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Each generation leaves a significant mark on entrepreneurship. Gen Z is currently entering the working world in a time of great uncertainty amid the COVID-19 pandemic. Many Gen Zers are also watching businesses make significant pivots with their business models and may be inspired to make similar moves. Why wait for a dream job when you can start your own dream business?
Starting a business, no matter which industry, means setting the necessary foundation for the company’s success. Some key parts of that foundation include, but aren’t limited to, the following:
- Identify your unique selling proposition
- Choosing a business model
- Drafting a business plan
- Picking a business structure
- Registering for trademarks
- Obtaining necessary business licenses
- Talking with a mentor for support and guidance
Ready to start a small business? Let’s dive into what each of these tasks means for launching a successful startup.
Identify your unique selling proposition
You may think you have an incredible business idea that will be a hit with consumers. However, the competition is fierce. You’ll need to be able to stand out from the pack and find out not only what makes your business special, but what you can do to solve the problems customers are facing.
Resolve these issues by identifying your unique selling proposition, or USP. Essentially, this is your secret sauce. It’s the reason why customers will choose your offerings and services over those of a competitor.
In order to identify your USP, you’ll need to take a look at areas where your business shines. Take a look at your strengths. What are you the best at? These strengths can become part of your selling point. Ask yourself how your startup is able to solve problems and meet needs for customers. Evaluate your current audience. If there’s another target audience you wish to reach, you may consider focusing on a few target customer segments to reach those individuals.
It’s also critical that you also watch for competing companies. What are they doing and, moreover, how can you do it better, faster, or for a lower price?
Choosing a business model
A business model is the method you use to make money with your business. This model is ultimately defined by four factors including pricing, marketing and sales, production and delivery methods, and the customer experience. Having a business model further deepens the way you’re able to differentiate your business from other companies and allows you to better establish customer loyalty early on.
You could run a business on a subscription basis, like Netflix, where customers pay a fee each month for your services. Others may embrace social entrepreneurship, like TOMS Shoes, which gives a pair of shoes to underprivileged children for every pair of shoes sold. The e-commerce business model is hotter than ever during the pandemic, and will continue to thrive long after.
Drafting a business plan
Business plans act as a glimpse into the future of your business. They are often written three to five years out and allow you to define your company’s mission and vision. A business plan is also written to be objective, without bias, and provides the ability for your startup to attract interested investors.
Most traditional business plans cover the following key areas:
- An executive summary of the startup, briefly sharing who you are and what your business does.
- Business description, concept and strategy that allows you to hash out more of what your offerings are and the goals of the business in depth.
- An industry analysis that analyzes the competition.
- The startup’s organization and management, including biographies and backgrounds of each team member.
- Financial projections, including cash flow and projected profits and losses.
- Financing request, or the amount of capital your startup will need to operate that you request from investors.
Picking a business structure
The default entity for an unincorporated business is a sole proprietorship. Some Gen Z business owners choose to be sole proprietors because it’s affordable and gives them the responsibility to be the true boss of their startup. However, it’s also worth exploring incorporating as a different business structure.
When you incorporate a business, you create a corporate business structure, such as a corporation or a limited liability company (LLC), for the startup. An incorporated business receives liability protection. This creates a separation between the business and the owner, ensuring their personal assets are separate from that of the business. In the event of an unforeseen circumstance, like a lawsuit or business debt, this ensures that the personal assets of the entrepreneur are not impacted.
Registering for trademarks
Startups typically have an original name, slogan, logo, design, and/or tagline associated with the company. These are known as trademarks: unique marks that differentiate your business from others out there.
Young entrepreneurs starting their businesses will need to file to register their trademarks at the federal level. This ensures that they have exclusive rights to the mark and no competing business can attempt to use or plagiarize the trademark for their own.
Before you begin to file a trademark application, remember to conduct a name search. A trademark name search allows you to check if there are any pending applications for the same or similar trademarks. If there are, you will know not to file an application to register that mark. You can conduct a search through the USPTO’s trademark electronic search system (TESS) or with the help of a third-party incorporation company that provides these services.
Obtaining business licenses
Depending on the kind of company you’re running, you may need a certain types of business licenses and/or permits. These will vary, due to requirements per industry, county and city, as well as state laws.
The best way to know which licenses and permits are required for your small business is by reaching out to your local Secretary of State. Find out which basic business licenses are necessary for your business to obtain along with any necessary licenses within your industry.
Talking with a mentor
Running a small business takes a lot of energy, effort and enthusiasm. On good days and difficult ones alike, it’s important for Gen Z entrepreneurs to have a mentor they can talk to about their business.
Where can you find a mentor? Check out SCORE of Southeast Michigan for free business mentoring resources. They even have remote mentors available that you can connect with via Zoom. Having a mentor can provide you with the extra support and guidance that you need to get your new business off the ground.