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If you’re thinking of starting a medical practice, you’re in superb company, as the American Medical Association estimates that around 49% of doctors in the U.S. run their own private medical practice. While starting your own medical practice may seem like a daunting task, you may want to start your own because:

1. You want to have autonomy over the kind of patient care you provide as a physician
2. You want to set your own work hours, to work as little or as much as you need to
3. You want a business that is flexible enough to be present for your children, elderly loved ones, or other dependents you need to care for.

All these are wonderful reasons to start a medical practice, and in this post, we will provide you with a step-by-step checklist to help you start your practice on the right foot. We will touch on how to:

1. Create a business plan for your practice
2. Obtain funding for initial expenses
3. Consult with a business attorney
4. Get your licenses and credentials in order for a smoother registration experience
5. Secure a location for your practice
6. Register with insurance companies
7. Get start-up equipment
8. Hire and train staff
9. Devise a marketing strategy
10. Launch your medical practice and what to do after launch

Let’s delve into the checklist.

A checklist for starting a medical practice: Before you launch.

1. Create a business plan.

Just the thought of putting together a business plan can scare away would-be business owners. But the truth is, a medical practice is a business. Creating a business plan that captures the objectives for your business is a must to provide your medical practice with a sense of direction, optimize your business for growth, help you document the strategies that help ensure that your practice becomes profitable, and get the funding you need to start.

2. Obtain funding

Now that you have your business plan, it is time to obtain funding for your medical practice. Until you’ve established consistent revenue streams, you will need to obtain funding to cover:

• Payroll
• Medical equipment
• Software
• Rent for your office space
• Vendors (Ex: medical billing, lab testing, and medical transcription vendors, if not covered by your in-house team)
• Business registration costs 
• Taxes

While the exact amount you need might differ based on several factors including the specialty of your practice, location, and the equipment you need, according to The Startup DPC, starting a modest two-room primary care office with one employee could require up to $21,000 in start-up costs.

3. Consult with a business attorney. 

It would be a shame to start a thriving medical practice only for an expensive lawsuit to shut it all down. During the pre-launch period, it is wise to get in touch with an attorney who specializes in helping medical businesses. An experienced attorney will not only help you with the complicated process of having your medical practice legally set up in your state. They will also be able to help you with things like employee and patient contracts, as well as advise you on the kind of malpractice insurance you might need to protect your practice.

4. Get your licenses and credentials in order.

To provide proof to your state, you will need to produce your medical school diploma and copies of board certifications required for your specialty. Thus, it is important to have these documents handy as you prepare to start your medical practice. Besides proof of your medical education, license, and board certifications, you will also need to gather the following documents for some of the steps that follow in this checklist.

• Drug Enforcement Agency (DEA) license
• Controlled Dangerous Substance license
• Malpractice insurance documentation
• Explanation of any past malpractices 

Obtaining and/or gathering all these documents will make it easier when you have to submit them at the relevant step in the process. They are especially critical when the time comes for you to be credentialed, so you can be reimbursed by insurance companies for your services.

5. Secure the location for your medical practice.

A medical practice that is easily accessible by your patients is important as you choose and secure a location for your medical practice. Choosing the right space for your practice will also take into consideration factors like:

• Storage for medical equipment you will be using
• Consulting room/office space
• Space for exam rooms
• A reception/intake area for patients

6. Register with insurance companies.

In order to receive third-party reimbursement for the care you provide within your medical practice, you will need to be registered with insurance companies. In order for this to happen, you must be credentialed.

While the credentialing process might differ slightly from state to state, here are five things you will absolutely need in order to be credentialed.

1. Apply for and obtain a Tax ID from the Internal Revenue Service. An attorney or accountant will usually be able to help you with this.
2. Register for a Type 2 National Provider Identifier.
3. Register for a bank account under the legal name of your medical practice.
4. Look for and settle on the location that will house your medical practice
5. Obtain malpractice insurance.

7. Get start-up equipment for your medical practice.

You will need to outfit your office with the standard medical equipment mandated by your state, as well as the pieces of equipment that will allow you to provide the best care to your patients.

Equipment you often need before you open your doors include:

1. An AED (automated external defibrillator)
2. Basic diagnostic tools, like pulse oximeters, thermometers, blood pressure cuffs, stethoscopes, otoscopes, and flash lights
3. Scales 
4. Height rods
5. Exam tables
6. Disinfecting sprays and wipes
7. Hand washing supplies, like hand soap and hand sanitizers
8. Containers for used sharps 
9. Containers for biohazard waste
10. Partitions and privacy screens
11. Personal protective equipment, including gloves, face masks/shields, and gowns
12. An EKG unit
13. Computers for charting
14. UV lighting

You will also need medical practice management software to help your practice manage billing, health records, scheduling, and more.

Learn more about our medical equipment financingto help you meet your medical equipment needs for your practice. 

8. Hire and train staff.

Hiring the staff you need for your medical practice will depend on what your needs are. Perhaps, to get started, all you need is a medical assistant to help you take initial medical histories when your new patients start coming in.

If you need more than that, it is often worth hiring a registered nurse (RN) or licensed practical nurse (LPN/LVN) to help you. Once you’ve hired the appropriate staff, it is worth taking the time to train your staff on your expectations and even your philosophy for providing medical care before you launch. Having a receptionist to handle incoming calls and schedule appointments is also helpful.

9. Devise a marketing strategy for your medical practice.

Every successful business has a marketing strategy. The list below is not exhaustive, but here are six great ways to market your medical practice, even before you launch.

Establish a website.

Websites are still essential. Think about your own actions. What is one of the things you do when one of your friends tells you about a new business? You will likely use Google, review sites, and other tools to look them up online and be directed to their website. Having your website up before launch day ensures you will be found on search engines and introduces potential patients to your medical practice and the staff that will be serving them. 

Set up your social media pages.

A recent survey by Patients Like Me, found that 11% of U.S. adults surveyed say they turn to social media for health information. With over a billion users logging into social media sites on a daily basis, it makes sense for your medical practice to create pages on popular social media platforms like Facebook and Instagram. Social media is another avenue for potential patients to discover your practice and receive accurate health information. And it is helpful that several social media platforms have tools that are geared toward business owners. Furthermore, if you ever decide to run ads on a social media platform, having an account will come in handy.

Set up email marketing.

Stay in touch with your patients between visits or send them special sales messages with a monthly newsletter. Email marketing can be a great way to stay top of mind with your patients.

Claim local listings.

Search engines like Google, Bing, and Yahoo allow businesses to claim their businesses online and create local listings. If you have a location, claiming your local listing for your medical practice is a great way to get the word out there about your business.

Direct mailers

Some people will never find out about your practice without direct mail sent to their homes. Don’t leave these people out of your marketing!

Join your local Chamber of Commerce.

You will meet other business owners at your local chamber of commerce meeting. In addition, it’s a good way to become involved in your local community while spreading the word about your new practice.

Launching your medical practice (and what to do post-launch).

Congratulations! You’ve done a lot of heavy lifting, and now your medical practice is successfully launched. Now it’s time to begin establishing those systems and processes you laid out during the pre-launch period. This is your time to shine as a medical practitioner and provide your best care.

As your first patients begin to come in, now is a good time to start working with a medical billing company to ensure your services are billed correctly and collected. 

This is also when you start building your reputation as a business. During the post-launch period, sign up with review websites like HealthGrades or RateMDs. People who want to leave reviews on these websites will be able to do so easily if you’re registered already. 

It is important to realize that, no matter what you do as a business owner, there are some people who will leave a bad review on either of these websites or even on your Google Local Listing. This may likely not happen during your first few weeks as a business, but it will happen. If you’re registered on these review websites, you will be able to control the conversation somewhat and provide a public explanation and/or apology to the unhappy patron.

You’ve got this!

Starting a medical practice can seem daunting. While there will be plenty of other things to do to succeed in your new endeavor, this checklist will help you get your medical practice off to a great start. 

For many people who want to start their own medical practice, a lack of funding is often an obstacle. Don’t let that get in your way. Learn how you could get the money you need to fund your medical practice or get the medical equipment you need to start today.

You’ve toyed with the idea of starting a healthcare business, but you might not be sure what business you could start. Even if you have a healthcare business idea, you’re not sure if it would be profitable or have the potential to grow over the next few years. 

According to the Centers for Medicare and Medicaid Services, U.S. national healthcare spending grew to $4.3 trillion in 2021. This equaled an average of $12,914 per person, and it accounted for 18.3% of the Gross Domestic Product (GDP). While a lot of this money was spent with large healthcare organizations, a considerable amount was paid to private healthcare business owners as well. 

Healthcare businesses are not only the focus of so much spending, but also much more likely to survive and thrive. According to the U.S. Bureau of Labor Statistics, only 15.6% of healthcare businesses fail in the first year, significantly below the 21% average first-year failure rate across all industries.

In short, starting a healthcare business is an extremely promising prospect right now. To help you narrow down the direction you could take, we will cover 24 healthcare business ideas—any of which you could start executing over the next few weeks.

Let’s dive in.

Based on U.S. Bureau of Labor Statistics Data of survival rates of businesses started in 2017.

Growth and cost comparison.

Healthcare business growth and cost comparison.

There are multiple factors to consider when choosing which type of healthcare business you want to start, including your own expertise and personal interests. The following chart gives you an overview of the estimated market size, compound annual growth rate (CAGR), and startup costs for common business types within the healthcare industry. Keep in mind that costs can vary considerably, depending on how you set up your business and where you are located.

Healthcare business ideas.

24 healthcare business ideas.

Read on to learn more about individual healthcare business ideas.

