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Nearly 50% of all American veterans decided to ditch the corporate career route after World War II and forge their own entrepreneurial paths. With their training, discipline, and willingness to sacrifice, these military members made fantastic small business owners. But since the Korean War, the percentage of military veterans starting businesses has dwindled.

Why? Because starting a business wasn't easy, and the US economy made it nearly impossible for veterans to get access to the financing and resources they needed. That's far from the case today.

The government noticed the issue and did something about it (if only they'd do the same thing about the DMV). By introducing veteran-specific educational programs, financing opportunities, and set-aside contracts, the US government has finally given military members an even playing field.

One business-changing advantage the government has given veterans is the Vets First Verification Program. Qualifying for this program could change the way you do business forever. If you're a veteran small business owner, don't do business another day without learning the ins and outs of this program—it's a game-changer for anyone who is targeting government contracts.

What is the Vets First Verification Program?

The Vets First Verification Program is a government program that allows your business to bid on federal set-aside contracts and get exclusive access to resources and support. To do any business with the US Department of Veteran Affairs (VA), you'll need to register your business with the Office of Small & Disadvantaged Business Utilization (OSDBU), which isn't as easy as it should be. More on that later.

Government contracting can open up millions of dollars of new opportunities for your business—that's why securing a contract is so tricky. Fortunately for you, The Veterans Entrepreneurship and Small Business Development Act of 1999 guarantees up to 3% of quality federal government contracts and subcontracts will be set aside for veteran-owned small businesses (VOSB) and service-disability veteran-owned small businesses (SDVOSB). That 3% might not seem like a lot, but since the government spent $550 billion on contracts in 2018, rest assured—there's a whole lot of business to be had.

Advantages of being a veteran-owned small business.

While qualifying and registering your VOSB can be a pain in the you-know-what, it's definitely worth it. Here is a taste of the benefits and advantages you can expect:

• Ability to work with the VA: The VA only works with VOSBs and SDVOSBs, so you'll be part of a smaller pool for any work they have to offer.
• Set-aside government contracts: Be first in line to win federal contracts reserved just for military veterans. These contracts could make up the entirety of your entire business.
• Educational resources: The VA offers training on everything from building a successful business plan to strategies to win government work.
• Mentorship and networking: You'll be connected to individuals who have the know-how to guide you in the right direction. The VA will also help you build relationships and connections with large private-sector firms and those in charge of government procurement.
• Special financing terms: The SBA offers small business loans to the general population, but they provide lower rates, better terms, and financial support to VOSBs.

How to register your business as a VOSB.

Before you try and register your business as a VOSB, make sure you meet all the VA's qualifications:

• Be considered a veteran, meaning (a) you've served on active duty in the military and have not been dishonorably discharged or (b) served as a Reservist and were called to federal active duty or were injured in the line of duty.
• Own at least 51% of the company you register and be in charge of the day-to-day operations and management.
• Have the necessary experience to make business decisions.
• Must be the highest-paid person at the company.
• Work full-time for the business you're registering.
• Hold the highest position at the business.

If all of these conditions are true, then you qualify to register your business as a VOSB.

Next, you'll need to apply online through the Vets First Verification Program. The application will walk you through all of the necessary steps.

If you have questions about your eligibility or how you can ensure your application will be accepted, the Center for Verification and Evaluation (CVE) hosts free webinars to answer all of your questions. You can also find a local Verification Assistance Counselor to give you one-on-one support by using the VA's state-organized list.

Get registered—it's worth the hassle.

Even if you don't want access to set-aside government contracts or educational resources, it's still a good idea to register your business as veteran-owned. Studies show that 70% of Americans prefer to do business with a VOSB than a non-veteran-owned one. This is a free, fantastic opportunity you can't pass up!

The process can be a hassle, but it's worth it in the end. Don't wait to get the help you need—these exclusive resources are invaluable, especially for new business owners. Thank you for your service—we wish you the best of luck in this next important stage of your career. 

You know you want to start a business, but you have no idea how to get started.

Going from initial idea to full-fledged business is a lengthy process. At first, you want to do enough brainstorming and research to make sure you've landed on the right business idea. After you've locked in the idea, you need to start developing a plan for everything from your financials to your marketing and sales to your management and operations. You'll also have some legal hoops to jump through, including registering your business and securing licenses and permits.

That's the easy part! Once you're ready to go, you'll need to secure funding to cover your startup costs and build up the capital and inventory you need to open the doors and, eventually, start turning a profit.

The startling truth is that about 50% of all new businesses fail. The reasons for their failure vary, whether it’s offering a product with no market need, lacking capital, not having the right team, or not being able to compete. All of these reasons come down to one thing, though— a failure to adequately prepare before jumping in headfirst.

All of this isn't to scare you away but rather to emphasize that getting answers to your questions now will help you keep things running smoothly in the long-run. With proper planning, new business owners can make sure that there's a need for their idea, the funding to get it off the ground, the right talent to propel it forward, and the resources to compete with other companies.

Whether you already have a business plan or don't even know what kind of business you want to start, here are answers to the most commonly asked questions about starting a business.

The idea

1. What kind of business should I start?

Before asking yourself what kind of business to start, you should ask yourself what you're passionate about. As a business owner, you're going to have to dedicate an immense amount of energy and time to get your business off the ground, so it should be something you care about. 

After that, identify which of your interests can be transformed into a product or service that's needed. You want to operate at the intersection of passion and demand. To get your gears turning, here are some common industries for small business:

• Food and beverage
• Accommodation
• Health care and fitness
• Arts, entertainment, and recreation
• Web design and marketing
• Auto repair
• Pet care
• Business consulting
• Personal care
• Cleaning and repair services
• Real estate

2. Should I start my own business or buy a franchise?

According to Entrepreneur, franchises have a higher rate of success thanks to brand recognition and proven demand. If you want a higher degree of security, buying a franchise might be right for you. 

However, with a franchise, you have to pay the owner fees and royalties that eat into your profits, and you don't get much freedom or flexibility when it comes to the direction and growth of your business. If you value flexibility and innovation, you might prefer to start your own business.

3. Will people buy what I'm selling?

The most important step to take before going all-in on your new business idea is to make sure there's a market for the product or service you want to offer. You can do market research on your own, but it's a good idea to at least meet with a consultant. Research your industry, your target market, your competition, and your geographic area if your business is tied to a physical location. Use this information to develop an informed idea regarding the viability of your business idea.

4. Why do so many businesses fail?

Another method for gauging the viability of your business idea is to look at why other businesses fail. Machine intelligence platform CB Insights analyzed startup data to come up with the top reasons new businesses fail, and the conclusion was clear—almost half of startups failed because there was no market need for their product or service.

The other 2 biggest reasons for startup failure included running out of cash and not assembling the right team, followed by less common reasons like being outcompeted, pricing and cost issues, having a user un-friendly product, or lacking a business model.

5. Can I run my business from home?

Many people nowadays start their businesses with the goal of being able to work from home. While the internet makes this scenario a lot easier to achieve, lacking a physical presence can make it challenging to grow your business and get the word out there. 

If you want to run your business from home, you must be comfortable using technology and working from behind a computer. You should also learn the basics of skills like digital marketing and web design. Unless you're an expert, you'll want to outsource those tasks, as they'll be critical to your business's success.

The setup

6. Who can I talk to about starting a business?

Once you've got an idea or two that you think will make for a good business, it's wise to seek counsel regarding issues like profitability, setup, and funding. Consider speaking with a business consultant or business coach as well as small business owners in your community.

The US Small Business Administration works with local partners to provide you with mentorship as you start and grow your business, so use them to search for local assistance in your area. There is also a plethora of resources for female business owners and programs for boosting minority business owners.

7. Do I need a business plan?

While you should get clear on your business idea before taking the time to create a business plan, you will need one eventually. Business plans help you develop your business idea further, as well as identify any potential issues and tweak your plan before putting it into motion. They're also a necessary tool for communicating with other people, such as investors, lenders, partners, or employees, why they should jump on board.

