In this step, we will focus on nine areas of logistics:
- Accounting
- Legal Services
- Insurance
- Banking
- Information Technology
- Website Development
- Merchant Banking/e-Commerce
- Travel
- Real Estate
Accounting
Accountants bring structure and order to your business and help you plan for current and future needs. They can help you choose a structure for your business, file the paperwork to do so, and advise you on tax-related issues and account management. Accountants can also help you set up financial timelines with potential revenue and expenses so that you can accurately project your company's cash flow.
Once your business is formed, accountants can assist you with ongoing bookkeeping, payroll and financial analysis and management. In fact, many businesses bring in an outside accountant once a week to assist with payroll and bookkeeping.
Like attorneys, accountants generally charge by the hour or on a project basis, depending on the work. The amount charged can vary by geog raphic location and experience level of the accountant.
Insurance
Health insurance is a particularly hot topic these days, and it probably comes as no surprise to hear that costs are increasing exponentially each year. Health insurance costs are, in fact, one of the number one concerns of most small business owners. An economical source to consider for health insurance is your local chamber of commerce. Oftentimes, chambers group their members’ companies together to obtain deep discounts on health insurance, discounts you might not otherwise have access to on your own.
You can also obtain insurance through an agent. Insurance agents make their money through commissions on the products they sell, so there should not be any upfront cost to you. You should seek out several agents, obtain quotes and go with your gut. Insurance agents can counsel you as to what kinds of insurance you will need and the type of coverage available to you, such as health insurance, property insurance, general liability insurance, workers compensation and malpractice insurance.
Questions to ask a prospective insurance agent:
- Are you a licensed agent?
- How many companies do you currently represent?
- Are you independent or do you work for an insurance brokerage/agency?
- How long has your agency been in business and how long have you been with the agency?
- If you are independent, how many insurance carriers do you work with?
- What kind of insurance do you sell?
- Have you worked with businesses like mine before?
- What types of value-added services do you provide - employee benefits, retirement planning, wealth management, human resources outsourcing?
- Do you offer 24/7 service?
- How do you perceive your role in handling claims?
- How often will you review my policies to see if better prices or coverage are available?
Banking
Even if you don’t need or qualify for a loan yet, banks do provide a suite of other products fundamental to your business that are mostly (but not completely) financial in nature. These can include business checking accounts, business credit cards and perhaps even a credit reference from your banker. Banks also have great contacts in the community and can be an excellent source of business referrals.
It's vital for you to separate your business and personal finances early on, to simplify bookkeeping and tax returns. Open a business checking account at your local bank to start things off on the right foot.
You should also establish a relationship with your banker early on, so you can learn from him how best to position yourself for a loan down the road (if you will need one). Your banker can also keep you apprised of what other financial products might be appropriate for your particular business such as merchant banking services, payroll services, treasury management services and much more
Information Technology
Information technology (IT) encompasses a lot of things, including purchasing computers, setting up computer networks, security measures, email systems, software, backing up business data, high-speed internet access, and phone systems.
and phone systems.
The extent of the IT services you'll need depends on your business model, and you may or may not need or want to hire an IT professional to assist you. If you plan to go it alone, tap into resources like the Small Business Technology Institute or the Microsoft Small Business Center for articles and online training on a variety of IT topics.
If you decide to hire an IT consultant to help set up and support your computer system on a one-time or ongoing basis, you should ask for referrals from business associates, your trade association or the retailer from which you purchase your computer equipment
ons to ask a prospective IT consultant:
- Do you specialize in my industry and in assisting small businesses?
- What will your availability be if I have an urgent problem?
- Do you charge a retainer or by the hour, and do you charge for any other expenses?
- What services do you offer - website hosting, ongoing consulting and troubleshooting?
Website Development
Your website may be the backbone of your entire company, especially if you are an online retailer. And there are a wide variety of options for developing your website, so choose carefully. For example, there are online services, like Microsoft Office Live (a StartupNation sponsor) and TemplateMonster, that will provide you with the tools to create your own site using templates, and they'll even set up your web hosting for you.