Healthcare business ideas for entrepreneurs

1. Telehealth software solutions

2. Medical equipment rental and maintenance service

3. Nurse concierge service

4. Medical staffing agency

5. Sole practice business

6. Medical billing service

7. Home healthcare agency/home care agency

8. Massage therapy

9. Outpatient substance abuse management

10. Medical supply courier services

11. Drug testing business

12. Infusion services

13. Medical apparel sales

14. Medical waste handling

15. Medical laundry services

16. Assisted-living services

17. Senior day care center

18. Medical transcription service

19. Legal nurse consulting

20. Hydration therapy business

21. In-home physical and occupational therapy services

22. Autism support services

23. Retail pharmacy store

24. Non-emergency medical transportation

1. Telehealth software solutions.

At the height of the COVID-19 pandemic, telehealth services rose to the forefront. Now, although many healthcare practices have returned to seeing patients in person, at least 37% of U.S. adults continue to use telehealth services. This is where your telehealth software solution could come in.

An app or software that enhances the telehealth experience is always welcome in the market. This may include tools that allow healthcare providers, such as doctors and nurse practitioners, to monitor their patients whom they are serving remotely or even virtual reality telehealth solutions.

2. Medical equipment rental and maintenance service.

Medical equipment is expensive. Renting can be a cost-effective way for some families to get a piece of medical equipment their loved one needs. With a medical equipment rental service, you could start to fill this gap, connecting patients in need with the right devices. In addition to renting equipment, your business may also provide certified technicians and engineers to maintain the equipment and carry out repairs.

3. Nurse concierge service.

If you’re an experienced nurse who is looking for a change of scenery beyond bedside nursing, you could consider concierge nursing. Concierge nursing is private nursing and it can span a variety of patient types. For example, if you have pediatric nursing experience, your concierge nurse business could focus on caring for children. Other nurse concierge services specialize in providing care services for high-income clientele.

With a host of niches to be filled with a concierge nursing business, your possibilities are endless. 

4. Medical staffing agency.

In the U.S., it can take up to 90 days to fill a vacant registered nurse role. Meanwhile, many hospitals are understaffed and need talent quickly to fill the need. Medical staffing agencies act as matchmakers between professional medical professionals and the health organizations that need them. 

They can be critical in shortening this long timeline and create a win-win scenario for both sides. The medical professional avoids the burden of applying with 10 or 15 employers to find the perfect role. Once they apply with a medical staffing agency, the agency does the work of finding roles to suit the professional’s needs. In turn, the hospital organization benefits by gaining access to vetted professionals and filling staff shortages faster. 

5. Sole practice business.

If you’re a licensed healthcare professional who can practice independently, starting a sole practice such as your own medical, dental, optometry, chiropractic, or physical therapy practice may be the most logical business for you to start.

6. Medical billing service.

Effective billing is the lifeblood of any health practice. While bigger institutions may have their own internal billing departments, smaller healthcare businesses and medical practices often depend heavily on medical billing services to keep the lights on. If you’re thinking about starting a medical billing services company, you will always find high demand in the marketplace.

7. Home healthcare agency/homecare agency.

Medical home health agencies offer nursing care to seniors, people recovering from surgery or a severe illness, or for people who are on hospice/end-of-life care. Home healthcare professionals may also come into private homes to help disabled adults with their long-term medical needs. Non-medical home care agencies help a wide range of clients (including the elderly and disabled adults) with activities of daily living, such as bathing, dressing up, and companion care.

8. Massage therapy

As a massage therapist, you can break out on your own and start a business. Depending on where you live, this might mean investing in proper licensing. In most jurisdictions, you cannot start a massage therapy business unless you are a licensed massage therapist. Regardless, many massage therapists are able to find high demand for their services and make a strong income serving their clients.

9. Outpatient substance abuse management.

For people trying to overcome an addiction to drugs or alcohol, getting the right medications, counseling, and tools during their recovery period is crucial. For those who may want or need to do this outside of a residential recovery center, outpatient addiction and management recovery services are crucial. If you have training and specializations in mental health and substance abuse care, you could start such a business. This can be done from an office or even remotely. 

10. Medical supply courier services.

Medical supply courier services (sometimes called health logistics services) deliver medical equipment to homes, hospitals, and medical practices. Running a medical supply courier service requires that you know how to handle and safely transport medical equipment and supplies. In some states, starting a medical supply courier service will require that you have a pharmacy degree.

11. Drug testing business.

The U.S. Department of Transportation requires certain safety-sensitive employees to undergo drug testing. Moreover, many public and private companies require drug testing as part of their pre-employment and onboarding processes. In addition, drug testing may also be needed in certain legal cases. All of this points to a massive market for drug testing services and a potentially lucrative business idea for nurses (RNs and LPNs) and doctors. 

12. Infusion services

For patients who have been discharged from the hospital but still need medications to be infused into their bodies via an intravenous (IV) line while they recover at home, infusion service businesses are critical.

Infusion service companies are sometimes based in an office, where patients come in weekly or monthly to receive their medication. Others are run via a mobile infusion service that attends to people in their homes.

13. Medical apparel sales.

Whether it’s a pair of scrubs or a white coat or comfy shoes for medical professionals who stand and walk all day, medical professionals need their uniforms. You could manufacture your own scrubs or it is possible for you to wholesale and put your private label on medical apparel.

14. Medical waste handling.

When it comes to the handling of medical waste, like used syringes, needles, tubing, and soiled wound dressings, federal and state regulations abound. To stay on the right side of these regulations, hospitals and practices of every size need reliable medical waste management services, opening yet another potentially profitable business opportunity. 

15. Medical laundry services.

Besides handling medical waste, hospitals often need professional laundering services to take care of bedding, hospital gowns, and hospital-provided attire like surgical scrubs. Your medical laundry services business could meet this need and provide a solid income at the same time.

16. Assisted-living services.

Assisted-living services provide residential services to seniors. Seniors who live in an assisted living facility may do a lot for themselves, but still need help with daily living activities like bathing, grooming, and mobility. Assisted living services may also provide health-related services like nursing care and medication assistance.

17. Senior day care center.

Instead of opting for an assisted living community or senior community, more and more elders are choosing to age in place, living at home for the rest of their remaining years. Other seniors may also live with adult children or caregivers who have to go to work during the day.

To stay safe and to have people to socialize with during the day, these elders may opt to go to a senior daycare center, where they can receive professional care and assistance with their medications, as well as participate in social activities.

18. Medical transcription service.

Medical transcriptionists transcribe recordings made by doctors, nurses, and other medical workers into legible medical records, including notes from patient examinations and discharge reports. They might also review documents for errors, so that facilities can keep accurate records.

While some hospitals and medical practices may have their own in-house medical transcriptionists, there are other organizations that rely on external medical transcription services.

19. Legal nurse consulting.

Legal nurse consultants are registered nurses who have further training that allows them to be assets to attorneys and the legal system. For instance, when there is a malpractice, worker’s compensation, or personal injury lawsuit, attorneys may depend on a legal nurse consultant’s background in the healthcare system and medical science to help build their case. As a legal nurse consultant, you would operate independently. If you have extensive experience in a particular nursing field (e.g., oncology), starting your own legal nurse consultancy that serves that vertical can be a great business. 

20. Hydration therapy business.

This business can be similar to the infusion services idea mentioned above. But while infusion services often focus on delivering medication for health conditions, hydration therapy is a simple treatment that delivers fluids and electrolytes (and sometimes, medication), directly into a person’s bloodstream through an IV line.

In most states in the U.S., licensed healthcare professionals, including medical doctors, nurse practitioners, and nurses, can start a hydration therapy business.

21. In-home physical and occupational therapy services.

Your in-home physical therapy and occupational therapy business could help seniors, people with disabilities, or individuals recovering from an illness or accident. Like some of the private care businesses mentioned already, this kind of business allows patients to receive one-to-one care in the comfort of their homes.

22. Autism support services.

Autism support service businesses can provide personal or group support services to individuals on the autism spectrum. Autism support businesses may provide a host of services, including applied behavioral therapy, speech, and occupational therapy services.

23. Retail pharmacy store.

Don’t let big chain pharmacy stores intimidate you. If you have the proper education and licensing to be a pharmacist, you can still make money as an independent pharmacy store owner. 

24. Non-emergency medical transportation.

Non-emergency medical transportation (NEMT) services help patients get to their healthcare appointments on time. While the guidelines differ from state to state for starting your NEMT business, it is likely you will need basic training in CPR and first aid. If your NEMT business transports people who use wheelchairs, you might also need special training on how to securely transport these individuals.

Execute your healthcare business idea today.

While several of these businesses require you to have a specific healthcare degree in order to start, there are others on this list that don’t require degrees. And in almost each case, instead of reinventing the wheel, you will be starting a tried-and-tested business. 

Forty-one percent of healthcare businesses fail by their fifth year. There are various reasons why this may happen. But often, a lack of funding to support the business is one of those reasons. Learn how you could get the money you need to fund your healthcare practice or get the medical equipment you need to start today.

Sources:

https://www.grandviewresearch.com/industry-analysis/medical-billing-outsourcing-market

https://www.grandviewresearch.com/industry-analysis/us-primary-care-physicians-market

https://www.grandviewresearch.com/industry-analysis/home-healthcare-industry

https://www.futuremarketinsights.com/reports/massage-therapy-services-market

https://www.grandviewresearch.com/industry-analysis/us-transcription-market

https://www.starterstory.com/ideas/medical-billing-service-business/startup-costs

https://doctorly.org/cost-vs-reward-of-opening-a-medical-private-practice/

https://www.careacademy.com/blog/start-home-health-agency/

https://www.starterstory.com/ideas/massage-therapist/startup-costs

https://www.entrepreneur.com/businessideas/medical-transcriptions

https://www.starterstory.com/ideas/medical-equipment-sales-business/startup-costs

https://www.maximizemarketresearch.com/market-report/private-nursing-services-market/167107/

https://www.grandviewresearch.com/industry-analysis/us-home-infusion-therapy-market

https://www.grandviewresearch.com/industry-analysis/us-assisted-living-facility-market

https://www.starterstory.com/ideas/concierge-nurse-service/startup-costs

https://www.ivtherapyacademy.com/post/iv-therapy-start-up-costs-and-considerations

https://www.biospace.com/article/pharmacy-market-size-to-estimate-usd-1-522-1-bn-by-2030/

https://www.starterstory.com/ideas/medical-waste-management-and-recycling-business/startup-costs

If you’re in the process of starting a law firm, one of your main concerns is likely how much it will cost. There are many variables that factor into the actual cost to begin your own practice, not to mention how you will fund the whole endeavor. Some attorneys are able to create a firm on a shoestring budget. However, if you are planning on starting big, your initial costs may be more significant. 