8. How do I create a business plan?

Find a detailed guide to creating a business plan that you can follow. Most business plans include the following 7 parts.

1. Executive Summary
2. Business Overview
3. Market Analysis
4. Competitor Analysis
5. Sales and Marketing Plan
6. Operations and Management Plan
7. Financial Plan

Essentially, you will need to define your business and its goals, do a market analysis, investigate your competitors, detail your business financials and come up with financial projections, and explain exactly how you plan to achieve your business goals.

9. How do I pick a good name for my business?

The key to choosing an effective business name is to pick a name that's both simple and unique. Names that are long and complicated can be easily forgotten and difficult to spell, making it hard for your business to gain traction by word-of-mouth and via the internet. 

On the other hand, you want a name that's memorable, catchy, and conveys your business's unique brand identity. Above all, you want to avoid using a name that's already taken. Search the internet for your business name, do a trademark search at USPTO.gov, and look up the .com domain name, as you'll want to buy that. You'll also want to register your business name once you've selected one.

10.  How do I choose a business structure?

You'll need to decide how to structure your business, and the most common options are sole proprietorship, partnership, LLC, C corporation, and S corporation. The structure that's right for you will depend on your business's size and ownership, and the structure you choose will determine how you're taxed. Read up on the different business structures and decide which one is the best fit.

11. How do I register my small business?

Unless you're operating as a sole proprietor and your business name is the same as your legal name, you'll likely want to register your small business. 

The process for registering your business will depend on the business structure you chose, but generally speaking, you'll need to register with state agencies. Most states require you to update your registration every so often. You may also want to apply for licenses and permits depending on your business type and location.

12. Do I need a business bank account?

You should open a business bank account as early as possible if you're starting a business. For both legal reasons and accounting purposes, you'll want to keep your business finances separate from your personal finances. This separation protects your personal finances from your business's liability, and it also makes doing your taxes and analyzing your business revenue easier.

The best way to keep your business finances separate is to open a business bank account and use it for all of your business transactions. This approach also makes you look more professional and helps you build a business banking relationship.

13. Do I need a business credit card?

You don't need a business credit card, but they can be useful. Not only does a business credit card help you build business credit, but the best business credit cards offer lucrative rewards for all the money you're spending on your business.

Business credit cards can also be useful for covering short-term cash shortages. If you need a little extra cash to make an important purchase, your business credit card is faster than a loan. It's also likely more expensive, though, as credit card interest rates are high. For this reason, it's important to pay off your balance in full each billing cycle if you can.

14. How do I keep track of my business finances?

Apart from keeping your business finances separate, you'll also want a good accounting app that can help you track and organize your business finances, send out invoices, and help you do your taxes. Look for an app that allows you to connect your business bank account, offers customized invoices, and provides a tax estimator. Most accounting apps come with a free or low-cost basic plan and allow you to upgrade to more robust plans as needed.

15. How do I set business goals?

The key to setting business goals is knowing which metrics to value and pay attention to. You'll want to create a list of KPIs, or key performance indicators, and set goals in relation to those. These metrics should be crucial to your business's success and easy to measure and quantify. 

Common KPIs include profit margins, revenue growth, revenue concentration, and working capital. These can also be more specific to your business, such as the number of new contracts per quarter or average event attendance numbers. Make sure to set deadlines for your KPIs, which can include monthly, quarterly, and annual goals.

By choosing a few KPIs, you'll be able to set business goals that are relevant, specific, and easy to measure. You'll also be able to share these goals with your team and have them track their individual progress accordingly.

The Funding

16. How much money do I need to start a business?

The Small Business Administration offers a tool to help you calculate your startup costs, which will include everything from rent, inventory, and equipment to permits, employee salaries, advertising, and website costs.

Your exact startup cost will depend on the size and type of business you want to start. For example, the typical cost of starting up a microbusiness is $3,000, and most people who start home-based businesses need around $2,000 to $5,000. However, if you want to open a restaurant, retail store, or something similar, you'll likely need significantly more money to get started.

17. How can I get funding for my business?

While some entrepreneurs prefer to self-fund, you don't always have to have the cash in hand to start your business. There are plenty of ways to secure funding that will cover your startup costs or the ongoing costs of running your business until it's profitable. Common methods for funding small businesses include the following.

• SBA loan
• Startup loan
• Business line of credit
• Business credit card
• Business grants
• Bootstrapping
• Friends and family
• Crowdfunding
• Angel investors
• Venture capital

Each funding method has its own pros and cons. For example, bootstrapping can leave you with less capital but more freedom, whereas bringing in investors provides access to a big capital boost but means losing some equity.

18. How can I get a small business loan?

Small business loans can be a good funding option for business owners who don't want to give up control of their business but want immediate access to more capital. You'll want to figure out which small business loans you qualify for and what the application requirements are for each one. 

You'll need good credit, and some lenders will check both your personal credit and your business credit score. Many lenders will also want to see that you've already been in business for at least a year and are generating at least $50,000 or $100,000 in revenue, although there are exceptions. You'll need to provide business and personal tax returns, bank statements, and other legal documents to apply. Most importantly, you need to make sure you can repay your loan on time before borrowing any money.

19. How can I get investors to invest in my business?

If you've decided you want to raise money for your business, the first step is finding investors. There are online fundraising platforms, like AngelList and StartEngine, that make it easy for business owners to connect with potential investors. You'll also want to get out in the real world to get noticed. Startup events and conferences are great places to do this, as are startup accelerators.

Finally, don't underestimate the power of your community. Ask around, and maybe someone will be interested in investing in a local business. You can also start a crowdfunding campaign on websites like Kickstarter, Indiegogo, and Patreon.

20. How long until my business is profitable?

It can take anywhere from 6 months to 2 or 3 years for your business to start regularly turning a profit. Most business owners should plan for at least 1 year without a profit, although franchise owners will likely generate profit more quickly.

It’s important to consider this starting stage when creating your business plan and deciding how much money you need to start your business and whether you want to resort to funding options such as loans and investors.

So, you’ve decided to truck it out by yourself and start your very own trucking company? Well, congratulations! The trucking industry is ripe with growth and opportunity, and it’s just waiting for ambitious entrepreneurs like you to seize the occasion.

See, America needs trucks. We desperately need trucks. The shortage of truck drivers is getting worse every year, and that deficit is expected to widen by more than 100% over the next decade. Aging drivers are retiring, women are struggling to join the industry, and the labor market is growing tighter and tighter—so more knowledgeable trucking business owners is exactly what our country needs.

The trucking industry is—and will remain for the foreseeable future—the lifeblood of the US economy, moving nearly 71% of all freight tonnage in the country. Annual truck tonnage has seen growth over the last 10 consecutive years, and although 2019 wasn’t as magical as 2018 for the industry, now’s as good a time as ever to jump into the competition.

But starting your own trucking company isn’t all wide-open roads and beautiful sunsets—it’s a lot of hard work, patience, and savvy decision-making. Oh, and money. Yes, money. One of the biggest barriers to entry in this industry is capital. Fortunately for you, there are plenty of fantastic financing options that can help you get your business off the ground. But how much cash are you going to need, exactly? Good question.

This guide is chock-full of all the costs you can expect to pay when starting your trucking company. It includes the obvious investments (like your truck and its many big ol’ expensive tires), and it also contains the not-so-obvious expenses (like toll fees and CDL endorsements). It’s all here to give you a good idea of what it’ll cost to make your trucking dream a reality. But before we dive into the nuts and bolts of your expected costs, we need to take a step back and look at the big picture—your business plan.

Begin with your business plan.

Before you start planning how many trucks you’re going to buy and how much it’ll cost you, you need to take a holistic approach. By creating a business plan, you’ll be able to see the path from start to success in its entirety, and you’ll see all the essential milestones along the way.

