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Mon April 18, 2011
Economy Project: Starting A Business
By Sam Baker, KERA Morning Edition Host
Dallas, TX –
Whether it's driven by layoffs or an entrepreneurial spirit, hundreds of thousands of new small businesses open each year. Choosing the right business and lining up the money to operate it are the first steps. But to avoid the usually high failure rate of new small businesses, attorney Paul Stafford says there are three things you should do next. In this KERA Economy segment, Stafford told Sam Baker the first thing is to write a strategic plan.
Paul Stafford: Your strategic plan entails a chronological road map and a, a priority schedule and outlines what needs to be done when, and what your expectations would be at each phase. And they check the plan every six months to a year to make sure that they're on track. So the strategic plan may outline plans for where the business should be in one year, in terms of venue or facilities, revenue, your labor force and your second and third years may have similar metrics and your fourth and fifth year may have similar metrics with additions for expansion or growth, past year five.
Navigate the recession with KERA! Get tips on avoiding foreclosure, access job resources and more at kera.org/economy.
Sam Baker: So this is your outline of tasks and objectives and goals that you want to meet? I guess you could be easily distracted without that.
Stafford: You could find yourself in a very reactionary posture, because if you don't know exactly where you're headed, then that's where you'll end up.
Baker: So number one, you made a strategic plan. Number two...
Stafford: Well number two, I would say you would consult with some professional who's well-versed in business entities - an attorney, but it could also entail an accountant - to decide what type of entity do you want to have.
Baker: You mean like a limited partnership or...
Stafford: Correct. Do you wanna have a sole proprietorship. Do you wanna have a limited partnership. Do you wanna have an LLC. Do you want to be a non-profit? How, how do you want to structure your entity.
Baker: So basically we're talking about who owns it and who's responsible for what.
Stafford: Right. Once you've decided what type of entity you want to have then that might entail, uh, certain names and certain brands and certain intellectual property. And you may decide to go ahead and file that intellectual property and seek those rights at the U.S., uh, patent office. You might also want to register your name with the state, or even here in the county as a DBA something that's a doing business as so that you can protect your brand and your name when you go out and advertise and market yourself, you are, you're properly named and you have the proper legal protection in order to proceed. The third thing that I would recommend getting some good tax advice and making sure that you take care of your financial obligations - not only to your employees and your business partners - but also to various taxing authorities. Both state, local and national. And those, those entities and that advice is critical for any business so that you can maintain your cash flow and your financial plan. So, those are three of the things which I think are critical at the beginning of a business or an entrepreneurial venture. And, obviously, at any phase, there is a need for a mentor and someone that can advise and help to guide an entrepreneur or a - a business owner that's just starting out on some of the things and perhaps pitfalls that they could encounter and help them try to avoid that.
Baker: So, not only don't be afraid to ask for help, you'd really be better off if you have it available to you at all times.
Stafford: I find that many business owners spend a lot of time doing things which are not directly related to their business. Which is one of the major complaints that I, and many others, hear from small business owners. Your key is to try to maintain that focus. Which is, which is really, again, some of the importance of your strategic plan. And some of the advanced planning that you need to do on the front-end of this endeavor.
Paul Stafford is an attorney in private practice and president-elect of the Dallas Bar Association. He spoke with 90.1's Sam Baker.
For more information on starting a business:
Small Business Association
Dallas Regional Chamber
Dallas Black Chamber of Commerce
Greater Dallas Hispanic Chamber of Commerce
Greater Dallas Asian Chamber of Commerce