Here are some things to consider when it comes to law firm start-up costs. 

How much does it cost to start a law firm? 

It’s impossible to pinpoint exactly how much it will cost you to hang a shingle. However, there are some ballpark considerations that can help you understand your initial budget. Some people are able to start a law firm with a couple thousand dollars. Others need $30,000 or more to begin practice. The exact amount you need depends on your overhead costs and the budget you decide on for items you will need. To determine this amount, consider the following.

Location 

Will you have a physical law office or a virtual workplace? If you, like many new attorneys, decide to work from home, you can easily rent a workspace or conference room when you need to meet with clients. On the other hand, having an office space may be important to you. Rent for a physical business location can range dramatically depending on where you are located. If you rent a traditional office space, you may pay $1,000 or more monthly, while renting conference space only when it is needed might cost $200 or less. 

Supplies and office equipment

Even if you opt to work from home, you will need certain supplies and office equipment. It’s important to have high-quality printers, scanners, phones, and copiers. For high-quality equipment leases expect to pay $1000/month. You will also need plenty of paper, stamps, pens, note pads, envelopes, and more. These items can add up. However, they shouldn’t amount to more than a couple of hundred dollars per month. 

Computer hardware and software

Computer hardware and software will be one of your highest costs when starting a law firm. You will need a quality laptop computer, as well as case management software and document and PDF processing software. These are generally one-time or annual costs, with hardware costing thousands of dollars and software hundreds. 

Most legal research databases and data storage in cloud services are subscription-based. You can lower your costs by joining the American Bar Association or your state bar association with free legal research databases. Data storage in cloud services like Dropbox are necessary to ensure your information is secure and you don’t lose valuable files if your hardware malfunctions. These overhead costs may amount to $100 per month or less.

Professional expenses and training

You will need to set aside a budget for professional expenses and training, including licenses, continuing education, conferences, and events. Most states charge companies to obtain a business license, and you will  have to pay to maintain your active status as an attorney with the state bar association. 

Continuing education is a requirement of all attorneys. While conferences and events are sometimes negotiable expenses, they should be heavily considered to maintain networking and positive appearance. These costs can amount to hundreds or thousands of dollars, depending on the details of the training and events. 

Insurance

All businesses need insurance, especially law firms. The types of insurance you need depend on the state you’re in, your practice areas, whether or not you have employees, and other factors. The cost of all these insurance types can vary also, but usually amount to $1,000 or less monthly total. 

At a minimum, you should have: 

• General liability insurance
• Property insurance
• Malpractice insurance
• Workers’ compensation insurance
• Cybersecurity Insurance

It’s best to consult with a professional business advisor in your state to ensure you get the right insurance for your new law firm. 

New law firm marketing

You will need to invest in marketing for your law firm. However, the amount you decide to put into building a website, social media, Google ads, and other advertising methods depends heavily on your goals. For example, if your target audience does not use social media often, then you can avoid spending money on developing a heavy Facebook presence. 

However, one thing you should not skimp on is the quality of your website. And you can achieve a professional site at a low cost or at significant expense. The choice is yours. Many low-cost template options allow you to build your own website. But if you really want to take advantage of SEO tools and rank at the top of Google, you may need to invest in a marketing agency. Many legal marketing agencies offer packages to new law firms for $2,000 to $5,000 monthly to create a website, juggle advertising, and track performance. 

Taxes

Every business must pay state and federal taxes. However, the amount you pay will depend on the type of business you form and your annual earnings. It will cost up to $1,000 to have a tax professional keep track of your revenue and expenses and help you complete and file your taxes when the time comes. 

Get the funds to start your own law firm

If you are ready to start your own law firm, you should consider all of the costs. Once you create a budget and know how much you need, complete a quick application on Lendio to receive and compare multiple law firm funding offers. Learn more about law firm financing options.

Many newly minted lawyers dream of one day hanging their own shingles. You may be ready to start your own law firm, but unsure of where to begin. Many lawyers, when they first start out, will work out of their home, use their personal cell phone and obtain liability insurance and a simple case management system. This post will explore the steps beyond that if your dream is to build and expand a practice. 

Create a business plan

How to create a law firm business plan

One of the first steps in starting a law firm is to create a business plan. This is a document that summarizes your goals and details about operations. It serves as a basis for creating the firm, as well as a roadmap for the future. 

Here are some key elements to include in a law firm business plan: 

• Executive summary stating what your company is
• Firm description
• Goals and a discussion of how your firm will be successful
• Market analysis
• Organization of members and management overview
• Services offered and practice areas
• Marketing strategy and sales goals
• Financial plan, including funding needs and fee structure
• Financial projections and start-up budget

Budget and financing

Creating a budget and financing a new law firm

Another essential part of starting any new business is figuring out the financial details. When you begin thinking about your new law firm, you need to have a solid understanding of how much it will cost to begin operations and how to get the money you need. 

Your initial budget should include everything from startup costs to necessary purchases of hardware and software, including personal computers and case management software. Long-term budgeting should consider: 

• Recurring subscriptions
• Annual bar dues
• Personal liability insurance premiums
• Law firm marketing costs
• Malpractice insurance premiums
• Workers’ compensation insurance costs
• Unemployment insurance costs
• Other expenses for employee benefits

It is possible to start a firm with less than $5,000 in the bank; however, these small businesses often need other financing options down the road. That’s where Lendio comes in. Lendio offers new law firms financing options with a single 15-minute application. 

Technology and services

Legal technology and services you may need

The legal industry utilizes a plethora of legal technology and tools that can help lawyers operate a successful practice. While many of these services are not required to practice law, they can make your operation much more efficient, saving time for your staff and money for your clients. 

Basic hardware new law firms need

You will need several pieces of hardware to communicate with other attorneys, clients, and courts. Some of the basic hardware you need include: 

• Computers (preferably laptops)
• Printers
• Scanners
• Phones

You can easily create a paperless law firm wherein you don’t need physical filing cabinets, but that will require additional software and data storage systems. 

Software new law firms need

There is an array of innovative software for law firms on the market. These programs benefit attorneys, staff, and clients by making work easier and helping everyone stay organized. Some important software you’ll want to consider for your new law firm include: 

• Legal practice management system (LPMS)/Case management software
• Word processing software (such as Microsoft Word or Google Docs)
• PDF readers and editing software (such as Adobe Acrobat)
• Interoffice communications (such as Slack or Google Hangouts)
• Email software (such as Google or Yahoo)
• Office calendaring software
• Client relationship management software (CRM)
• Data threat security tools (such as Webroot or Norton)

Data or cloud storage

You will need a place to store client documents and other firm information, so that it can be easily accessed by key stakeholders. The most convenient method is to utilize cloud storage through a service like Dropbox. 

This storage system can be customized to allow internal or external users to access, upload, and download documents, pictures, and other data. Since the storage is available online, you can have access to it from anywhere, whether you are in the office or about to head to court. 

Phone systems

All law firms need to have a phone system, so that clients can easily reach them. While you might be inclined to use your current phone, that will quickly become overwhelming when you gain dozens (or hundreds) of clients. As you’re practice grows it will be helptful to have a dedicated phone line solely for law firm use. 

You should also consider using a virtual receptionist who can answer the phones when you are unavailable. This will ensure your clients and potential clients always receive great customer service. 

Marketing

New law firm marketing

Legal marketing can feel overwhelming. There are a lot of moving parts, from creating a website to pay per click (PPC) advertising on Google and other platforms. While some firms spend tens of thousands on law firm marketing, that’s not necessary when you’re just beginning your firm. You should create a marketing plan that considers your clients’ needs and how you can meet them in the most efficient way possible. 

Branding your new law firm

Branding is one of the most essential parts of new law firm marketing. You want to use effective branding to connect with your clients and put your best foot forward. Develop a logo, slogan, and tone of voice that match your style. Your brand should be presented on everything that you create, from your website to your business cards. 

Creating a website 

Law firms need to have an online presence. However, it doesn’t have to cost five figures to create a website. If you have time, you can create your own website with templates available online. You may outsource content and SEO (search engine optimization) services to reduce costs and still get good copy. However, there are legal marketing agencies out there who will develop law firm websites for reasonable prices. 

Other considerations for running a new law firm

In addition to starting your new law firm, you will have to run it on a day-to-day basis. To do this, you should consider: 

• Organizational charts, including accountabilities of staff
• Hiring and staffing considerations
• Outsourcing whenever possible
• Coaching and mentorship to achieve goals

Get your new law firm started with Lendio

Lendio offers many financing options for new law firms. We want to see you succeed. Learn more about funding options for law firms from Lendio. 

Starting a new business but not sure what you’ll need to do to help it succeed? Your local business development agency can offer invaluable expertise on everything from registration, planning, marketing, and more. 

Small business development agencies cater to both new and existing businesses alike, providing critical resources to help entrepreneurs launch, grow, or even retire their ventures. 

Ready to learn how to set up a small business or expand your company? Here’s everything you need to know about small business development agencies. 

What is a small business development agency?

A small business development agency offers a number of resources, typically in the form of free counseling and low-cost training programs, to help businesses startup or expand. [1] 

Many small business development agencies collaborate with seasoned[2]  business experts, providing one-on-one professional counseling, advising, and training to existing ventures and startups. Topics are wide-ranging and typically related to an entrepreneur's specific needs, such as funding, technology development, management, strategy, financial analysis, export assistance, market research, sales, and much more. 