There’s no one-size-fits-all business plan in the trucking industry. You may decide to hire a bunch of owner-operators with their own trucks, or you could choose to build a fleet of big rigs and find talented truckers to drive them. And your aspirations now could change over the next 2–3 years, and that’s okay. Your business plan isn’t a binding document to keep you headed in one direction—it’s a GPS to get you from where you are now to where you want to go.

So step 1: get out your business plan. If you don’t have one yet, that’s A-OK—check out our step-by-step guide to creating your plan. Once that’s done, you’re ready to start making some real estimates. As we look through all the expected costs of starting a trucking business, you’ll likely discover new opportunities and barriers that’ll change your business plan. That’s great! Keep it close by so you make sure it’s always up-to-date.

Now, on to the costs you can anticipate.

Expect these costs for starting a trucking business.

Starting a trucking business isn’t cheap. You’re going to need trucks, truckers, parking, equipment, office space, licenses, permits, gas, marketing material, and much more—it’s not as simple as buying a truck and hitting the highway.

In fact, depending on what kind of business you want to build, you might not actually drive the truck at all. Perhaps you’ll hire full-time truckers. Maybe you’ll hire subcontractors. Or you may just run a one-person show where you do it all—there’s no right answer, but you’ll need to factor in the associated costs of each decision you make.

It can all be a little overwhelming, and that’s why we’re going to help you take it step-by-step, item-by-item. Let’s start with some of your most expensive assets first: real estate and trucks.

1. Real estate

As you scale, your real estate demands will grow, but on day one, you’re going to need some basics. You’re going to need docking and parking for your fleet, and you’ll likely want office space for administrative tasks—nothing fancy, but you’ll need something. Preferably, you’ll want to find locations that are easy-access for massive trucks and are close to major highways and interstates. This location will help eliminate unnecessary transportation waste and save valuable time.

2. Trucks

Next, you’re going to need trucks. Start small and scale as you grow. You may just want to start with 1 or 2 trucks, at first, and buy more as need demands.

A new truck and trailer could cost you well over $150,000, so you’ll have to decide whether you want to buy new, buy used, or even rent or lease. Purchasing a brand new truck will guarantee it’s in tip-top shape, meaning you’ll have fewer maintenance and repair bills over the next few years. But you pay a hefty premium for that peace of mind.

Buying a used semi-truck is much like buying a used car—just on a much larger scale. You’ll save thousands of dollars up front, but you should anticipate more maintenance costs and fewer years left of operation. Depending on the age and mileage, you could pay anywhere between $30,000 and $80,000 for a reliable big rig.

Another option is to rent or lease a truck, but this can get expensive very quickly. Used trucks may lease for around $800 a month while new rigs may lease for up to $2,500 a month. Oh, and don’t forget about the insurance costs, too, which can run as high as $1,000 a month.

When financing or leasing a truck, expect these costs to make up around 16% of your total truck operating costs. 

3. Crew

If you’re going solo, you only need to pay yourself, but if you’re looking to scale, here’s what you can expect. A trucking business crew has truckers, maintenance workers, logistics coordinators, dispatchers, accountants, attorneys, administrative staff, recruiters, trainers, and more. As a small business owner, you may wear multiple of these hats from time to time. However, as you scale, you may hire full-time employees, freelancers, or subcontractors for any one of these positions—it all depends on your business plan and strategy.

If you build a large fleet of trucks, you may hire in-house maintenance workers. Or you may choose to outsource all your maintenance and repair work—it’s entirely up to you and your unique situation. The same is true for your truck drivers. On average, drivers’ salaries make up over 43% of the costs of operating a trucking business.

4. Equipment

Depending on your trucks and the industries you serve, you may need to buy and maintain a variety of additional equipment. For example, if you’re transporting frozen goods, you’ll need to purchase temperature-controlled storage containers. If you transport logs, you’ll need a specific bed and ties. Or if you carry hazardous cargo, you’ll need specialized equipment.

This specialized equipment usually has higher costs, and it’ll also require unique cleaning and maintenance. Keep these additional costs in mind if you choose to work with less-competitive niche markets.

5. Fuel

If you thought the gas price for your private vehicle was bad, then you’re in for a big surprise. On average, a commercial truck will burn through at least $70,000 worth of diesel fuel per year. That’s a lot of fuel (and a lot of money)! On average, fuel will account for around 22% of your total truck operating costs.

There are plenty of tips and tricks to cut fuel costs, but it’s still going to be a massive expense for every one of your vehicles. You have to spend money to make money, right? 

6. Tolls

This expense might seem insignificant in the grand scheme of things, but toll fees can add up. Toll charges have skyrocketed over the last decade, increasing by close to 75%. Depending on which study you look at, toll prices could be your 2nd or 3rd biggest operating cost (alternating with fuel). It all depends on where you operate and which routes your drivers frequent.

A tool like Tollsmart can help you plan your routes and predict your expenses—this practice will help you accurately invoice your clients so you get the most bang for your buck. Other tools, like Bestpass, will help simplify your toll management expenses and help you find excellent discounts.

7. Repairs and maintenance

Alternators will break, tires will puncture, wiring will need to be fixed, breaks maintained—there’s a lot that goes into sustaining efficient trucks. Repairs and maintenance costs average around 10% of your total truck operating costs ($15,000 annually). Tire repairs and maintenance cost around $4,000 annually per truck on average, and that doesn’t take into account when you’ll need to replace some tires completely.

Increasing labor rates, parts costs, and replacement tire prices caused maintenance expenses to increase by up to 5% in 2018, and that number will likely keep steadily rising. Keep that in mind as you create your financial forecasts for your operating expenses.

8. Licenses and permits

As you can expect, you’ll need several licenses and permits to transport massive trucks full of cargo across the US. This post contains an excellent checklist, although you may need additional licenses depending on your home state and if you’re transporting unique goods. Here’s a quick list for reference:

1. Business Registration
2. Commercial Driver’s License
3. Federal DOT and Motor Carrier Authority Numbers
4. Unified Carrier Registration (UCR)
5. International Registration Plan (IRP) Tag
6. International Fuel Tax Agreement (IFTA) Decal
7. BOC-3 Form
8. Standard Carrier Alpha Code (SCAC)

Depending on the kind of cargo you’ll be hauling, you may need additional license endorsements. For example, if you’re transporting “hazardous” material (meaning explosives, combustibles, flammables, gases, and other potentially dangerous goods), you’ll need a HAZMAT endorsement.

Total, you’re looking at a few thousand in annual expenses for licenses and permits.

9. Insurance and taxes

Like with most insurance plans, you’ll pay a different amount for varying degrees of coverage. Your basic coverage will be cheaper, and your more comprehensive coverage will be more expensive. Obviously, you’ll also pay more if you’re insuring newer vehicles. It’s better to be safe than sorry, but you’ll need to decide which coverage packages will most benefit your business.

The government puts some heavy taxes on the trucking industry. The Heavy Vehicle Use tax and permit, as well as state-specific taxes, could cost you an average of $500 per truck annually. 

10. Marketing

You could argue that trucks market themselves, and we wouldn’t entirely disagree, but you’re going to need some additional budget to market your business. First, let’s start with branding.

At a bare minimum, you’ll need a name, logo, color scheme, social media profiles, and a website. Of course, you can always go deeper and wider to create an impressionable brand, but you’ll need these basics. Unless you’re decently design-savvy, you’ll likely need to hire a freelancer to lend you a hand.

Next, decide which clients you want to work with. Do you want to work with construction companies, large corporations, small businesses, the timber industry, oil and gas companies, or manufacturers? Once you know who you’re targeting, then you can decide how best to reach them. That strategy might include social media ads, Google display ads, brochures, email marketing, cold calls, etc. If you lack marketing experience, you might want to get some advice and help from an agency.

Start preparing a cash cushion early on.

