging Your Brand 505

Recognizing What Brands are and What They Do 506

Building a Powerful Brand 508

Your Market Position: The Birthplace of Your Brand 510

Conveying Your Position and Brand through Taglines 513

Balancing Personal and Business Brands 514

Maintaining and Protecting Your Brand 516

Chapter 5: Creating Marketing Communications That Work 521

Starting with Good Objectives 522

Developing Effective Marketing Communications 529

Making Media Selections 532

The Making of a Mass Media Schedule 535

Evaluating Your Efforts 538

Chapter 6: Social Marketing: Facebook, Twitter, Instagram, LinkedIn, and Pinterest 541

Using Facebook for Engagement That Builds Sales 543

Building Your Twitter Presence 548

Igniting Your Social Presence on Instagram 549

Expanding Your Network through LinkedIn 550

Promoting Your Brand with Pinterest 552

Book 6: Staying in Business 555

Chapter 1: Developing Employees Through Coaching and Mentoring 557

Understanding Why Employee Development is Important 558

Getting Down to Employee Development 560

Coaching Employees to Career Growth and Success 564

Finding a Mentor, Being a Mentor 570

Chapter 2: Keeping Your Customers Loyal 573

Retaining Your Customer Base 574

Dealing with Dissatisfied Customers 582

Chapter 3: Cultivating a Growing Business 585

Recognizing Growth Stages 586

Resolving Human Resources Issues 589

Addressing Time-Management Issues 591

Choosing Your Management Tools 593

Troubleshooting Your Business Challenges 596

Redefining Your Role in an Evolving Business 599

Index 603