Small business development agencies can also offer networking opportunities to collaborate with other local business and government leaders. Many of the services provided by small business development agencies are free of charge, although some training programs or workshops can feature a small fee. [3] 

The goal of these agencies is to help small businesses grow, improve productivity, foster innovation, and help empower local economies and generate job creation making them a priority for state and local governments. [4] 

The most renowned types of small business development agencies are Small Business Development Centers (SBDC), which[5] are typically hosted by local universities and funded by Congress through a partnership with the Small Business Administration (SBA). Most states have several SBDCs in major economic and urban areas. Some local governments also maintain their respective small business development agencies to service regional needs. [6] 

What’s the difference between small business development agencies and industry support groups?

It’s important to distinguish between small business development agencies and industry support groups. While the latter focuses more on the needs of specific industries, the former is geared towards a broader range of sectors. [7] 

Industry support groups are also mostly made up of existing businesses[8] , while small business development agencies cater to both existing ventures and startups alike. Both offer significant opportunities to small businesses and can be a powerful complement to one another.[9] 

How to find a small business development agency

You can find SBA-backed SBDCs by entering your zip code through the SBA’s interactive map for local assistance. You can also find regional small business development agencies through your state’s Chamber of Commerce or local government office. 

For a comprehensive look at state-by-state small business development agencies, use the following list as your guide. 

Small business development agencies state-by-state 

Almost all states have SBDCs that maintain multiple locations throughout a state and typically partner with local universities. There may also be a number of localized small business development agencies depending on your state and city. 

Alabama

Alabama Small Business Development Center (ASBDC): They provide one-on-one business advising and educational training for growing small businesses and startups. And they offer opportunities to secure financing and help along the way. Also, advisors can analyze your progress and create plans to further the business.

Atlas Alabama: Access free online resources for entrepreneurs and small business owners to find available state and local resources.

Alabama Small Business Administration( SBA): SBA offers assistance in launching new businesses, and managing and growing existing ones, and they help small business owners pursue and improve their business style and skills. 

National Federation of Independent Business: A member-driven organization that advocates for small businesses.

Alabama Small Business Resources: They make networking opportunities available for small businesses and help business owners get licensed in all 67 Alabama counties.

Alaska 

Alaska Small Business Development Center (ASBDC): They offer no-cost, one-on-one business coaching, workshops, and tools to grow or start a business, funding assistance and pre-launch coaching.

Small Business Assistance Center:They offer free business counseling, and they provide training and resources to grow for-profit and non-profit businesses.  

Arizona

Arizona Small Business Development Center (AZSBDC): Get business counseling, workshops, and training to grow or start a business. As well, you can get robust business analytics and help with future-planning.

National Small Business Association: Find networking opportunities, small business services, and special services for entrepreneurial retirees.

Arizona Small Business Administration: They provide funding, counseling, certifications, and networking opportunities to small businesses.

NFIB: Advocates for small business owners and providers of resources for budding entrepreneurs who want to learn more about sustaining a small business.

Arkansas

Arkansas Small Business and Technology Development Center (ASBTDC): They offer advisory services, training, events, market research, and data for business owners. And they offer one-on-one consulting.

Arkansas Small Business Administration (SBA): They offer counseling, certifications, connections, and disaster recovery to small business owners.

Arkansas Division of Emergency Management: Apply for small business disaster relief grants and loans.

Small Business Resources: A wealth of internal and external resources for small business owners.

Arkansas Business Navigator: Owners of start-ups can register for free business consultations.

California

California Small Business Development Center (CSBDC): The CSBDC offers businesses access to funding, human resources, marketing tools, e-commerce opportunities, accounting services, and many other business needs. They operate an extensive network of 45 small business service centers throughout the state. 

Small Business Development Corporation of Orange County (SBDC-OC): They help small businesses access capital to grow and they bring economic development for underserved communities in California.

The South Bay Entrepreneurial Center (SBEC): They provide business mentorship, educational resources, and commercialization consultations for university-developed technologies. They also offer jobs, funding, workshops, and the option to become a mentor or mentee.

California Manufacturing Technology Consultants (CMTC): A non-profit that offers consulting services to small and mid-size manufacturers in Southern California. Services include advice on how to increase sales, reduce costs, improve quality, workforce training, and more.

South Bay Workforce Investment Board (SBWIB): They offer specialized services to assist local companies to meet hiring goals, lower training costs, improve employee skill levels, strengthen retention rates, turnover rates, and more. They also help business owners succeed at job fairs.

Los Angeles Score: Score offers business advice, small business workshops, and numerous resources to help entrepreneurs start or grow a business.

Colorado

Colorado Small Business Development Center Network: They offer resources for small businesses, non-profits, freelancers, and independent contractors.

El Paso County Located in Colorado Springs, this organization offers business training to help new and existing businesses grow, including free one-on-one consulting and networking events.

Association of Women’s Business Centers: They provide women with entrepreneurial opportunities, training, and mentoring.

Operation Hope: Free coaching for Black business owners.

Connecticut

Connecticut Small Business Development Center: No-cost advisory and analytics services to help businesses access capital.

Connecticut Small Business Administration (SBA): Counseling, certifications, connections, and disaster recovery to small businesses. 

Chamber of Commerce: Free advice to business owners and networking events to grow Connecticut’s small business community and celebrate diversity. 

Connecticut Women’s Small Business Administration (WSBA): Opportunities for female entrepreneurs to grow their businesses.

Delaware

Delaware Small Business Development Center: No-cost advice and analytics for small businesses.

Delaware Division of Small Business: Over 300 programs for small business owners.

Delaware Area Chamber of Commerce: Support for small business owners in areas of market research, strategy, development, and future planning.

Delaware SBA: Counseling, certifications, connections, and disaster recovery for small businesses.

Florida

Florida Small Business Development Center: They offer resources and tools across all stages of business development to help entrepreneurs pursue their dreams.

Florida Business Development Corporation (FBDC): FBCD helps businesses secure SBA 504 loans for purchasing significant fixed assets, debt refinancing, and more.

Florida Small Business Administration (SBA): Find counseling, certifications, connections, and disaster recovery assistance to small businesses. 

Entrepreneurial Learning Initiative (ELI): This program educates and trains small business owners, academic, corporate, government, and nonprofit clients all over the world.

National Entrepreneur Center: NEC has offered one-on-one counseling and seminars to over 220,000 small business owners.

Georgia

University of Georgia Small Business Development Center: They support entrepreneurs by offering educational services and resources across 18 locations statewide.

National Association of Small Business Services: They focus on helping business owners open, grow, and manage their businesses with a unique hands-on approach.

Georgia State University - Atlanta Office: They offer free training programs as well as one-on-one coaching, workbooks, and other resources for startups and other small businesses.

GA State African American Chamber of Commerce: The main focus is on helping Black business owners to succeed in their small businesses.

City of Atlanta Local Business Support: They provide resources to train entrepreneurs to start or expand their businesses.

Georgia Minority Business Development Agency: The center for minority business owners.

Hawaii

Hawaiʻi Small Business Development Center: They offer business advisory, workshops, events, and market research to both budding and seasoned entrepreneurs alike.

Hawaii State Trade Expansion Program (HiSTEP): They help small businesses in Hawaii create an exporting strategy or expand their export development.

The Minority Business Development Agency (MBDA): MDBA offers access to market analysis tools, funding opportunities, business certifications, procurement guidance, and more for minority business enterprises (MBEs). 

Hawaii Small Business Administration (SBA): They provide counseling, certifications, connections and disaster recovery to small businesses.

Women's Business Center: They aid women to help start and expand their businesses.

Idaho

Idaho Small Business Development Center: They offer no-cost professional business counseling, and business resources, as well as specialized services on cybersecurity, environmental solutions, exporting, and government contracting. 

Research and Business Development Center: A place for entrepreneurial undergraduate students to get experience and build useful skills in the future.

Illinois

Illinois Small Business Development Center: They offer no cost, one-on-one business advising services as well as events, workshops, and other resources to help small businesses network and grow. 

Score Chicago: Score connects small business owners throughout Cook County with experienced entrepreneurs, corporate managers, and executives for no-cost business advising and mentorship. 

McHenry College: A grant-funded program that helps growing small businesses and offers free one-on-one counseling, monthly workshop courses, and resources for funding.

Indiana

Indiana Small Business Development Center (ISBDC): They offer no-cost business advising, training, referrals, and resources to businesses within every stage of their journey from startup to retirement.

One Southern Indiana: They provide resources to connect with other businesses and build community. OSI offers job opportunities, advertising, sponsorship, and other resources. 

Madison Chamber of Commerce: They offer support and resources to grow small businesses, non-profit organizations, individuals, and civic groups. 

Iowa

Iowa Small Business Development Center: They provide no-cost business advice and resources for growing and budding businesses.

Iowa Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses. 

Iowa Non-profit Resource Center: They offer free resources to help small business owners expand their business through training and connecting with other entrepreneurs. 

DSM USA: They provide free resources to start-ups and small businesses through research, and partnerships with local, state, and national entities.

Kansas

Kansas Small Business Development Center: They offer no-cost business training and a host of services for businesses at every stage of development to retirement.

Cue Impacto HEDC: They offer funds to immigrant and/or Latino-owned businesses to help them overcome challenges they may face. 

PBA Builds: By implementing strategic initiatives to help small businesses at no cost, PBA Builds provides technical assistance to businesses through a consortium of partners, business development professionals, and experts.

Kansas Small Business Administration: They offer counseling, certifications, connections, and disaster recovery to small businesses. SBA provides assistance in launching new businesses, and managing and growing existing ones. 

Kentucky

Kentucky Small Business Development Center: They offer no-cost business coaching, planning tools, resources, and training to entrepreneurs. 

Kentucky Small Business Development Center: They offer free one-on-one consulting, and business management training, reference information, and research.

Kentucky Small Business Administration They offer counseling, certifications, connections, and disaster recovery to small businesses.

Greater Louisville Inc.: GLI helps to grow your business by providing connections, networking opportunities, and business knowledge to get ahead of competitors. 