You'll want to start preparing a cash cushion to deal with any unexpected disaster on day one. The trucking industry is a fun one—every day is different, and you'll deal with a variety of challenges week in and week out/ But it's also rife with risk. Truckers will suddenly quit, tires will blow, trucks will crash, clients will delay payments—there's a host of things that can and will go wrong.

By building a rainy day fund, you'll have the capital you need to deal with any challenge. When you're just starting and cash is low, consider getting a business line of credit. A business line of credit is a financial safety net that's there when you need it, but you're under no obligation to use it. So if you need to fix a truck's engine immediately or hire an additional trucker, you'll always have the cash you need on hand.

Find the right financing solution.

With all this talk of money, money, money, you’re probably starting to worry about how you can afford everything. Don’t panic! Getting a trucking business off the ground takes a lot of cash, but lenders understand the investment and know it’ll pay off in the end. That’s why they offer some fantastic financing options for transportation businesses. Let’s look at a few options.

• Equipment financing: With trucks costing upward of $150,000, you’ll likely need some financial help to get your feet off the ground. Truck cabs, beds, your coffee maker, and even the software on your computer—equipment financing can help you afford it all. With loan amounts up to $5 million and terms as long as 5 years, there’s no better way to finance your big rig fleet.
• Term loan: You can use a term loan to finance just about any part of your business. You’ll get a lump sum of cash with transparent rates and terms, so you know exactly how much you’re paying every month.
• Short term loan: If you need money, and you need it fast, a short term loan could be your best option. You’ll pay a higher interest fee, but you’ll get the money you need in as little as 24 hours.
• SBA loan: The US needs the trucking industry, and that’s why the government offers a suite of loans with top-notch rates. Qualifying is difficult, and the process is long and tedious, but if you qualify, an SBA loan is a stellar financing choice. 

Here’s a little experiment to try the next time you’re in a group setting. It won’t matter if it’s a family gathering or a bowling night with friends, the results will likely be similar. Simply ask each person if they have a business idea. Without fail, the majority will reveal they indeed have an idea they think would be a hit. Perhaps it’s a restaurant, retail shop, or a technological solution. Whatever the industry, the fact is that most people have business ideas they dream about launching someday. And most of those people will never take action.

“The biggest struggle for most would-be entrepreneurs is taking that first leap,” explains entrepreneurial expert Alejandro Cremades. “It may be quitting a job, putting up a website, entering a startup accelerator program, approaching someone with your first pitch, or just announcing your venture to the world and family and committing the dollars and credit you have. This normally comes after a fair amount of brainstorming and planning. That can be a time when your mind frequently plays tricks on you. Fear and doubt creep. You can make plenty of excuses.”

This guide is intended for the courageous souls who have decided to take the risks necessary to build a business—those who want nothing more than to take their ideas from the drawing board to the board room. If you fall into this camp, your bravery is commendable. You have a challenging and thrilling journey ahead.

For the sake of clarity, the various tasks and strategies described in this guide have been outlined chronologically. This is not to say that every business will follow the same pattern. Rather, view this timeline as general recommendations that can be adapted to your unique situation.

Months 1-3

This stretch will be the most crucial period during your first year. These first few months are what separate the real entrepreneurs from the "I have a great business idea" people.

Craft a business plan.

Without a plan, your business idea can never be put into action. So think of your plan as the blueprint for everything that will follow. The Small Business Administration (SBA) recommends that you start your business plan with an executive summary. This section is where you’ll describe what your business does and how it is unique. In many ways, it’s like your elevator pitch.

Next, you’ll flesh out that executive summary with the following sections:

• Service or product
• Financial projections
• Market analysis
• Organization and management
• Marketing and sales
• Funding request
• Appendix

Every goal included in your business plan should be trackable. Describe how you’ll get there, when it will happen, and how you’ll know the effectiveness. These details elevate your plan and make it actionable.

While your business plan will serve as blueprints for your internal team, it will also be shared with an external audience. For example, many lenders will request your business plan if you’re seeking financing. Take the time to polish it and make sure your plan is as impressive on paper as it was in your head.

Get an EIN and open a bank account.

You’ll need an Employee Identification Number (EIN)  to do business in the United States. Visit the application page provided by the IRS, and you can complete the application process without too much difficulty.

Armed with your EIN, you can open a bank account for your business. There are plenty of excellent banking options out there, but many entrepreneurs choose to use the bank where they hold their personal accounts. This choice streamlines the application process, as the bank will already have your personal information and insights into your creditworthiness.

Build your network.

It takes a crew to bring your business to life. Start first with those closest to you, as your family and friends can provide irreplaceable support at this stage in the game. Whether it’s a sibling helping you with a project or your spouse patiently enduring a string of missed dinners, you’ll be set up for the most success when your inner circle is on board.

Moving out to the next sphere of influence, make efforts to connect with others in your industry. Look for partners who can help you build infrastructure and put your plans in motion. Networking events often provide opportunities to make the right contacts and get access to valuable resources.

The final component of your network is a solid mentor. Find someone who has walked a similar business path and can help you avoid both pitfalls and expedite success. You can find free mentorship through SCORE, or try to connect with someone using a platform such as LinkedIn.

The key ingredient to any good mentorship is mutual trust. When you know you can rely on each other to be honest and supportive, the stage has been set for a lasting partnership.

Hire an accountant.

There will undoubtedly be financial hurdles to clear as you work to launch your business. By finding a good accountant early on, you’ll be able to anticipate issues and apply proactive solutions. And you’ll greatly reduce your risk of getting burned by avoidable financial errors.

Choose a location.

Where will you base your business? If a home office will suffice, that’s obviously the easiest way to start. Just research the home business zoning ordinances in your area to make sure you do everything by the book.

Perhaps you’ll need office or retail space. This path requires more effort, as you’ll need to find a proper location and complete all the required paperwork before you move in. And you’ll need to budget accordingly, as it will cost more money from the onset.

Name and structure your business.

A lousy name can diminish even the best business ideas, so don't rush this step in the process. Lean on your network to find relevant names that stand out in the right way. Make sure that your preferred name isn't already in use by checking out industry directories and the website of the US Patent and Trademark Office (USPTO).

Once you’ve locked down your name, you’ll be ready to officially set up your business. There are multiple legal structures to choose from, each with their own benefits and drawbacks. Consult with your accountant or another trusted expert so you can proceed with confidence.

“Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company,” states a business structuring guide from Entrepreneur. “Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face, and your ability to raise money.”

Here’s a quick look at the most commonly used legal structures:

Sole proprietorship

This structure is one of the simplest you could ever use for your business, so it’s no coincidence then that it’s also the most popular. As the name implies, a sole proprietorship has just one owner. If you’re going into business with partners, this won’t be an option.

As a sole proprietor, you’ll enjoy the most streamlined setup possible. You won’t have partner agreements to deal with, and all the requirements will be trimmed down because you’re the only person involved.

Financially speaking, you take full responsibility for your business with a sole proprietorship. All the profits come directly to you. The government will consider you and your business as one from a tax perspective, so profits will be passed through to your personal taxes. It’s worth noting that sole proprietorships have exceptionally low tax rates.

Because of the personal nature of this structure, you’ll also be the name associated with any debts or losses. This business structure offers no liability protection, so your assets could be placed in jeopardy if your business fails.

Corporation

Many entrepreneurs wish to create separation between themselves and their businesses, alleviating the financial liability mentioned above. A corporation makes this possible, as your business will be deemed a legal entity of its own. Any debt incurred by the business wouldn’t put your assets at risk.

Corporations are much more difficult to create than sole proprietorships because you’re creating something from scratch rather than just attaching a business to your already-established records. Plan on a large amount of paperwork and considerable setup costs.

Your profits won’t be able to pass through with a corporation, so you’ll pay a corporate income tax at both the state and federal level. You will also pay taxes at the personal level to take care of earnings that may have been distributed as dividends to shareholders. So, yes, you may need to pay taxes twice with a corporation.

