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35 Tips on Starting and Naming a New Business
John J. O'Callaghan
A Case History
"My
ambition is to open a high-end spa especially for new
and expectant mothers. So far I have only found two other
businesses offering this service. I am not a massage
or
beauty therapist. I have a degree in social work so this
would be a complete career change for me. I have never
owned my own business. What's your advice?" Allysen.
Dear
Allysen,
Here
are 35 tips on starting and naming a new business:
Not
only do these tips apply to what you have in mind,
they
apply to all businesses that are not just internet based.
1.
Think big but start small. You don't want to burn any bridges—
so keep your day job. Work from home. Start part-time.
2.
Use the toe-in-the-water test. Testing is infinitely more
reliable
than gut feelings. You have to prove the concept will work
before
you do start a business. Think about how to test your theory
on
a small scale before you make a major commitment, such as
signing a lease or buying a building.
3.
If you can find at least one potential customer and you
can prove
that the concept works—just once—chances are
it can be made to
work again and again.
4.
Work on a shoestring budget. Don't buy new equipment if
used
will do. Consider bartering whatever you have a surplus
of for what
you need.
5.
Do not start a business without a detailed business plan.
It will
help keep you on track. Besides, when you go to the bank
to
arrange a loan, the bank manager will insist on seeing one.
6.
An accountant will be able to help you with things like
cash-flow
projections, a break-even point and a profit and loss projection.
7.
Banks are invariably cheaper than partners and a lot less
hassle.
Having a partner is a bit like a marriage of convenience
with no love.
Your life will not be your own. Even so, having a business
with a
partner is infinitely better than having no business at
all.
8.
When you have a partner, his or her opinion will also have
to be
considered. Without a partnership agreement with everything
spelled
out, there could be be stalemate in a deadlocked
situation.
9.
The way around it is to be Chairman and have a casting vote.
That's also another good reason to never sell more than
49% of the
shares. You want control.
10.
Is there a market and how big is it? Market research is
essential.
The trick is to cater to an existing need—rather than
trying to create
a new one.
11.
If there is little or no competition—beware! It may
be that there is
no real market. On the other hand, it may also be that you
have
identified an as yet unexploited niche.
12.
Before launching the business, consult with an accountant,
a
lawyer, an insurance broker and a bank manager. The bank's
advice
is free. The initial consultation with professional advisers
is invariably
free. But do ask first!
13.
Generally, the best business to start is the one you know
most
about, but not necessarily! One of my mentors, the
late Earl Nightingale,
businessman, author and public speaker, says you can become
an
expert in practically any new business or industry by reading
books
by experts in that field or industry, for just one hour
a day.
Why
not two hours? Why not three or four? Because, the brain
absorbs
new information better when it comes in small, easily digestible
and
understandable chunks. Spaced repetition learning is a proven
concept.
14.
Even so, there is no substitute for hands-on experience
in the type of
business you are contemplating. Consider going to work for
a competitor.
Maybe part-time? Be willing to do anything at all—just
to see "what's what"
and get paid while learning!
However,
with this big caveat. I suggest you leave before signing
any kind
of nondisclosure of trade secrets or service contract. Otherwise,
chances
are you will be sued—and, more than likely, you will
lose!
15.
Apart from becoming rich as quickly as possible, your objective
ought
to be promote yourself as quickly as a possible from owner/operator
to
owner/manager.
16.
You should never start a business with the intention of
doing all of the
work yourself. To do so would be like buying work with money!
17.
It's just not practical to try to do everything yourself.
You must learn
how to delegate. You need to hire highly motivated "fire-in-the-belly" people
who are even smarter than you are. You train them to your
high standards
and supervise them while they do most of the work!
18.
Choosing the right trading name can be absolutely critical
to your
success. After years of experience in advertising and marketing,
thinking
up trading names, here's what I suggest:
19.
The name should not be a close copy of a competitor's name.
If it is at
all confusing, your potential customers will not be able
to find you and you could be sued for misrepresentation
and what lawyers call "passing off."
20.
The shorter the name the more memorable.
21.
The name should also be easily spelled and clearly pronounceable.
22
.It should advertise what you do. "Your Name Enterprises"
is only
good if you are a household name and your name is synonymous
with
a well known product or service.
23.
It should not infringe on another company's established
trademark.
If it does, you are likely to receive a "cease and desist
immediately"
letter or suffer the consequences. If damages like loss
of profit can be
proven—you will also have to make good that loss.
24.
The name should be distinctive and in keeping with the type
of image you wish to convey. For instance, if you were offering
a
home cleaning service and named it: "APHRODITE Cleaning
Services,"
the name "Aphrodite" would be completely inappropriate.
Whereas;
"Spick and Span Cleaning Services" while not the greatest,
would be
infinitely better.
25.
And, with reference to a listing in the Yellow Pages, "AAA"
or even
"A1" in front of the name might get you to the top of the
list.
26.
You might also want to consider making your town or city
part of the
name.
27.
One good reason for not using your first name as in, "Allysen's
Spa
and Massage Service" is that discriminating customers are
likely to
insist on being treated by Allysen. This might mean you
will be rushed off
your feet while your assistants are standing idly by.
28.
Another good reason is that if and when you come to sell
the business, "Allysen's" might not be able to command as high a price
as a more
corporate sounding and franchisable name
29.
Here's how I dream-up a likely trading name. I brainstorm.
I write
down a list of all the likely names that come into my head—no
matter
how crazy or offbeat they may seem. I want quantity—not
quality at this
stage, and I aim for an unfettered free-flow list of 100
names.
30.
Then I drastically prune the list until I end up with no
more than six or
seven. I try to think of a likely connection in people's
minds. For instance,
I think most people are likely to associate SAMSON with
strength, Midas
with riches and Venus with beauty. Got the idea?
30.
I show my short list to friends or business associates whose
judgment
I trust, and ask for their opinion, and the reason for it.
Then I decide. Got that?
I am the boss. I am responsible.
It's my business. So I decide.
31.
Next I check various directories-online and off, and decide
whether
I need to consult a Trademark Agent about the cost of making
a search.
32.
I also do a Dot Com search to see if my choice is available.
For instance, "Aphrodite.Com" or "AphroditeBeautyProducts.Com"
in preferable to .Net.
If both variations of these names are available, I
register both for around
$5.95 each. If you want to know where to do this, send me
an email to: johnoc29@aol.com
33.
Before spending a cent on advertising, I write a press release
and
send it to all the appropriate media.
34.
Finally, every new entrepreneur has to bear in mind that
most products
and services do not sell themselves. Here's an indication
of the high regard
I attribute to selling.
This
invokes the proven Pareto Principle. Vilfredo Pareto,
(1984-1923) an
Italian economist was the first to notice the so-called
80-20 rule that is now commonly referred to as the Parento
Principle.
"If
20% of the business is in performing the service,
the other 80% is in promoting and selling the service."
35.
Therefore, you had better make it your business to read-up
on how
to advertise and how to sell. Email me and I'll send you
my recommend reading list: johnoc29@aol.com
Allysen,
do the brainstorming exercise to find your perfect name
and start on your independent future.
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