Louisiana

Louisiana Small Business Development Center (LSBDC): By providing low to no-cost consultations, resources, and networking opportunities to new and growing businesses. 

Southeastern Louisiana University: By offering consultations, SLU assists in securing loans and funding, creates jobs and provides training to businesses.

Louisiana Small Business Administration (SBA): They offer counseling, certifications, connections, and disaster recovery to small businesses.

Maine

Maine Business Development Center: They offer free small business advising for entrepreneurs on a wide range of topics including business planning, credit and financing, marketing, management, financial analysis, and more. 

Maine Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses.

Coastal Enterprises, Inc.: CEI provides financing for a variety of purposes, including working capital, equipment purchases, facilities expansion, and construction. They also specialize in financing mixed-use and affordable housing real estate development.

Mainstream Finance: They help with business plans and offer technical assistance for starting a business, business strategy, new product launches,marketing, finances, and other business issues.

Maryland

Maryland Small Business Development Center: They provide low to no-cost professional training services, free one-on-one business counseling, and assistance for accessing business funding. 

Maryland Business Express: They provide a host of resources and a directory for information on how to start, plan, manage, and grow your business. 

Calvert County Maryland: They provide a number of resources to support the growth and development of county businesses, including online listings and reports, confidential counseling, marketing assistance, and educational seminars. Look for their yearly state of the economy report.

Women's Net: They help women start and expand their businesses.

Massachusetts

Massachusetts Small Business Development Center: Find free business advice, low-cost educational programs, and other resources to entrepreneurs.

Massachusetts Office of Business Development (MOBD): They assist businesses relocating to Massachusetts and help growing businesses apply for funding and foster community development. 

MassDevelopment: They offer financing and real estate solutions for nonprofits and businesses across the state.

Massachusetts Alliance for Economic Development (MassEcon): They offer business development assistance through site finding, research, programming, and education.

Score Boston: They provide free counseling and mentoring to entrepreneurs starting or building a business in the greater Boston area through mentorship and workshops.

The New England Business Association: They provide businesses with access to exclusive-rate capital via a preferred vendor program, as well as networking opportunities. 

Center for Women & Enterprise: A nonprofit organization dedicated to helping people start and grow their businesses. 

Massachusetts Association of Community Development Corporations (MACDC): They provide training, technical assistance resources, and access to capital for small businesses located in inner-city and rural areas, as well as traditionally disadvantaged communities.

Entrepreneurship For All (EforAll): They foster entrepreneurial growth in mid-sized cities through pitch competitions, mentorship programs, business advice, and networking opportunities. 

Michigan

Michigan Small Business Development Center: They offer free counseling services for small businesses throughout the state.

Michigan Economic Development Corporation (MEDC): They provide small business assistance and resources.

Michigan Veteran Entrepreneur-Lab: A free three-month entrepreneurship for veterans or military spouses through funding, learning, and support.

PTAC: They offer training programs to small businesses including counseling, assistance with government registration, bid matching, and more.

Minnesota

Minnesota Small Business Development Center: They offer no-cost, customized consulting to businesses at all stages of the life cycle. 

Minnesota Small Business Assistance Office: They present individualized consultation services along with business guidebooks to ensure entrepreneurs have the information they need to succeed. 

Grant Watch: A resource to find grants offered to businesses in Minnesota from government agencies, foundations, and other organizations.

Mississippi

Mississippi Small Business Development Center: They offer one-on-one business counseling, training events, funding assistance, and more.

Mississippi Grant Watch: A resource to find  grants offered to businesses in Minnesota from government agencies, foundations, and other organizations.

Higher Purpose: Higher purpose offers to help Black business owners grow their new or existing businesses.

Alcorn: Women entrepreneurs and small business owners can find training, counseling, and access to capital.

Missouri

Missouri Small Business Development Center: They offer personalized services, knowledge, and resources to help businesses grow. 

Missouri Small Business Administration (SBA): They provide counseling, certifications, connections and disaster recovery to small businesses. 

Community Foundation of Central Missouri: Providing funds to women and business owners of color.

Kansas City G.I.F.T: Funds and training for Black business owners to help them expand their businesses and face unique challenges. 

Montana

Montana Small Business Development Center: They offer business development tools, guidance, and resources.

Bozeman Area Chamber of Commerce: Local, state, and national resources for businesses of all sizes.

Women's Net: Aid for women to help start and expand their businesses at no cost.

Nebraska

Nebraska Small Business Development Center: They offer a number of programs to help small businesses grow and access much-needed resources on a local, national, and regional level.

Nebraska Business Development Center (NBDC): They offer management and technical assistance to businesses in Nebraska — and especially to women-owned businesses.

Nebraska Small Business Administration: They offer counseling, certifications, connections, and disaster recovery to small businesses. 

Nevada

Nevada Small Business Development Center: They provide advisory services, educational resources, training programs, and assistance for businesses and start-ups. 

Northern Nevada Score: They provide free and confidential mentoring to entrepreneurs starting or growing an existing business.

Nevada SBA: They offer counseling, certifications, connections, and disaster recovery to small businesses. 

New Hampshire

New Hampshire Small Business Development Center: They offer business advisory services at no charge and a number of programs to help businesses prosper.

New Hampshire SBA: They offer counseling, certifications, connections, and disaster recovery to small businesses. 

Community Navigator: Critical resources for small businesses in their early stages that are run by women and other disadvantaged people.

New Jersey

New Jersey Small Business Development Center: They offer one-on-one counseling, training programs, networking events, and more to propel new and established businesses. Advisors also use analytics of your progress and create plans to further the business.

New Jersey Business Action Center: They offer free small business consulting as well as networking opportunities to connect with government leaders and fellow entrepreneurs. This includes mentoring, financial assistance, licensing, certification, and more.

New Jersey Community Capital: A resource for minority entrepreneurs and business owners.

New Mexico

New Mexico Small Business Development Center (NMSBDC): They offer no-cost counseling as well as assistance with small business matters.

New Mexico SBA: They provide counseling, certifications, connections, and disaster recovery to small businesses. 

Accion Opportunity Fund: They financially support and advance small businesses run by minority groups.

WESST: They provide entrepreneurs with resources, skills, and technical assistance to elevate their business through podcasts, workshops, and training programs.

New York

New York Small Business Development Center (NYSBDC): They offer free business advisory services in a number of different languages along with free and low-cost training programs, as well as other resources. 

NYC Department of Small Business Services (SBS): SBS connects entrepreneurs to free resources throughout NYC. They also offer advisory services on government regulations. 

SCORE: They provide mentoring to entrepreneurs starting or growing their existing businesses at no cost by offering connections to other entrepreneurs. 

NY Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses. 

North Carolina

The Small Business and Technology Development Center (SBTDC): They help small businesses start and grow by offering advisory services and counseling, educational services and tools needed to build and grow.

Carolina Small Business Development Fund: A non-profit providing small business loans, training, and research to support entrepreneurs through research programs, emergency funds, and other resources.

Small Business Center Network: They provide business counseling, training resources, and more to help entrepreneurs launch and grow their companies. 

North Dakota

North Dakota Small Business Development Center: They serve both startups and existing businesses with advising services, training programs, resources for succession planning, and more. 

North Dakota Small Business Development Center: They offer consulting to small businesses with no cost with lists of events, news, and updates.

Ohio

Ohio Small Business Development Center: They provide a number of counseling services in areas of financial analysis, strategy development, market feasibility, and more to help businesses start and grow. 

Miami Valley Small Business Development Service: A confidential and free counseling service for small and medium-sized businesses. By coaching through goal setting, employee management, business planning, and more, they help small businesses.

Ohio Small Business Development Center at Kent Start Stark (OSBDC):This is a low-cost program for new and established small businesses. Services include orientations, one-on-one counseling, workshops, and more.

Oklahoma

Oklahoma Small Business Development Center: They offer no-cost, confidential business advisory services, as well as workshops and technical assistance. 

Oklahoma Small Business Administration (SBA):They offer counseling, certifications, connections, and disaster recovery to small businesses. 

Oregon

Oregon Small Business Development Center: They deliver business advising, classes, and access to resources small businesses need to start and grow. 

Small Business Development Center: They provide expert advice with no cost to small businesses. Services include bookkeeping, business plans, finances, sales, marketing, social media and more.

Lane Small Business Development Center (LSBDC): They offer free professional business advice for Lane County residents with small businesses. Some services include courses, confidential one-on-one counseling and submitting questions to a team.

Pennsylvania

Pennsylvania Small Business Development Center: They provide no-cost consulting services and educational programs for small business owners and entrepreneurs.

Business One-Stop Shop: They offer a host of resources to startups, growing businesses, and companies looking to move to Pennsylvania. Resources include information on writing business plans, naming a business, registration, basic overviews, and more. 

Entrepreneur Works: They provide low-cost loans to businesses as well as training, workshops, coaching, and more throughout Philadelphia and Chester. 

Women’s Business Enterprise Center: They offer resources to help female entrepreneurs launch and grow their businesses. 

Score Philadelphia: Score grants free business advising services as well as mentoring and networking opportunities for entrepreneurs through workshops and provided specifically for black-owned businesses.

Rhode Island

Rhode Island Small Business Development Center: They offer free to low-cost seminars and training workshops to help businesses start and grow. They also provide information on starting a business, training webinars, and more.

Rhode Island Small Business Administration (SBA):They offer counseling, certifications, connections and disaster recovery to small businesses. 

Rhode Island Small Business Development Center: They offer no-cost professional business counseling, and business resources, as well as specialized services on cybersecurity, environmental solutions, exporting, and government contracting. 

South Carolina

South Carolina Small Business Development Center: They present individualized, confidential, and free business consulting for entrepreneurs alongside other critical resources. 

South Carolina Small Business Administration (SBA): They offer counseling, certifications, connections, and disaster recovery to small businesses. 

Shop HERE:They offer free training to start and develop a small business with services including online support, free domain registration, one-on-one coaching, and more.

