So You Want To Start A Business
So You Want to Start a Business
You’re ready to make the leap. You have a great idea and want to create a business to share your idea with the world. That’s great! I am all about supporting people that have the drive and ambition to create something of their own. This blog is about my experience when I was opening our own business and the struggles that came along with it. I highly doubt everyone will have the same experience as me but I wanted to shed some light on things that I wish someone had told us before we jumped in head first into owning a business.?
First things first, I own an athletic wellness center in Alpharetta, GA where we focus on providing services including whole body cryotherapy, localized cryotherapy, cryofacials, compression therapy, electrical muscle stimulation therapy, and percussive therapy. While this is a very niche market, most of the things that we have learned about opening a business are pretty general. My goal for this blog is to tell people about our specific problems while providing generalized recommendations that can be applied to all business types.
As for my personal background, I am 26 and a licensed pharmacist (graduated from Mercer in 2020 with my doctorate). I worked in a sterile compounding lab from April 2020 until July 2021. I loved pharmacy, but I could not deal with the extensive working hours. I was working what felt like all the time in an environment that just didn’t suit me (think hazmat suits). The reason I wanted to be a pharmacist was to help people and I just didn’t feel like I actually could do that as a pharmacist. During my last few months at my job, I started formulating ideas that I wanted to do instead. The one that kept coming to me was creating a space for athletes to get therapies done to help prevent injuries and just overall make them not feel as crappy during their seasons. I will say, I had the luxury of quitting my job without having a solid plan for the future (highly do not recommend doing this). I realize that many people will not have this opportunity, but I had a good support system. We also realized that this may be one of the few times in our lives that opening a business would actually make sense (we have no kids, live below our means, and have the resources needed).
Before you start a business, quit your 9-5 job, or even think about calling up a bank or other financial institution to get your business loan you must make a business plan. You may think this is overkill because “I’m just opening a restaurant” or “I just want to be a photographer”. Building a business plan gives you the opportunity to really take an introspective look at your business and can help you answer questions you maybe hadn’t even thought to ask yourself. We used a website called LivePlan to help us build our plan and we really only have positive things to say about it. They have two types of plans depending on how in depth you want your plan to be. The cheaper option is around $15 / month and the plan that comes with financial planning resources is around $30 / month. Their site is extremely easy to use and even comes with examples and an entire blueprint of what should be included in your business plan.?
We spent around 40 hours working on our business plan before moving forward with anything else. It also really helps you to hone in your idea to be much more effective and realistic. When I started writing our business plan, we were envisioning a massive 3500 square foot facility that provided about 3 times as many services than we currently provide. In reality, that business would have cost about 4 times as much money to open. When we realized this, we started really taking a look at what services were really important to us to offer and what our goals were long term. After we had this discussion, we narrowed our business down to be able to fit within a 1000 square foot space, offered 5 services, and had our cost of opening just under 200k.?
Another thing that we built into our plan that I think is a must-have for all businesses, is to expect a 10% overage for all expenses when you’re opening. You will run into issues along the way, how big they are will vary but if you build in that overage you will most likely have enough money to build your business and maintain it for a few months with limited customers.?
After your business plan is built, make sure you have a road map of things that need to be done all the way up to opening day. We built our road map to extend 3 months past the date of opening to account for marketing, employee additions and other random items that we knew would cost money. This road map should contain things like: forming your business legally, how to get funding (& how much you need), getting finances in order to apply for loans, contacting commercial leasing agents/companies if you are planning on having a brick and mortar location, and speaking with the city that you want to open in to obtain the ordinances around your business type. These are just a snippet of what could be on that expansion plan as I know there are thousands of things that need to get done when you’re building a business.?
The next thing I wish someone had told me about was how difficult it would be to get the funding for your new business. Almost everyone is really hesitant to use their own money (or should be) when opening a business because of the tax implications. When I was doing research into how to obtain loans and other sources of funding, I kept finding that the Small Business Administration would be a valuable resource for obtaining loans through. I reached out to a local bank that worked specifically with the SBA for new business loans and we began the painstaking process of filling out lots of paperwork and providing personal financial statements to prove our worth. However, after about 3 weeks, we were informed that the SBA had rejected our application. The reasoning? Our business was not a franchise and had not been operating for more than 2 years. Apparently, the SBA will only back small businesses that have a proven track record of being successful. That means that the SBA will be a very valuable asset if you are looking to open a franchised location or if you are looking to expand your small business after having documented success. Since our business did not meet those criteria, we were rejected. This led to us applying and speaking with close to 20 different financial institutions (since new businesses don’t have credit) before we were able to find one that took a chance on us. While they were willing to give us the business loan, they would not be a reliable source for everyone. We had to personally guarantee the loan and it was really dependent on income not related to the business. We really got lucky that we found Hippo Lending out of Virginia. This company specifically helps medical professionals in opening their own businesses / clinics. Since I hold a pharmaceutical degree and wanted to have IV therapy as one of the services at our business, I qualified for their program. Unfortunately, a few new laws came out around January 2022 that made us put a hold on our IV program, but it may come back in the future. We were able to secure a loan for about 50% of what we needed.
