ll archives: How to Start Your Own Business
So, you’re ready to be the Queen Bee. The boss lady. The HBIC. No more boss, no more annual reviews, no more guy in the cube next to you eating tuna sandwiches for lunch. I get it. The truth is, if you told me I’d be an entrepreneur 10 years ago, I would have laughed you out of the room. I was a corporate executive with all the perks — a big office, an assistant, fancy client dinners…These days, I share a desk in an office that has a two-stall bathroom. And I love it.
When I decided to start Ellevest, it wasn’t because I woke up one morning and thought, “Today, I’m going to be an entrepreneur.” It was because I was passionate about a problem that no one else was solving, and I asked myself, “If not me, then who?”
Sure, making the jump from corporate executive to entrepreneur has had its challenges. But my team and I are determined to help close the gender investing gap, and we’re fully engaged in doing it.
Here are a few things I’ve learned along the way that may help you get started:
Don’t quit your day job… yet
Entrepreneurship is hard, and it’s not for everyone. Do your research, and dip your toes in before quitting your job entirely. A simple Google search can tell you what competition you'll be facing for your idea. You can also search patents and trademarks to see if your idea has already been registered. Talk to people you know — and people you don’t know — about your idea and get their feedback.
Consider setting up shop on the side. Pick up a few freelance or consulting gigs with start-ups. Advise a start-up for a while, to get a feel for it. If you’re more of an artisan, start selling your products on Ebay, Etsy or Handmade at Amazon. This will help you see if you really have a money-making idea.
You cannot, cannot, cannot start a business alone. The strength of an entrepreneur's network can really make or break her business. Ask yourself who you know, and who you would like to know. Don’t be shy about calling on your friends, colleagues, and family for any help they can offer — whether it's giving you feedback or connecting you with potential clients or resources.
More formalized networks like Ellevate Network, Women 2.0, and Levo League can help you extend your reach even further. Plus, you’ll start to gather knowledge and inspiration from other people's experiences and pitfalls.
Bulk up your savings
Even if you believe you have a million-dollar idea, it's likely going to take a while before you actually turn it into one. Most experts say you need to give your new business two years to see if it can work. So before you go all in and leave your day job behind, be sure you can support yourself along the way.
Most people know that starting a business is something you need to save for, but it’s also a goal you can invest in.
At Ellevest, we recommend having two years' worth of your current take-home pay saved up, and in our financial plan we default to getting you there over the next five years. If you're starting out by freelancing instead of diving directly into entrepreneurialism, you may be able to get started with less saved. But it's better to save too much rather than risk not having enough to give your business a chance to work.
Write a business plan
Remember the old adage, “If it’s not on paper, it doesn’t exist?” Well, it’s especially true for starting a business. Get your plan on paper…or onto your computer. Even a few pages will help you get organized, focus your ideas, and get you on track. Keeping it brief will make it easy to adjust as things progress and change (and, believe me, things always change).
Some things you may want to include: your mission statement, target audience, revenue streams, marketing and distribution channels, partnerships and, of course, financials.
As you outline everything, it's a good time to recognize that you’ll be responsible for all of it. If you're uncertain about any portion of the work, figure out now how to get around that. For example, if you aren't great with bookkeeping, do you know someone who is? Give her a call. Get advice or consider having someone do it for you — and work hiring employees and freelancers into your plan.
Even as women are starting businesses at a greater rate than men, we still don’t receive anywhere near our fair share of funding.
But things are starting to change: Women are as successful as men, if not more so, when using crowdfunding sites such as Kickstarter and Indiegogo, which can be a good option to help you raise capital (while also testing the market).
You can also check out fundraising and accelerator options that are specifically geared to women-led businesses, such as the crowdfunding site Plum Alley, accelerators Astia and Springboard Enterprises and angel investing groups Broadway Angels, Pipeline Angels, Portfolia and Golden Seeds. There are also hybrid organizations that can bring some combination of network, education and funding like the EY Entrepreneurial Winning Women program and the Tory Burch Foundation.
Organize your paperwork
There is a lot of red tape involved in starting a business. You need to select your form of ownership, register a name, get a tax identification number and whatever permits or licenses you'll need — to name just a few things. Check with the U.S. Small Business Administration for guidance with these important details.
Become a certified woman-owned business
First things first. Once you’re up and running for a few months, give yourself a pat on the back. Have a glass of wine. Next up: register as a woman-owned business. Doing so can help you land big clients, including in local and federal governments, as well as large corporations, that aim to parcel out a certain amount of contracts to woman-owned businesses.
The certification process is a lot of paperwork and can take up to 90 days. You need to provide a ton of documentation for review and prove that your company is at least 51% owned and managed by women. See the National Association of Women Business Owners for more details and other resources on getting certified.
I know this all might sound like a lot of work, and trust me, it is a lot of work. But work is what connects a dream to reality. So, yeah. Go for it — but plan for it first. As with almost any big goal in life, when you’re actively investing toward it, your decision to strike out on your own can be as financially sound as possible.
Sallie Krawcheck is the Co-Founder & CEO of Ellevest. Her life’s mission is to help women to reach their financial and professional goals.
Photography by Kelley Raye