Partnership

Setting up a partnership can be a great route when your business involves multiple owners. Depending on your unique circumstances, you can choose from a couple of different options. First up are general partnerships, which put all the partners on equal ground. With this structure, each partner manages the business and has legal responsibility for its finances.

Limited partnerships, on the other hand, allow for a hierarchy. Select partners are given full responsibility for the business, along with the liability that comes with that. Other partners can opt to serve in an investor role and have a protective buffer between themselves and the business.

The same pass-through rules that apply to sole proprietorships also come into play with partnerships. You won’t pay corporate income tax, as you would with a corporation. All profits and losses instead pass through to the responsible partners’ personal taxes. It’s a much more user-friendly way to handle taxes.

Structuring your business as a partnership is a streamlined process, and the costs are relatively low. The main thing to remember is that in partnerships, most or all of the partners will shoulder the financial liability of the business.

S corporation

This business structure combines some of the benefits of the options listed previously. Your business is set up as its own legal entity, as with a corporation, protecting you from financial liability. Additionally, you can include as many as 100 shareholders, which could potentially bring in more investors.

At the same time, all profits and losses in an S corporation pass through to the personal level of your taxes. As with a sole proprietorship or partnership, this structure makes your taxes easier to handle each year. Because it’s profits pass through, you won’t need to pay taxes twice, as you would with a corporation.

Anytime you’re combining elements of disparate structures, you can assume the complexity of the process increases. S corporations are difficult to establish, and the fees can quickly add up. Also, there are special requirements for the running of your business. For example, you must plan shareholder and director meetings, keep detailed minutes, and then allow shareholders to vote on big decisions.

Limited liability company (LLC)

This final business structure is also among the most popular. With an LLC, you get some of the key advantages found with partnerships and corporations. Namely, liability protection and pass-through tax rules for all earnings and losses.

If this hybrid approach sounds like an S corporation, that’s because the 2 structures share a lot of DNA. The biggest differences you’ll notice are that an LLC can have an unlimited number of shareholders and every person involved in the business can be involved in decisions.

While the pass-through style of taxes you enjoy with an LLC is highly attractive, you will also be responsible for self-employment tax. This additional element can make it so you owe more to the government each tax season.

Get your documents in order.

Regardless of which business structure you choose, there will be plenty of documents required to get your operation up and running. This step is where it’s beneficial to pump the brakes and make sure you give yourself adequate time to assemble all of the necessary documents. Even the smallest errors can come back to haunt you if they cause delays or incur unnecessary fees.

The following list includes many of the documents that could be required for your business:

• Articles of incorporation
• Business terms and conditions
• Employment agreements
• Contractor agreements
• Sales terms and conditions
• Services terms and conditions
• Terms of use for website
• Privacy policy for website
• Intellectual property assignment agreements

Secure your business’s online presence.

The research process you applied to coming up with your business name should have included making sure a related domain name was available. Now you need to purchase the domain immediately so it can’t be claimed by a competitor or cybersquatter (someone who buys domains and then tries to sell them to you at an elevated price).

Once you’ve bought the domain, take efforts to make sure you will never risk losing it by missing a payment. The easiest ways to do this are to sign up for autopay with the domain provider or to put recurring payment reminders in your calendar.

In conjunction with your domain, you’ll also want to begin building your social media presence. This strategy could include Facebook, Instagram, Twitter, LinkedIn, or YouTube. Even if you don’t yet know how you’ll leverage these social channels in the future, the important thing is to create the accounts so the names are forever in your control.

Months 4-6

Now that you’ve set the foundation, it’s time to supply the fuel that will help your business move forward.

Get your finances in order.

At this point, you’ve already paid fees for activities like hiring an attorney and incorporating your business. Now it’s time to get detailed so that you can figure out how much money is required to keep the momentum going. Focus on specific dollar amounts and then develop a timeline for when you will need to acquire the money.

Your list of upcoming expenses might include permits, licenses, insurance, professional fees, inventory, supplies, equipment, vehicles, marketing, rent, or payroll.

Obtain necessary financing.

Knowing how much money you need is the single most important part of finding the right loan. And the second-most important aspect is the timeline for when you’ll need that money. Equipped with the information you gathered in the previous step, you should be ready to seek financing if it’s required.

The good news is that a vast array of financing options is available to small businesses. Here are 11 of the most popular choices:

1. SBA loans
2. Business term loans
3. Short term loans
4. Business lines of credit
5. Startup loans
6. Equipment financing
7. Merchant cash advances
8. Commercial mortgages
9. Business acquisition loans
10. Accounts receivable financing
11. Business credit cards

You may also want to pursue a microloan as another avenue for financing. Popular examples include Kiva loans, Opportunity Fund loans, and Accion loans. The dollar amounts may be smaller with a microloan, but they are often easier to qualify for and may provide just the jolt you need.

Finally, don’t forget to check for grants your business might be eligible for. The obvious advantage here is that grants never need to be repaid. The challenge is that free money is incredibly popular, so it can be difficult to find a relevant grant and then have your application accepted.

Regardless, it’s wise to survey all your options. Start by visiting Grants.gov to find out what grants the federal government offers. You’ll also find the eligibility information on the website.

You can also look into grants from other sources, such as the Halstead Grant, IdeaCafe Grant, Amber Grant, and National Association for the Self-Employed (NASE) Micro-Business Grants.

When you’ve found the financing product that best matches your needs, set aside plenty of time to accurately complete the application. In the rush to get funding, many small business owners fail to give this process the attention it requires. Doing so will only cause problems. Lenders pore over applications like detectives, looking for indicators of your financial reliability. One of the best ways to showcase it is by submitting a polished application that includes every document and detail they requested.

Enlist some digital help.

There are simply too many responsibilities for you to handle every aspect of your business manually. Luckily, technology has reached a point where you can automate and streamline many of the tasks that were aggravating entrepreneurs just a few short years ago.

The main objective here is time management. Any tool that saves you time will also save you money.

“Is the saying, ‘Time is money,’ true?” asks an entrepreneurial resource from the SBA. “If your business runs out of money, you always have the opportunity to get more.

More money is ‘simply a sale away.’ On the other hand, once time is past you can never get that time back nor can you add more hours to a day. Yes, poor time management can cost you and your business tremendous amounts of money. Realize, however, that the better you manage your time the more money you can earn. With time management, business owners maximize how much they get done each working day.”

So just how do you reclaim more time each day? Here are some digital tools you might want to consider:

Marketo: This tool helps you engage with your audience and track the impact by combining your email, social, digital, and mobile marketing efforts in one place.

Deluxe: Payroll can be a nightmare for small business owners, but Deluxe automates many of these tasks and helps reduce errors.

QuickBooks: This powerful tool does most of the legwork for you when it comes to tracking mileage and handling expense reports.

Mailchimp: Email marketing is an important strategy for most small businesses. Mailchimp elevates your efforts by automatically sending messages for you and providing tracking.

Hootsuite: For your social media efforts, consider a tool like Hootsuite. It gives you a hub from which to post on all channels, which automates and simplifies the process.

RescueTime: This app is engineered for time management, tracking your online habits, and enabling you to set realistic goals for improvement.

Slack: Not only will this app make your company communication smoother, but it also enhances your project management efforts.

Square: This handy card-reader plugs directly into your phone or tablet. And it saves you time and effort on the backend by emailing or texting a receipt directly to the customer.

TripIt: Manage your travel and improve team coordination with this convenient resource. It’s a great way to manage crucial details and keep everyone connected while on the road.

Quip: By improving collaboration, this tool makes it easier to hit important milestones. Quip really helps your team get on the same page and manage workflow. 

17hats: This app can improve your efficiency and data security by serving as a hub for your contracts, invoices, and workflow.

Months 7-9

Now is the time to focus on sustainability. Many of the tasks specific to “starting up” have been handled, paving the way for strategies that will carry your business well into the future.

Revisit your business plan.

