When starting a new business, it’s important to establish good cash management practices. A business doesn’t need to be generating revenue to open a bank account. In fact, it should be one of the first things a business owner does, even before they start selling products or services.
State and federal tax ID numbers (also known as an Employer Identification Number or EIN) are like a personal social security number for your business. They let your small business pay state and federal taxes.
A federal EIN is used by the U.S. Internal Revenue Service to identify a business entity. This 9-digit number is required to pay federal taxes, hire employees, open a bank account, and apply for business licenses and permits.
As a new business owner, you may hear the terms bookkeeping and accounting used interchangeably. While both bookkeepers and accountants work with financial data and help business owners manage their finances, they have complementary but different responsibilities. This blog post will distinguish between the functions of each and their respective roles in a business.
At NaperLaunch and in the NaperLaunch Academy, we promote and teach the Lean Startup Process. As described on our blog, that process was developed by Steve Blank and Eric Ries to help would-be entrepreneurs start new enterprises and bring new products to market. Others, including Frank Robinson, Ash Maurya, and Alex Osterwalder, originated or helped define many of the lean concepts used today.
Early in the startup process, it is important for founders to consider the financial needs of the potential business and complete a break-even analysis. After determining a customer problem that will be solved by a new business enterprise and determining how to create and deliver that solution through a new product or a new service, a founder should make sure delivery of that solution will not only cover operating costs but also deliver a profit. If break-even and a profit cannot be achieved, then the enterprise, product or service should not be pursued.
As we have written in previous posts, a business’ unique value proposition (UVP) should clearly state why customers will want to buy from that business. It must identify the value promise being made for a service or product. That means that a strong UVP is relevant to a target customer group’s specific problem, promises certain benefits of quantifiable value, and states how a service or product is different from other offerings in the marketplace.
Unique Value Proposition, Part 1: 4 Steps to Creating a UVP
So you’ve identified a customer problem and built a product or service to solve it. How can you convince potential customers to buy from you rather than the competition? It’s time to define your unique value proposition (UVP).
A UVP is a single, clear, compelling message that states why you are different and worth a customer’s attention. In other words, it’s a promise of value to be delivered.
You have assessed the feasibility of your business idea and created a plan to get started. What comes next? How do you turn your idea into a legally recognized Illinois business? Here are the four things you should do first.
1. Choose an organization structure for your business.
There are several ways to organize businesses in Illinois, each with its own legal and tax implications. Your form of business determines which income tax return forms you must file.
The most common forms of business are:
Let us say you have had an idea rattling around in your head for a few years about how to improve a basic service or product that you have used in the past. You are pretty sure you have the knowledge and skill to deliver that enhanced service or product. Now you are wondering how to go about commercializing it.
A major part of the mission of NaperLaunch is to foster business success. Our intent is to help business founders find the information they need to be successful in launching and operating a business.
We believe in a process-driven approach to make certain that important steps and issues are at least thought through and considered, if not fully executed. Over the years we have adopted some basic concepts from the best thinkers in the world of entrepreneurship. Those concepts are at the core of the startup process we try to follow.