South Dakota

South Dakota Small Business Development Center: SDSBDC hosts a number of programs and resources to help with starting and growing a business. 

South Dakota Small Business Development Center: They offer free consulting to new and existing businesses by providing research, case studies, resources, programs, and more.

South Dakota Small Business Development Center:They assist existing businesses to stay up to date with competitors. Services include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

Tennessee

Tennessee Small Business Development Center: They provide free and confidential one-on-one counseling for startups and existing businesses. Services include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

Tennessee Small Business Development Center (TSBDC): They offer free and lost cost options to grow small businesses and help them network, with 400 clients served, and 300 trained.

Tennessee Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses. 

Texas

Texas Small Business Development Center: They operate 60 centers throughout the state offering free and low-cost resources helping businesses start and grow. Services include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

The Dallas Entrepreneur Center (The DEC): They help entrepreneurs and freelancers in North Texas start, build, and grow their businesses. The free membership program offers mentoring and networking opportunities.

Score Dallas: They offer one-on-one mentorship with leading business experts, networking opportunities, workshops, and more throughout Dallas.

Utah

Utah Small Business Development Center: They offer free one-on-one counseling and management resources to start, grow, and improve local businesses. Services include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

The Utah Innovation Center: The catalyst for technology innovation in the State of Utah.

Center for Rural Development: Works with Utah’s rural counties, communities, and businesses, providing economic development resources. The Center is the home of the Rural Opportunity Program and assists with other programs to help local governments and businesses grow and prosper.

Vermont

Vermont Small Business Development Center: They offer business advising and critical resources for new and growing businesses.

Vermont Small Business Development Center: They offer free business counseling to new and existing small businesses. Services include advice on export, digital strategy, funding, hiring, training, and more.

Vermont Small Business Administration (SBA): They offer counseling, certifications, connections, and disaster recovery to small businesses.

Virginia

Virginia Small Business Development Center: They provide no-cost individualized advising to both startups and established businesses.

Virginia Department of Small Business and Supplier Diversity: They provide educational resources and to help businesses grow and access capital. 

Virginia Small Business Administration (SBA): They provide counseling, certifications, connections and disaster recovery to small businesses. 

Washington

Washington State Small Business Development Center: They offer advising services, training, applied research, and more to local businesses. Services also include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

Washington Minority Business Development Center: They provide technical assistance and business consulting to established minority-owned businesses throughout Washington state.

American Small Business Chamber of Commerce:They provide contractors, news, resources and opportunities for small business owners to grow and sustain their business.

U.S Chamber of Commerce: They are working towards policies and regulations that benefit small businesses in America to strengthen the economy. 

West Virginia

West Virginia Small Business Development Center: They offer one-on-one business coaching as well as no-cost technical assistance to new and growing businesses. Services also include free consultations, training, business planning, marketing, technology development, regulatory compliance, and more.

Small Business Development Center: They offer no-cost business coaching, workshops, and resources including developing a business plan, marketing, hiring, training, bookkeeping, and more.

West Virginia Small Business Administration (SBA): They offer counseling, certifications, connections, and disaster recovery to small businesses. 

Wisconsin

Wisconsin Small Business Development Center: They provide consulting and business education services to help entrepreneurs start, manage, and grow their businesses. 

Women’s Net: They offer grants for women who own small businesses.

Grant Finder: They provide a list of various kinds of grants that are offered to business owners, old and new.

Wisconsin Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses. 

Wyoming

Wyoming Small Business Development Center: They connect expert small business advisors with entrepreneurs for no-cost, confidential assistance. They also provide classes, training programs, the ability to view pre-recorded webinars, and more.

Wyoming Business Council: They offer resources to help businesses start, grow, and obtain financing. They also provide leadership, policy, and investment information.

Wyoming Small Business Administration (SBA): They provide counseling, certifications, connections, and disaster recovery to small businesses. 

Grant Finder:They provide a list of various kinds of grants that are offered to business owners, old and new.

In addition to being a great source of extra income, a side hustle makes an excellent stepping stone to running your own full-time gig. Still, even though this freelance gig or contract work may just be a part-time job, you can protect yourself from some costly legal mistakes by first ensuring your enterprise is compliant.

So, what does “compliance” mean for a side-hustle? 

States and municipalities require that all small businesses — no matter their size — abide by specific laws and regulations. Yes, even a side hustle selling homemade soaps or jewelry needs to abide by laws. Failure to follow local rules and regulations can lead to fines or loss of privileges.

Why Business Compliance Is Vital for Your Side Hustle

Business compliance allows state and federal governments to maintain a sense of order. It’s intended to protect you, your business, and your customers. Most compliance involves filing and retaining paperwork, although there are some exceptions. To simplify the compliance process, you can break compliance down into 2 categories: external requirements and internal requirements. 

External requirements include everything from filing and paying federal and state taxes to completing necessary paperwork. This is the category of requirements that most business owners are likely to remember because the consequences are more direct and familiar — think late filing fees or penalties.

Internal requirements can be a bit trickier. These include documents and records that you may be required to keep on file at your place of business, like copies of information sent to the federal and state government. You’ll need this information on hand if you ever decide to sell your business or apply for funding or loans. 

Incidentally, good recordkeeping — of both internal and external requirements — will keep you safe with the government and safeguard you in case anyone decides to take legal action against your business. 

Compliance documents do one more thing, too: they show you’re acting according to federal and state laws and following industry standards, which adds legitimacy to any organization.

Tips for Keeping Your Side Hustle Compliant

Keeping your side hustle compliant gives you the peace of mind of knowing you’ve satisfied all requirements so you can run your enterprise with confidence. While compliance requirements vary from state to state and business structure, there are some universal requirements you can expect.

Employer Identification Number (EIN)

Are you operating your side hustle as an LLC or corporation? Then you must have an EIN, which you can obtain from the IRS. If you went down a different road and chose to operate as a sole proprietorship, you can choose between using an EIN or your social security number. 

Business License

No matter where you run your side hustle, most municipalities require that you have a license to practice business, whether in your city, county, or state. This holds true for sole proprietors, too. Business licenses generally need to be renewed yearly or semi-annually.

Franchise Taxes

If you run an LLC, corporation, or, in some cases, a sole proprietorship, you may need to pay a franchise fee or franchise taxes — even if your business isn’t actually a franchise (the term “franchise” has multiple connotations and/or meanings). This varies by state and is generally only required when you sell physical items.

Federal Taxes

As the saying goes, the only things certain in life are death and taxes. All businesses are required to pay federal taxes, including income and employer taxes. If you’re just starting your business, you may want to discuss your operating plans with a small business tax advisor or CPA.

Annual Report or Biennial Statement

If you operate as an LLC or corporation, most states require that you check in once a year or every two years. Luckily, the state should let you know when your annual or biennial reporting is due. Check the date carefully: the due date of your report/statement could be the anniversary of when you formed your business or it could be another date entirely.

When you file for the first time, you need to submit an initial report after you’ve incorporated as an LLC or corporation. There will generally be a deadline date for filing this first report, too.

Report or Statement Filing Fees

Biennial statements and annual reports also usually require paying mandatory filing fees.

Articles of Amendment

Making changes to your company, such as changing its name, adding officers, or updating its address? You’ll need to report these changes in your company’s articles of amendment and abide by any state requirements for notification, voting, and filing.

Certificate of Good Standing

Once you ensure that your side hustle possesses all of the required documents to run a business, consider obtaining what is known as a Certificate of Good Standing. This document verifies that your company is in full compliance with local and state laws and regulations. The certificate may be required when you open banking accounts, apply for financing and licenses, and executive contracts. You’ll also need a Certificate of Good Standing if you decide to sell your business.

Certificates of Good Standing contain your company’s official name, including any DBA. The document confirms that you are authorized to conduct business in your area by verifying that your company is current on fees and taxes and that you have filed all necessary reports.

LLC and Corporations — Special Requirements

Running a corporation means tracking additional compliance requirements including shareholder and director meetings and maintaining written meeting minutes. In general, corporations require complex management practices that might not be ideal for entrepreneurs taking their first steps with a side hustle. 

Deadlines for Filing Certifications, Permits, and Licenses

It’s essential to keep current on any certifications, permits, and licenses that apply to your business. It’s advisable to check with your local government for applicable deadlines and add them to your calendar so you don’t miss a deadline. When you do, it usually means more work and possible fines.

What If Your Business Isn’t in Good Standing?

If your side hustle isn’t in good standing, you’re looking at several negative consequences. You could be responsible for fines, late fees, and other penalties. Worst yet, you could find it difficult, if not impossible, to open bank accounts, apply for licenses, secure financing, and execute contracts. If that wasn’t enough, lenders are unlikely to finance companies not in good standing.

Taking Your Side Hustle Full Time

At some point, you might find it’s time to make your side hustle a full-time gig. If you’ve been working your side hustle as a sole proprietor and want to make it your full-time job, now may be the time to apply for an LLC. It is also an excellent time to open a business banking account if you’ve been using your personal account, which will help separate your business and personal finances, too.

If you take this step, don’t risk administrative dissolution by being noncompliant. Dissolution will leave you personally exposed to company liabilities. The best way to prevent this is to address compliance issues ASAP. Plus, this will ensure your company is in good standing and lets you focus on running your incredible business.

_{The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.}

When it comes to construction projects, contractors usually eat what they kill. This means that if you get out there and actively bid on projects, you’ll keep your crew busy and your business thriving. Take a conservative approach to the bidding game, however, and your business will likely starve. There simply aren’t many projects that just fall into your lap.

At its core, a construction bid is a proposal. You’re telling a potential client what you can do for them and how much it will ultimately cost. Because your bid will include your expenses and profit, it differs from a simple estimate, which usually just accounts for the costs of the job.

“In some cases, the only thing that matters in the construction bidding process is presenting the lowest price to the owner; in other cases, the contractor’s qualifications are just as important—if not more important—than having the lowest dollar amount,” explains engineering and construction expert Juan Rodriguez. “Knowing how to bid construction jobs can make the difference between success and bankruptcy for a construction contractor. If a contractor does not know how to bid on construction jobs, they will have no chance of turning a profit.”