Your business plan should contain descriptions of your business, your plan for financial management, your plan for business management, and your marketing strategies. Take stock of how you’ve done so far, then create a strategic plan for your next 12 months.

First off, what do you most want to accomplish? Identify a BHAG (Big Hairy Audacious Goal) for your business, then outline the steps necessary to help you reach it. You’ll also need to establish methods for tracking your progress. For convenience and accuracy, consider using one of the digital tools mentioned in the earlier section.

Each month, take stock of your progress. If you’re struggling to stay on track, consider modifying the goal to ensure it remains attainable. What’s important is that you stay focused on the future and continue to push yourself.

Put your marketing plans into practice.

Using your business plan as a road map, start courting the customers who will become the lifeblood of your business. Here are 4 possible strategies for building your customer base:

1. Provide free resources.

Most customers love perks, so don’t be afraid to entice people to your website with a free resource. If you’re positioning yourself as an industry expert, consider giving away a white paper. If you sell a product, you could provide samples in exchange for filling out your online form.

2. Partner up

In these early stages, your budget could be small and your customer list even smaller. By joining forces with a noncompeting business in your industry, you can gain access to a new audience and get more bang for your marketing bucks.

3. Socialize more

Facebook is usually the prime social channel for your marketing efforts, but there are plenty of other channels for you to explore. Put yourself in your customers’ shoes and think of where they spend their time online. If you can build a presence on a lesser-known but equally relevant channel, the impact can be substantial.

4. Create some fans

As you reach more people, it’s important to do things that get them excited about your business. You might want to provide special promotions or rewards to those who are on your email list or follow your social channels. Whatever you decide, make sure there’s a clear benefit for those who have been kind enough to connect with your communications.

Focus on service.

Getting a customer to visit your store, office, or website is great. But it’s the repeat visits that will make or break your business. Customer service is where you can distinguish yourself and convert the casual shopper into a longtime supporter.

Research shows that if an individual has a positive customer experience, about 70% of the time they’ll recommend that business to their friends and family. On the flip side, bad customer experiences cost American businesses about $41 billion each year. Modern customers have numerous options to choose from, so they simply won’t settle for lackluster experiences. This power to choose means that more than 90% of consumers will take action if they are dissatisfied with the service they’ve received.

Months 10-12

Congratulations on making it to this milestone! Your first year in business will bring plenty of ups and downs, but you should celebrate the fact that you were in a position to experience them. Remember, most people have business ideas. But you were one of the select few who had the determination and creativity necessary to make your business a reality.

Here are a couple of final recommendations for your first year:

Build out your infrastructure.

Now is your chance to refine your operations and ensure you’ve made the necessary connections with suppliers, contractors, partners, and employees. It’s important to continue attending industry networking events, as they’ll help you meet individuals who can elevate your business with their services and skills.

Make your presence known.

You’ve already set up social accounts and launched your marketing initiatives, but there’s still more to be done. Blogs may get a bad rap in some industries, but they’re a reliable way to reach your audience and provide SEO benefits. Also, take the time to add your business to relevant directories and listings. These entries will help you appear in online searches and stay top of mind.

Consider writing a press release that can be sent out to the news outlets in your region. Getting an article published in the right place is an excellent way to bring legitimacy and respect to your business even before you’ve had a chance to build your reputation.

Now that you’ve finished the initial tasks of starting a business and have a plan for the coming year, it’s time to focus on execution. Entrust all the small and recurring tasks to automated tools so you can dedicate time to the differentials that will truly set your business apart from the competition.

This business is your baby. You brought it into the world, and now you have the opportunity to watch in wonder as it grows.

Since Dominos launched its famous “30-minute or less” delivery guarantee in 1984, the pizzeria has dominated the world of food delivery. A pizza restaurant’s delivery value proposition was unrivaled because:

• Pizzas are easy to transport.
• Pizzerias hired staff specifically for delivery.
• Delivery drivers used an insulated carrier to keep the pizzas hot.
• Pizza restaurants limited delivery to specific areas.

However, in recent years, customers have demanded more variety with their food delivery options. As a result, delivery service companies like Postmates, DoorDash, Uber Eats, and GrubHub have started to pop up in cities across the world.

These companies have streamlined delivery logistics, leveraged peer-to-peer networking, developed integrated delivery technology, and found ways to increase the portability of many types of food. The advancements these brands have made in food delivery have helped them become household names.

Food delivery services have lowered the barrier of entry for local restaurants to start delivering food to their surrounding areas. If you’re a restaurant owner, you may be wondering if you should partner with these meal delivery services. 

What sort of profits can you expect? How much labor and internal cost will you accrue? We’re answering all of your questions below so you can decide for yourself—and prepare your staff for changes in demand. 

Customer Demand for Meal Delivery Keeps Rising 

When you take a step back and look at the statistics, it’s shocking how many people take advantage of services like GrubHub and DoorDash. In a survey of nearly 3,000 people by research group Zion & Zion, 40% report using a meal delivery service at least once in the past 90 days. The main demographics of people using these services are young (63% of respondents were between the ages of 18 and 29) and from lower-income brackets. 

Outside of multi-restaurant meal delivery services like Uber Eats, some restaurants are starting to introduce their own delivery services. Outback Steakhouse, Chipotle, and Panera are 3 such brands that have launched internal delivery in the past 2 years, with many other restaurants following in their footsteps.   

These trends mean the average restaurant owner has 3 choices:

• Partner with an existing service (or multiple services) like DoorDash or GrubHub.
• Hire delivery drivers and promote your own internal delivery system.
• Ignore the delivery trend and continue asking customers to come to you. 

Unfortunately, there is no easy answer. GrubHub works with all kinds of food styles and costs, from deliveries off the McDonald’s Dollar Menu to high-end steak dinners. It’s up to your business to decide. 

Option 1: Partnering with DoorDash and Other Delivery Services

One of the main benefits of working with a multi-restaurant food delivery service is marketing. Your restaurant can get in front of new customers who might not have heard of you or would otherwise not drive past your storefront. 

Customers search these platforms based on food type, location, price, ratings, and other variables that can help you land on their radar. If you meet their search criteria, you stand a good chance of landing their business.

This accessibility means you can use delivery services like DoorDash, Uber Eats, or Postmates to access new customers like never before.

However, you need to prepare for the fees that come with these partnerships. While each app has its own service fees, restaurateurs report that they lose an average of 30% of the meal costs when working with a delivery service. While larger chains can negotiate better fees because of the sheer volume of orders they bring in, small businesses should expect a hit on their profit margins.

“We put up with drivers and fees because delivery brings in a lot of new tickets and customers, and it also helps spread the word about us,” Joel Dooley, general manager at Munchiez, a sandwich shop based in Florida, tells Skift Table.

In this way, you may treat meal delivery services with the same care and expectations of a Groupon promotion. At best, you may break even, but the service provided to your customers and marketing opportunities can help brand loyalty and increase the customer lifetime value. 

Option 2: Developing Your Own Delivery System

If the idea of working with an unpredictable third party and cutting out 30% of your profits for each order sounds unappealing, then you may want to consider setting up your own delivery system. This approach also comes with benefits and drawbacks. 

While you won’t have to pay the fee, you will need to hire staff members to run orders across town. These positions will require an hourly wage, along with stipends for mileage if your drivers use their own cars. You may even need to invest in fleet insurance to protect your drivers in the event of an accident.

Juggling the supply and demand of your own system can become taxing. You can lose money if you hire more drivers than you need to deliver food. Alternatively, with only 1 or 2 drivers, you could create a bottleneck while waiting for your drivers to return from a delivery. Finally, with your own delivery solution, you’re responsible for all the marketing and promotions associated with your delivery.

While there can certainly be financial incentives with creating your own delivery system, the risks and investments might make it more than you want to handle. 

