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Think Like a Business

When you start a small, part-time, business, your main concern is—naturally—the product or service that you want to offer.

But you should also be starting to think like a business. You don’t need a business degree to do this—just common sense and a bit of research.

As you are starting your business, it’s a good time to consider all the factors involved in running your business. Make sure you are addressing those issues that will enable you to manage your part-time business legally and profitably.

Here are a few topics you should be researching and planning for:

“Office” space:
Do dedicate a separate place in your home for your new business. You’ll want to keep everything all together:

  • Your products and supplies, your tools and equipment
  • Desk space for your business records
  • A place to pack and store your products

Create a budget for your new business:
Estimate your expenses and your income, and your projected profit.

  • Expenses: Make sure you include all your possible expenses, and do your research to develop those costs.
  • Income: How much will you have to sell to make a profit? Is that a realistic number?

Identify your customer base:
Who are your intended customers? Get to know them:

  • Why would they buy your product or service?
  • Where do they live and shop?
  • What is their age range?
  • What is their income range?
  • What other products or services do they buy or use?

The answers to these questions will help you determine the branding for your product, where to market, sell, and publicize your service, and your pricing.

Product or service pricing:
Start putting together your sale prices. Research your competition—vendors who offer similar products or services. What do they charge for products similar to yours?

Build your brand:
Creating a brand may sound complicated, but it doesn’t have to be.

  • A brand is merely a kind of shortcut to telling your targeted customers what they can expect from you.
  • It’s also a way to set you apart from your competition. When a customer sees your brand, they should know what kind of product or service they’ll see, and likewise, when they see your product or service offering, they’ll immediately think of you.

Create your business name and logo:

  • Ideally, your business name should sum up who you are and what your business does. Don’t make it be a mystery to your potential customers!
  • Keep your business name internet-friendly: Easy to spell; easy to remember; easy to search for, yet different enough that a million pages of similar listings won’t come up.
  • Keep it a little open-ended: Don’t trap yourself into one product or service. Think Incredible Hawaiian Tours rather than Bob’s Honolulu Tourist Tours.
  • Do a name search: If you find other businesses with names just a little too similar, or a website name that’s already taken, start thinking of creative variations on your chosen business name, or even other name options.

A logo can be anything: A special type treatment, a little artwork, or a stylized letter.

  • Make sure it appropriately represents your business
  • Make sure it’s legible
  • Make sure it fits well in various formats: business cards, bulletin board listings, signage, websites, brochures, stickers, etc.

If you are selling a food product, you will probably need a license and be certified by the health department. Check the State of Hawaii, Department of Health, Sanitation Branch. 

Income tax: You will owe taxes on the net profit from your business — that is, the total amount of income you made, minus your business expenses. The amount you pay increases as your business’s net profit increases.

You will most likely file your taxes for your business on a Schedule C form as a sole proprietor. Don’t worry—it’s not complicated! If you need help, consult a tax preparer or tax accountant. You can also find more information on the IRS website.

Sales tax: The laws vary by state, but sellers generally need to collect sales or general excise tax from buyers. Visit the Hawaii State Department of Taxation for more detailed information. Your PayDayHawaii office can help you complete a GET application.

Shipping: Will you be shipping your products? If so, do some research on how to provide an excellent shipping experience for your customer.

Helpful sites:

How you are going to package your product for shipping? What packing materials will you need? Tip: Order a product similar to yours, and observe what packaging it arrives in, and in what condition.

How much will you need to charge for shipping? Include both the cost of packing materials and postage in your calculations.

Collecting payments:
How will you collect payments from your customers? Will you need to set up credit card processing? The company Square offers low-cost, mobile, and simple credit card processing.

Selling and marketing venues:

  • Decide where you will be selling your products. Will you create a shop on Etsy? eBay? Will you sell at craft fairs, or farmers markets?
  • If you are going to offer a service, where will market it? How will you let your potential customers know about your service?

For more help:
A great source for help is the Small Business Administration. The SBA offers many small business resources and advice, from creating a business plan to security practices and policies to protect sensitive information.

This is just a quick overview to get you started. Don’t worry, we’ll be going into more detail on each of these subjects in future posts.

For now, it’s time for you to start thinking like a business!

This entry was posted in Hawaii Neighborhoods, Second Income, Small Business, Tax Planning and tagged , , , , , , , , , , , by sandynight. Bookmark the permalink.

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