This bid is where a delicate balance comes into play. Cost matters to all clients, so you’ll want to submit one of the (if not the) lowest bids for any given project. At the same time, you need to protect your interests and ensure you’ll earn a solid profit. Neglect either side of the coin and your business will inevitably suffer.

Here is the typical lifecycle of a construction bid:

Making Your Construction Bid Truly Shine

Following the steps listed above will get you through a potential client’s front door. But your competitors are all using a similar approach. You’ll need to ensure that accuracy and efficiency shine through every aspect of your bid, helping it rise above the pack. While cost may be king, it’s certainly not the only consideration.

“Putting together a winning bid proposal, or even a competitive one, takes knowledge and skill,” says a construction bidding guide from iSqFt. “It’s a bit more complicated than just putting some numbers together and hoping for the best. Good bid preparation for general contractors requires a lot of time and effort and involves everything from reading and fully understanding the plans and specifications to accurately estimating costs for labor, materials, and equipment. Making even the smallest mistake can mean the difference between submitting a winning bid and missing out on a coveted and profitable project.”

One of the big mistakes contractors make is failing to be judicious in their bidding. It can be tempting to seek out all kinds of projects, but this approach is like shooting a shotgun from your hip and hoping to hit a bull’s-eye 50 yards away. Only bid on projects that match up with your strengths, so you can correctly estimate costs and immediately put your talents to work if you’re able to land the project.

In the grand scheme of things, winning a job you’re not equipped for is worse than not getting that job in the first place. It puts your crew in a bad position, and you’ll struggle to control your internal costs, risking your reputation in the process.

For this reason, never worry about walking away from a bid. If your due diligence reveals that you aren’t set up to succeed on the project or your profits may be compromised, respectfully thank the client for their time and move on. A bad bid match is bad business for everyone involved.

How to Bid a Job

Here are some additional tips for improving chances for success with construction bids:

• Follow the bid instructions studiously
• Properly account for all your overhead costs
• Only work with subcontractors who are skilled and reliable
• Ask the client for clarification whenever necessary
• Keep your information organized
• Provide every detail necessary to state your case
• Include testimonials from happy customer
• Share relevant awards and certifications
• Track your bidding results so you can improve your process

If all these considerations seem overwhelming, take heart in the fact that construction bid estimation software can shoulder much of the burden. The technology has improved dramatically in recent years and makes the entire process faster and easier. For this reason, it has grown in popularity among contractors of all stripes.

“This software was introduced over 2 decades ago and has had a major impact on the industry by making once difficult aspects of the process much faster and more efficient,” says Rodriguez. “But perhaps the biggest benefit of estimating software is the way it automates job costing. The software typically comes with a database of construction costs that are updated monthly by subscription. Builders can also keep their own database for job costing so that the software more accurately reflects local costs and price fluctuations in the market.”

By letting software complement your efforts, you’ll be able to prepare bids that align with the requirements, tout your company’s differentials, precisely capture costs, ensure profit, and stand out from the competition.

Consider Bidding on Government Projects

One of the best places for any small business to look for bidding opportunities is with government construction. Whether it’s a school, office, utility building, transportation center, or something else entirely, there are always government projects going on.

Government jobs can be particularly nice when the economy is dragging. Other jobs may dry up, but the government will always carry out designated projects. Some projects are even initiated with the specific goal of stimulating the economy.

“Each year, the government awards hundreds of billions of dollars in federal contracts to businesses to meet the needs of federal agencies and the military,” explains USA.gov. “The government’s goal is to award at least 23% of those contracts to small businesses. To sell your products or services to the federal government, your business must meet specific requirements. Although the contracting process can seem complicated and overwhelming at first, the government provides lots of information and tips to help you learn to compete as a federal contractor.”

So how does the government make decisions for bids? The process is much more heavily regulated than with non-government jobs. Mountains of paperwork are often required, so it’s important to allocate enough time to do everything correctly. Fail to attach the correct documents or provide all the necessary details, and your bid will be dead in the water.

It’s important to note that while these projects all fall under the government umbrella, they are administered by various agencies and organizations. So don’t assume the details will be the same across all government jobs.

Finding government projects to bid on isn’t too difficult. Start by visiting SAM.gov. The federal government created this free resource as a hub for contract opportunities. As the website states, “Anyone interested in doing business with the government can use this system to research active opportunities.”

The projects found on SAM.gov are all worth at least $25,000. You can use the convenient search tool to find projects based on keyword, solicitation ID, or individual federal organizations. Numerous filters will help you sharpen your search and locate the most relevant opportunities.

Once you find a potential project, simply click on the link to access scope documents. You will also find instructions for bid submissions and the deadline to take action.

Another free resource worth investigating is America’s Business Network, which is a portal curated by the North America Procurement Council. You’ll find all manner of bids, RFQs, and RFPs put out by government agencies or private organizations. You can search by state, date, or project details, though the functionality isn’t nearly as sleek as what you’ll enjoy on SAM.gov.

Plenty of other websites will connect you with bid opportunities for a fee. These paid resources often specialize in certain types of construction projects, potentially helping you sharpen your search and find bid targets faster.

Here are 6 resources that could be worth checking out:

1. Government Contracts and Bids: Using this website is as much about analysis as it is searching. With robust reporting and tracking, it helps you maximize your time and find the most profitable projects.
2. Onvia.com: While there are thousands of government projects listed, the real benefit with Onvia is that you can find informal opportunities that often aren’t broadcasted to the public.
3. Find RFP: In addition to aggregating potential projects for you, this website stores your preferences and sends alerts when possible bid opportunities arise.
4. GovernmentBids.com: This site is a great resource for construction, electrical, and road work opportunities. Create a profile within your industry and then find projects by state and region.
5. State and Federal Bids: The main focus of this website is bridge and road construction, making it a logical choice for construction companies with those focuses. Additionally, you’ll find projects for schools, water, airport authorities, and jails.
6. BidNet: By gathering RFPs from federal, state, and local governments, BidNet offers an impressive listing of opportunities. New projects are sent daily by email, with reminders of expiring term contracts.

Finding Lucrative Projects Outside of the Government Sphere

While government jobs offer unique benefits, they are hardly the only projects worth seeking. Many construction companies actually prefer to work in the private sector, as the competition isn’t as fierce and the processes can be more streamlined. If you’ve ever waited in line for hours at the DMV, you already have an idea of the negative side effects of government bureaucracy.

It’s true that non-government jobs are less procedural than government jobs, but that doesn’t mean you should treat your bidding any less carefully. Make sure you allocate enough time to do a thorough analysis of the project before submitting. Your bid should include every document and detail requested, with extra emphasis placed on your company’s differentials.

Numerous websites are available as you search for non-government bidding opportunities. These include iSqFt, Construction Bid Source, Building Construction Bid Network, Bid Express, ConstructionMarketData, Dodge Global Network, MedicalConstructionData, Infrastructure Civil Works and Construction Tenders, North America Procurement Council, BidClerk, and Building Radar.

If you want to avoid the breadth of nationwide searches and instead want to focus on local opportunities, it’s worth checking out the jobs coming from your state’s procurement office. Once you create a profile, you’ll receive updates on upcoming work for which you can submit a bid.

Full List Of State Procurement Offices

Obtaining the Best Financing When Necessary

Construction projects come with a wide array of internal costs, so extra funding may be required. This need is especially true when you account for the rising costs of equipment and materials. Many small businesses turn to equipment financing, as it is engineered specifically for these types of expenses.

“Whether you need to purchase computers for a growing team or invest in specialized machinery or vehicles, you’ll need to consider how you will pay for that equipment,” says the US Chamber of Commerce. “A business equipment loan can help you quickly obtain working capital to buy or lease the items you need for your business. You’ll be able to manage your cash flow seamlessly, as this financing will allow you to spread out your payments over a longer period of time.”

Equipment loans can have dollar amounts up to $5,000,000, with favorable interest rates starting at 7.5%. Plan on the repayment terms ranging from 1–5 years. You can use the money for nearly anything related to your project, including power tools, trucks, trailers, or materials.

Of course, you have other small business financing options if an equipment loan isn’t a great fit. Here are a few of the top contenders for your construction needs.

Rest assured that there’s a business loan for any need that may arise for your construction business. All that stands between you and an ideal financing product is due diligence. Although you may feel pressure to get financing in a hurry, taking a careful approach puts your business in the best possible position to score short-term wins and build long-term success.

Editor's note: This is part 4 of a series: Competing on Main Street; see also Market Competitor Strategies: When New Competition Moves In Next Door; Market Competitor Strategies: Analyzing Direct and Indirect Competition; and Market Competitor Strategies: Differentiate Your Small Business from Competitors.

"Know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run."

Kenny Rogers, “The Gambler”

Kenny Rogers had it right: it is important to understand how to approach different situations and learn to deal with the cards you are dealt—literally and figuratively—particularly when you're addressing market competitors.

The same sentiment from “The Gambler” applies to small business owners considering their best move forward with competition on Main Street. As a business owner, you need to know when your competition makes moves, how their moves affect your business, and what you need to do in response.

Much like gambling at the poker table, you can increase the odds of beating your business opposition when you understand the strategy behind their moves and your available options.

What Are Common Moves by Small Business Competitors?

Small businesses in any industry or market have several strategic moves available to them, including your own.

Whether it’s a market competitor opening another location close to yours, a business deciding to slash their prices for the summer, or the launch of a new product in your space, the moves your competitors might make can be broad and with varying significance.

For example, if you run a Mexican restaurant, you may have a cross-town competitor launch a special on Tuesday night’s “Taco Tuesday” that offers a significant discount to patrons. You may also have a Mexican food truck that partners with the brewery across the street from you, where a lot of your walk-ins come from. You know that responding to both these moves is important … but after assessing the competition and situation, you prioritize the food truck across the street because your analysis indicates that it is likely to have a more immediate and bigger impact on your business.