Option 3: Staying Away from Delivery (for Now)

With the rising customer demand for food delivery options and the increasing number of restaurants offering delivery, you might feel pressure to join the food delivery trend. However, as we’ve outlined above, there are substantial risks when choosing either option. Therefore, it’s completely reasonable for restaurant owners to avoid offering food delivery at all—for now.

If you’re not sure whether you want to invest in delivery or partner with Uber Eats or another delivery provider, you may have some leeway to see how local restaurateurs and state regulators work with these companies over the new few years. 

In an article for Chicago Business, Joe Cahill explained how 800 Chicago restaurant owners are pressing for new food-handling and cleanliness rules on food delivery services. In California, labor disputes are heating up as worker advocates say food delivery companies need to treat their drivers like employees, not independent contractors. 

Similar problems exist across various states and cities regarding this industry and how to treat both restaurant owners and drivers fairly.  

The industry of multi-restaurant delivery services could look significantly different within a few years, depending on where you live. You may want to see how regulations pan out in your area before choosing the best brand to partner with or deciding to create your own delivery system. 

Make the Right Choice for Your Restaurant

Look at your restaurant’s gross margin and the estimated costs of partnering with a delivery service or hiring an internal delivery driver. How much can you afford to cut into your bottom line? How many deliveries could you afford to make before you started losing money? Are the new sales worth it? 

These are just a few questions to guide your discussion with your general manager and accountant as you consider whether to start offering food delivery. 

Do you need financing to build out a delivery program for your restaurant? Learn more about restaurant business loans.

Food service might be the most volatile industry. Between operational issues, changing consumer trends, and other internal and external forces, your restaurant could fail for a mountain of reasons. 

As a restaurant owner, you need to recognize these risks and strive to continuously mitigate their effect on your business.

We’ve compiled seven of the most common reasons that restaurants struggle and how restaurateurs can overcome these challenges. Use this list as a guide to measure the current and ongoing state of your restaurant and make changes, when necessary, to keep your business thriving.

1. Ballooning Menu

Is your menu as thick as a copy of Moby Dick? Do you keep adding new items to appease broader palates? If this sounds like your restaurant, it may be time to cut your menu down. 

They say that if you’re good at a lot of things, you can’t be great at anything. This adage is true with restaurants. If you have several options on your menu, especially across different cuisines, it’ll be hard to stand out. 

In a survey of the top 500 restaurant chains, most menus had an average of 130 items. This list includes sizes, appetizers, and drinks. 

The size of your menu will depend on your restaurant, but often, you’ll find value in condensing your menu. 

Look at your tickets and see which items have the lowest order rate. Test different menu sizes and see how your customers respond. You most likely will find that your menu follows the 80-20 rule: the top 20% of items make up 80% of your sales. 

Fewer items mean less work for your kitchen staff and more opportunities to perfect these dishes. A smaller menu also means fewer ingredients and provisions that you’ll need to stock, which can cut down your expenses significantly.

2. Attracting New Customers

Every restaurant has its regulars. The staff loves them. They tip well. They are important to the success of your business. 

However, you also need to appeal to new customers. Your business needs a steady flow of new customers to keep growing. New patrons fill the space left by lost customers and lead to increased profits.

Kaleb Harrell, cofounder of Hawkers Asian Street Fare, shared how he handed out samples and discount cards at an event. The company spent a total of $2,000. However, if it acquired even 25 new customers out of 1,000 people at the event, the company would profit more than $1,500 per customer over 2 years. One event is worth almost $40,000 to them. 

Consider how you market your business and what opportunities exist for you to bring in new people.  

3. Keeping Up with Your Books

Most restaurants don’t fall into the red overnight. Instead, restaurateurs continue cutting into their profits and neglecting operational problems until they are too far in debt to keep their doors open. 

If you want your restaurant to thrive, keep a close eye on your finances. This practice includes closing the books nightly to see what expenses and profits you accrued and reviewing your finances monthly to account for major expenses or changes. 

Be diligent with your bookkeeping, and don’t be afraid to cut excessive spending quickly.

If you don’t have a financial background, then you may want to find an accountant who specializes in restaurant management. He or she can take you on as a client and notify you of financial trends that might be killing your restaurant.

4. Keeping Up With New Restaurant Technology

The technology available to restaurant owners today is nothing short of amazing. You can measure restaurant noise levels and adjust your music automatically to improve customer satisfaction. You can use inventory management software to track and order ingredients in real-time when your stock reaches certain levels. 

In short, if your restaurant has inefficiencies, there’s probably software to help, but keeping up with constantly evolving technology and selecting the right ones for your restaurant can be a challenge.

Look at your day-to-day tasks, along with the challenges that your team members face. What slows them down? Where do you experience bottlenecks? Determining the answers to these questions and the effect they have on your bottom line will help you decide whether you should pursue a technological solution.

If you can automate a clunky process or shave a few minutes off the wait times for your customers, then you can make a significant impact on your productivity and profits.  

5. Training Your Staff

On-the-job training can be incredibly powerful and effective. Your new restaurant employees can learn from your more experienced staff members while applying the lessons directly as they work. However, this method shouldn’t be the only training that your staff members receive. 

As a restaurant owner, you’re staking your reputation every time someone dines at your establishment. However, you can’t oversee every order, so you must trust your team. If you neglect training, your restaurant is more likely to have inconsistencies with quality, service, messaging, and more. 

Strive to develop a culture of learning in your restaurant. Empower and reward senior employees for training staff. Consider setting aside time at least once per month for team training. You can do this as a whole staff or have your staff hold training during different shifts. 

Review industry best practices, customer service expectations, and other ways team members can improve their work. Even if you don’t have new staff, this training can help refresh your employees and correct any issues they have.

6. Handling Difficult Employees on Staff

The restaurant business is personal. You work alongside team members all day, serving food and helping customers. 

It’s not uncommon for employees and management to develop friendships. Many restaurant owners even hire significant others and family members to their staff. These relationships are often more personal than in other industries.

As a result, it can be difficult to let staff go—especially if they are someone close to you personally.

However, a toxic team member can drag the whole restaurant down. Not only will he or she provide poor service to customers, but the lack of accountability can drive your good employees away.

Review your HR manual (or develop one through the help of examples online) and create a process for reprimanding employees. This process can include disciplinary activities like warnings and write-ups to help improve the behavior of these employees.

Documenting toxic behavior will help you create a case for firing your staff members that is transparent and fair to all employees—even those with whom you have a close relationship. 

7. Losing Your Vision for Your Business

When you first opened your doors, you likely had a vision for the type of restaurant you wanted to create. You probably had a certain passion that made you excited to come to work every day.

Over time, it can become easy to ignore the forest for the trees. You get so focused on small problems and challenges that you forget your overall dream. You forget why you started the restaurant in the first place.

Take some time for yourself at least once a quarter to look at your business from a high level. Are you providing the value you want to customers? Do your menu and service reflect your brand? Recalibrate and refocus to get your restaurant back on track. 

Running a Restaurant Isn’t Easy

Simply put, operating a successful restaurant takes a lot of work—otherwise, everyone would do it. The seven challenges above can impact your restaurant quickly if you’re not paying attention. However, if you’re proactive and diligent with your management approach, you can mitigate these risks and increase your chances of success.

Are you needing additional financing to support your restaurant? Learn more about restaurant business loans.

The new year changes the landscape in many US states, making some places better to do business—and others much worse. Just like in real estate, your “location, location, location” can influence your business’s chances of success or failure. 

This adage is also true at the state level, where state regulations can be a significant factor in the difference between your business’s profits and losses. We took a look at which states make it the hardest to do business and which states are making it even harder in 2020.

Several reputable organizations have ranked the best and worst states for small businesses. The Small Business & Enterprise Council ranks all 50 states by business policies and tax rates. Wallethub’s latest Best & Worst States to Start a Business list analyzes access to resources and business costs. And CNBC just updated its America’s Top States for Business, which considers each state’s workforces, economies, and infrastructure.