If you need a customized and complex site, you may decide to hire a website designer and programmer. Designers create the look and feel of the site, and design any artwork, while programmers are the ones who build the “back-end” of your site and make it actually function. It’s also possible to find a professional who is both a designer and a programmer, if you prefer to go that route.
Regardless of which path you take, you must first decide what you want in a website.
Here are a few things to consider:
- What is the primary purpose of the site? Do you want to sell products (e-commerce)? Do you need to provide information? Will your site contain multimedia elements like music and video? All of the above?
- Will you host the site, or do you need someone to host it?
- How often will the site need to updated?
- Do you want to be able to update the site yourself or pay someone else to update it?
There are content management systems available that let non-technical staff update images, text, and pages on a website.
- Who will develop the content for the site?
And finally, if you're operating on a tight budget that really doesn't allow for hiring a website development firm, you can ask if an individual developer is willing to do the work on a freelance basis.
Questions to ask a prospective website developer:
- Do you have experience in designing and programming a site similar to mine?
- Do you design and program yourself, or do you outsource some of the work?
- What is the timeline for designing and programming my site?
- How many designs will you "mock-up" for me to review?
- Do you charge by the hour or by the project?
- How many corrections am I allowed to make before you charge me for additional work?
- Will you also host the site and secure a domain name?
- Do you have experience building search-engine friendly websites, and can you provide examples of sites you've designed that rank well in natural search engine results?
- Can you point me toward a sample portfolio of websites you have designed?
- Can you provide me with your website address so that I can take a look? (You can tell a lot by looking at a web design company's site. Would you hire a plumber whose own kitchen sinks is leaking? The same holds true for website developers)
Merchant Banking
If you are planning to accept credit cards as a form of payment, you must have a merchant banking account. Merchant banking accounts can be tough to come by for startup businesses.
Factors that merchant banks take into consideration:
- Whether you already have an established business
- The type of product(s) you are offering and the amount of sales volume you expect
- Your credit risk, including personal credit history
- Whether you have ever applied for bankruptcy
- Whether you appear on the Terminated Merchant File List or MATCH file
- Whether you have a website and clearly state your return policy
- Whether you have ever been convicted of credit card fraud or a related felony
To find a merchant banking service, the best place to start is your current bank. If you qualify for a merchant banking account, you will need to invest in some hardware and software to process transactions. There will also be fees associated with your application, each transaction, each statement and customer support.
Travel
If you’re starting a business that will have you or your staff traveling frequently to trade shows and client meetings, it’s a good idea to leverage the Internet for discounted travel options. Additionally, setting up frequent traveler reward accounts with your preferred airline, hotel and car rental company will help you accrue points towards free tickets, hotel stays, and maybe even upgrades and amenities.
Going the traditional route of using a travel agent is certainly still an option, and could be the right one if you frequently have complex itineraries and no time to shop for good prices yourself. Searching websites that aggregate discounted prices from a variety of airlines, hotels and car rental companies is also a simple way to get a broad sampling of your options. But some airlines and hotels offer better deals directly at their own websites, and may not even participate in the aggregated travel sites, so be sure to shop around.
Real Estate
If you are opening a brick-and-mortar store or an office, you will, of course, need some real estate. You can choose to lease a property or buy one, but in either case, it’s best to begin with the Downtown Development Authority or the City’s Planning Commission in the community in which you want to locate. These entities may be able to help you identify the perfect location for your business, perhaps even one that carries some attractive tax incentives. Otherwise, you may try working with a commercial real estate agent or developer to identify the right location. A real estate agent or broker will take a commission on the sale price or lease, just as they do in personal real estate transactions.
To find a commercial real estate agent near you, ask for references from other small business owners in your community, or peruse the yellow pages.
Questions to ask a prospective realtor:
- Do you have many properties listed in my desired region?
- How often will you contact me about available listings?
- Do you have a website where I can view properties online?
- Do you represent both the buyer and the seller?
- What commission level do you charge?
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