Some of the common competitive moves you may face include:

• Market Competition Lowers or Raises Prices: Changing prices is one of the most common competitive moves made by small (and large) businesses. With an estimated 92% of customerscomparing prices before purchasing, it’s also one of the most effective ways to gain a competitive advantage. Whether competitors are decreasing or increasing their prices, you have to determine how your business will respond.

• Market Competitor Invests in a Marketing Strategy: Businesses of all sizes will often turn to marketing and advertising when looking for opportunities to gain market share from the competition. If you hear your competitor on the radio or see their ad on a billboard, how would you respond?

• Market Competitors Expand Their Business: Your competitors may decide to expand their business through additional locations or by purchasing new equipment or assets to further their production capacity and scale. If you run a junk removal business and one of your competitors purchases an additional truck and trailer to increase their output, how will that impact your business and what should you do about it?
  
• Market Competition Changes Product or Service: Competitors will often add or remove products or services from time to time, creating opportunities or challenges for your own business. How you respond to changes in your competitors’ offerings can have a significant effect on your short- and long-term growth.

How Do Direct Competitors’ Moves Affect Your Business?

Recognizing when your direct competitors make a move is important, but even more so is the ability to know how it will affect your business. If you run a local web design company and your competitor starts contacting your clients, do you know how that will affect your business? Are your clients going to defect to your competition?

While every industry, market, and business is unique, below are a few potential outcomes of different competitive scenarios in businesses.

Direct Competition Lowers Their Prices

Competing businesses can go months or even years without changing their prices, and this period may sometimes feel like a ceasefire during the inevitable pricing war. Then, out of the blue, your competition decides to break this unspoken truce and lower its prices.

Immediately, you may feel pressured to lower your own prices to match—but is that the right move? Before you take any action, you need to understand how your business is impacted by their lower prices.

When competition lowers their prices, it can:

• Change customer expectations: There’s a value exchange anytime a customer purchases a product or service, and the price of that purchase is the quantifiable measurement of said value. When a competitor lowers their prices for a similar good or service to yours, it can change the customer's perceived value either positively or negatively depending on the quality of your goods or services. If your quality is similar to or worse than the competitor's, customers may choose your competition because they are receiving more value.
  
• Signal an industry change: Your competition may have lowered their price because they found a way to lower their own costs and want to pass those savings onto the customer. Whether it’s new equipment, improved technology, cheaper materials, better vendors, or operational changes, the move to lower pricing could signal a larger change within the industry or market.
  
• Influence market share: Market leaders don’t usually spearhead price wars, it’s usually businesses with a smaller share of the pie or new companies entering a competitive market. In either case, when a competitor has lower prices, it can influence market share in their favor—if they can sustain those lower prices.
  

To truly understand the impact of a competitor’s lower prices on your business, consider talking with your customers and gaining some additional insight into their loyalty and perception of the competition’s new prices. 

Market Competitor Steals Your Best Employees

You may not realize it, but your employees are some of your most valuable assets, especially your best ones. And, if a competitor swoops in with a better offer, would they jump ship?

Odds are, yes.

We’re currently in the midst of the “Great Resignation,” with US employees quitting jobs at rates unmatched over the last 20 years. Your small business isn’t just competing with other companies for customers, it’s also competing for talent.

If your employees are switching to your competitor, it can have a significant effect on your business. It causes productivity to decrease—the highest-performing employees are believed to be 4x more productive than your average employee. It also costs a lot of time and money to replace them with the average US company spending approximately $4,000 and 52 days finding a new employee. Moreover, employees for small businesses often develop strong relationships with customers, so if they move to a competitor, those customers may follow.

Direct Competitor Introduces a New Product or Service

Many businesses will introduce new products or services to their customers in an effort to diversify their portfolios and add value. If your competitor launches a new product or implements a new or improved service, customers are likely to notice.

For example, even before the pandemic and global lockdown, retailers—including small businesses—were implementing more flexible check-out experiences with services like home delivery or buy-online-pickup-in-store (BOPIS).

One study from the National Retail Federation found that 70% of shoppers said the convenience of BOPIS improved their shopping experience. If you run a retail store and a competitor launches BOPIS for its shoppers, you may see customers opt for the convenience of your competition.

When your competition introduces new products or services, customers may reevaluate their needs. If it’s disruptive or isn’t easily replicated, it can differentiate them from you and other similar businesses in your market—making it challenging to overcome. This could lead to lost customers or worse if it renders your business obsolete (video rental stores, one-hour photo labs, record stores).

How to Respond to a Competitor’s Move

So far, we’ve discussed common competitive moves and how some of those moves affect businesses differently, but the real question is, what do you do? How should you respond when a competitor takes aim at your business?

1. Acknowledge and Assess Their Competitive Strategy

Before you can respond to a competitor’s move, you need to recognize and contextualize it. This requires monitoring your competition on an ongoing basis and staying updated on your market and industry.

Conducting periodic competitive and market analyses is a great way to keep a pulse on what’s going on with your competition and the industry as a whole. You may also want to check your direct competitors more frequently for common changes related to pricing, products, and marketing.

2. Measure and Forecast Its Impact

After you’ve discovered a strategic move by your competition, the next step is measuring its effect on your business. Depending on the move, you may already have noticed a change in your business—more times than not, however, you’ll need to forecast and estimate its impact.

For example, if a competitor has lowered their pricing on a product you also offer from $10 to $9, you should try to predict the impact that change will have on your business before making any response.

If that product costs you $6, a change from $10 to $9 decreases your profit by $1 per sale. If you want to go a step further (and you should), try to predict the total effect it could have on your revenue by estimating how many customers you expect to lose (and keep) if you don’t lower your price.

Let’s say over the course of a year, you average 2,000 sales of that product. If you lower your price, you’ll retain them all—if you don’t, you anticipate losing 500 sales. At first, losing 25% of your sales may seem like a red flag, but let’s look at the numbers.

In this scenario, you end up with the same profit at the end of the year regardless of whether you lower the price or not. With this knowledge in hand, you can make the best decision for your business using actual analysis and not instincts alone.

By anticipating the impact of the competitor’s move on your own business in the short and long term, you can make better strategic decisions.

3. Determine Your Options and Your Own Best Competitive Strategy

When your market competitor makes a change to their business, you have an endless amount of responses available. To avoid a knee-jerk reaction, take time to list out all your potential moves and the impact of each.

It’s important to remember that when assessing what response to take, consider the relevant external factors—you’re not operating within a vacuum.

For example, if a competitor is stealing your best employees, an immediate response might be to raise your employees’ pay. However, this doesn’t consider other factors like rising inflation, which may already be eating away at your profit.

Increasing pay could be a short-term solution to losing valuable employees, but it could lead to long-term revenue issues, which may eventually cause you to cut back your employees’ hours—driving employees away again.

If you don’t take the time to analyze your options, you’re not going to consistently make the right decision. In the example above, the actual answer to keeping employees loyal could be unrelated to pay altogether. Maybe your employees want more flexible work schedules, better training, more ownership, autonomy, or any number of other non-monetary benefits.

Before making a decision, take a beat to assess all your options. You may even find that your best response is no response at all.

4. Make Your Move, Measure the Results, and Adjust If Needed

After you’ve made the decision on how to respond to your competitor’s move, the next step is to simply execute it and measure its results over time. While you may have estimated its impact prior to taking action, you should still track performance afterward—in case a change is needed.

For example, in the pricing example from step 2, we estimated a loss of 500 sales annually if the price was not lowered to $9. If you break this out monthly using seasonal sales trends from previous years, you should have a rough idea of how many sales you expect to lose monthly.

After three months without lowering the price, you can collect sales data for that product and compare it to what you forecasted. If sales are in line with what you expected, great! If they’re much worse than you anticipated, you may decide to pivot and lower your price.

Businesses must aim for agility when it comes to their competitive response. While not every scenario will allow the same flexibility of raising or lowering prices, a willingness to assess business decisions objectively and make swift changes as needed is what’s most important.

Competing in business comes with a lot of chance and unpredictability. What may have been the right decision from every analytical perspective could end up failing, and that’s okay. Don’t be afraid to be wrong—but when you are, be willing to correct it.

What is market share?

Market share refers to the entire consumer pie for a specific industry or market. It’s the percentage of total purchases for a product or service that a company makes up.

For example, if your business makes $100,000 a year and all your other competitors combined make $900,000, the entire market is $1M—of which you own 10%. Your market share of 10% means there is 90% of the market available to you.

The excess market share is your growth opportunity. With 90% of the market available, you can make strategic moves to begin capturing more of that share.

What are competitive strategies in business? 

In business, a competitive move refers to a deliberate strategic change by one company with the purpose of increasing market share. Most competitive moves involve strategies related to pricing, product/service, customer relations, costs, or marketing and advertising.

When a competitor makes a strategic move, other businesses within that market must decide how to respond. This can create market pressures that lead to price wars, innovation, and other consumer-friendly benefits. In short, competitive moves are the driving force behind a free market.

How quickly should businesses respond to a direct competitor’s move?

When responding to competition, it’s best to act as quickly as possible after you’ve made your decision. However, it’s important to give yourself enough time to assess the situation from several vantage points.

First, you need to understand how the competitor’s move will affect your business, customer perception, other competitors, and the market as a whole. You then need to outline all your available responses and the impact each will have on your business.

With all this information in hand, you are now prepared to make an educated strategic decision—not simply the first or easiest choice.

Play the Cards You’re Dealt

Running a business is a lot like playing poker. You're competing against several others and all striving for the same goal (to win). You’re also constantly evaluating risks and making strategic decisions based on the information available—both present and historical. Finally, you’re not going to win every time, and you can’t dwell on the losses.

So, the next time you hear Kenny Rogers’ “The Gambler,” think about how that applies to running your business—especially as it relates to competing on Main Street. You may come away with more clarity and understanding of how to simply play the cards you’re dealt.

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