We combined these 3 lists and averaged the rankings because their methodologies vary a great deal. Consider California, which is ranked next-to-last at No. 49 in the Small Business & Enterprise Council (SBEC) ranking because of its high corporate income taxes and expensive gasoline. On the other hand, Wallethub ranks California all the way up at No. 8 thanks to the availability of venture capital and very strong average business revenue. 

These significant differences are why we’re presenting a “ranking average” that factors in all 50 state’s rankings. And when we average these rankings, here are the states that consistently finished near the bottom of the list. 

10. Maine

Maine is also the home of a curious 2017 legal ruling where the lack of an Oxford comma in statehouse legislation cost one business $5 million. A Maine dairy company was forced to pay its truck drivers $5 million because of a state law that meant to exempt overtime pay rules from truckers whose job involved “packing for shipment or distribution.” 

The problem? That phrase did not separate “packing for shipment” and “distribution” with a comma, so truckers argued that it did not apply to drivers who only distributed and did not pack the cargo. The truckers won the multimillion-dollar settlement, and the law was eventually revised.

But consider that the Maine legislature allowed such a snafu, and an individual business took the financial hit for the oversight.

9. Maryland

For the rest of us, Maryland scores consistently poorly with a very high cost of living and a high cost of doing business. Rent and regulation conditions in the most highly populated areas of the state make it hard to do business in large parts of Maryland.

New small business laws in 2020 include the increased minimum wage of $11, plus a 9% raise in Maryland commercial property taxes, marking the 7th consecutive year those taxes have gone up. 

8. Delaware

Unfortunately, this practice is subsidized in part by Delaware small business taxpayers. The state has far more complicated tax regulations for its own small businesses than the bigger out-of-staters. Delaware’s exceptionally high worker’s compensation premiums and difficulty in securing small business loans also contribute to Delaware having the 2nd-lowest small business survival rate in the country. 

7. New York

But New York is also a high-risk, high-reward state. The state’s access to venture capital, high-spending clientele, and potential for national visibility is the envy of most any other place in the nation. 

A slew of new minimum wage laws kicked in statewide on January 1, 2020, though these varied by region.

6. West Virginia

Small businesses can do well in West Virginia if they capitalize on the state’s powerful energy export trade. But few lucrative West Virginia small business opportunities exist outside the energy sector.

5. Connecticut

But there are other tough realities to doing business in the Constitution State. Connecticut has an unusually high cost of living, and a looming unfunded pension crisis in the state will likely spell higher taxes for the state in 2020 and beyond.

As of January 1, Connecticut expanded its 6.35% sales tax to include previously exempt items like laundry and dry cleaning, interior design purchases, parking fees, and safety clothing.

4. Vermont

But Green Mountain State businesses and those recent relocators face new 2020 costs with a recent property tax increase. The state’s minimum wage also increased by 18 cents on January 1, raising it to $10.96.

3. New Jersey

Garden State small business employers are still absorbing the costs of state-mandated paid sick leave and expanded family leave laws that went into effect last year. And as it will every year until 2024, the state’s minimum wage just went up by a dollar to $11.

2. Rhode Island

The smallest of states also raised its minimum wage on the 1st of the year, hiking the pay rate to $11.50. Rhode Island also recently reinstated the individual mandate of the Affordable Care Act, which had been effectively eliminated by the Trump Tax Plan, and added a tax penalty for any employees who do not have a health insurance policy.

1. Hawaii

The huge advantage, though, is that you’re in Hawaii, a beautiful area where tourists crank out mountains of disposable income. But certain Hawaii small business sectors face pesky new regulations in 2020. Retailers can no longer use plastic bags, and restaurants are required to provide juice, white milk, or water as children’s beverages. Hawaii and West Virginia are the regional outliers on this ranking. Most of these states are in New England and the upper northeast region of the US, something to take into account if relocating or expanding your business to a new state. 

No matter what state your business is located in, it’s always helpful to have more capital. Every state in the US has an internet connection, allowing you to apply for a loan online  to put your business in the best state of mind.

You opened a business to make money, not to give things away for free. However, sometimes offering free services can bolster your business. The key to having free services work for and not against you is understanding the right way to go about it. To help you navigate these murky waters, we’re outlining some essential dos and don’ts of offering free services. 

When to offer free services.

Free services: You gotta know when to hold ‘em and when to fold ‘em. Ultimately, you’ll need to review the unique costs and benefits for your business, but here are some of the best reasons to offer free services. 

If it’s something that doesn’t cost you anything.

There are certain cases where offering a product or service for free comes at no additional cost to the business. This is often the case in audience-based businesses. If you have a seat that would otherwise be left empty, you’re paying the cost of that seat whether or not a customer occupies it. Theater, seminar, or web-based classes are prime examples where offering a free slot may benefit your business if it means building word of mouth. If any part of your business is “set it and forget it,” this option could be great for you. 

Deciding if this applies to your business will depend on your industry. While there may be empty tables in a restaurant, allowing patrons to sit down for a free dinner comes with the costs of the food and beverage the customers would consume— not to mention the additional labor associated with accommodating them. 

If you can transition them to a paid user down the road.

This strategy is a common approach to offering free services. We see it everywhere from a Disney+ trial subscription to credit cards that waive APR or an annual fee for new customers. The theory behind these introductory offers is that you can show the customer how baller your business/product is. Once the offer is over, they’ll be hooked. Think of the introductory offer as a salesperson closing the deal for you. 

If you can offer a pared-down version of your paid product.

You may have been reading this article thinking, “Wait a second, Lendio offers free accounting. Where does that fit in?” Right here, and we’re telling you because transparency is an essential element in successfully offering free services. Lendio's software has multiple tiers. We’re able to offer accounting software for free to users who want a pared-down experience. Then, we offer more comprehensive products that include accounting help from professional bookkeepers for businesses that need more assistance with their bookkeeping. 

Free options like this work well for new businesses—especially in the tech space. It can help you build word of mouth and grow your business. To be successful, though, you need to make sure your free product maintains your company’s standards. There’s no point in offering something free if customers are going to be disappointed with the experience. 

If the benefits generally outweigh the costs.

In the end, you need to ensure the benefits of offering free services will outweigh the costs. That’s true of the reasons listed above, as well as any others you may be considering. It’s no good to offer free services if they’re going to drain your small business of money and resources. If you determine that offering something for free can benefit you, it might be worth a try!

How to offer free services.

Once you decide to offer a free product or service, the second step is execution. Much to our chagrin, customers will not give you a gold star for offering something for free. You need to execute your complimentary services well. 

Set clear expectations

Expectations can make or break the offer of free services. Make sure that the details of the offer are clearly outlined—for the benefit of both you and your customer. Explain expectations at the time of the offer. Don’t feel that you need to hide anything. If they only get limited access to your online classes, let them know. If you can provide a one-time offer for free admission, that’s great as long as they know. If you can provide a free trial or discount, provide clear communication of the terms. Setting clear expectations up front can prevent people from feeling surprised and disappointed, aka saving you a headache down the line. 

Keep communication professional.

If a customer is unhappy with your free services (we hate to see it, but occasional unhappiness is inevitable in love and business), you have to take it in stride. Remember: if you treat them with compassion when they’re angry, they may remember that when the cortisol dissipates, giving you the opportunity to win them over in the end. 

Keep communication professional, and under no circumstances should you make them feel you’re put out over complaints about a free service. If you’re not ready to receive negative feedback on something you’ve offered for free, you’re not ready to offer something for free. 

When to walk away.

In some industries, like creative fields, professionals may find themselves bombarded with asks for free services. If you find yourself on the receiving end of relentless requests for free work from the same person, that may be a sign they don’t value the work you do. Offering free services should be an opportunity to market your business. It should never be an avenue for people to take advantage of you.

It’s okay to constantly reevaluate your approach to free services. If it’s no longer working for you, change it. When customers ask why, you can clearly tell them. Again, expectations go a long way in securing and maintaining customer loyalty.