The financial piece of opening a business is the one that I think almost everyone underestimates. I know I did at the beginning. I thought I had done everything correctly. I was able to show Collin (my husband / silent partner / investor) our business plan, how we were going to allocate our business loan to maximize its effectiveness, and we had even built in a 10% extra amount for all of our spending. What we did not anticipate was the amount of time it would take us to actually open our doors to customers. Thankfully, we were able to allocate more of our personal funds towards our business to still do everything that we wanted to do, but this could have been an oversight that closed our doors before we even got going.?I am pretty happy to say that because we put in a 10% buffer on top of all of our costs when we were budgeting our business, we came in basically right at our budget (if not a little under). That was a great feeling knowing that we anticipated almost everything that would happen and if we didn't, the 10% buffer caught the few things we underestimated.
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A separate area that we highly underestimated was our construction costs and the immense time spent waiting. I think a lot of people don’t realize that there’s a pretty extensive process around doing any type of construction to a commercial building. We had renovated our home when we bought it and have been through the construction process, so getting quotes from contractors and speaking with companies was not a big deal for us. The bigger issue was the amount of bureaucracy that really hung a lot of things up. First, we leased a space within a basically brand new building. The building had been inspected approximately 6 months before we wanted to start construction. I say this because in my mind, this meant that a majority of things like inspections, permits, etc. would be a little easier to obtain because the city had just seen the building. They were not. We got quotes from a few different contractors and decided on the company we would ultimately end up going with. The sticker price of the construction alone was enough to make me start having my first doubts. We needed to take out one non-structural wall, build two changing rooms (which ended up being only 1), create two separate office spaces out of one existing room, add a few outlets, and upgrade one outlet to be able to handle the voltage required by our cryotherapy chamber. We had been quoted just under $40k to do all of the work including the permits and such. To us, that was an absolutely crazy high quote, but, for commercial work, only certain contractors and companies actually hold a commercial license which is held to a much higher standard than normal home renovations. Our contractor brought in an engineer to build out the building plans to be submitted for the city’s approval. Alpharetta is extremely strict and requires a certified engineer to sign off on all the plans that are submitted for approval. Once our engineer submitted everything, there was a 10 day mandatory waiting period to allow city officials to review the plans and either approve or reject them. Our plans were rejected a total of 4 times due to a multitude of reasons. The ones that really stood out to me were the changing rooms were too small, the cryotherapy chamber needed to be shown with its own cut sheets, and the outdoor area where we planned on storing the liquid nitrogen containers was not aesthetically pleasing. This went back and forth, each time with a mandatory 5 day waiting period between rejections (not including weekends and time that it actually took the engineer to redo our plans). This process was exhausting and we couldn’t start work until we had obtained our permit. The worst part of this was, I ended up having to be way more involved than I ever wanted to be because the engineer needed a lot of things given to him surrounding the cryotherapy machine and the nitrogen tanks. Finally, we got our permits and we were able to start construction around the second week of January.?
Originally, we wanted to open our doors on January 1, 2022 and we had started this permit process on November 17, 2021. We were already behind by about a month and I was starting to have my doubts about our budget. Construction started but our contractor moved very slowly. One of the biggest pet peeves I had throughout the project was how filthy everything was. I should have read our agreement way more carefully and put an end date in the plan to ensure that if they were not completed by that date, we would no longer be paying full price for the work. This is a learning experience I hope no one else has to go through, so please always remember to put an end date in your construction contracts. Our contractor also used some pretty bad subcontractors who left the place a mess and did things really cheaply. The entire process was really only moving forward because I was hounding our contractor almost every day to send workers by our store to do work. His guys were also really unreliable and there were multiple incidents of me and Collin having to find our own subcontractors that would actually show up and do the work because his workers had basically blown us off multiple times. We finally finished construction (somewhat) and were able to obtain our certificate of occupancy after 4 inspections with the general inspector and Alpharetta’s Fire Marshal. This was not the end of our construction problems but we had been given the green light to move forward with getting our business license. That was the most frustrating part of all of this, we were not able to apply for our Alpharetta business license until we had obtained a certificate of occupancy. Thankfully, even though the process was extremely detailed, the city of Alpharetta had some great people that worked with me to get our plans and construction approved. I’m still dealing with random things not being done within our space which apparently is something that almost everyone deals with when working with contractors. We’re still missing trim around our doors, some floor trim is missing, and a few other things which, thankfully, no customers have noticed but it drives me absolutely crazy.?
Our work with the construction kind of leads me into these next two sections. First, you do not know what you do not know. I made a lot of mistakes when I was working on things and estimating timelines and costs. That’s okay as long as you are aware of the mistakes you made and notate it for the future. The worst thing you can do is make a mistake and allow that mistake to happen again and again. Second, there are going to be people that are insanely helpful and people that are so unhelpful you are going to be dumbfounded. When you are building your business, you will have to learn to really use the people that give you advice and actively help you and basically only use unhelpful people when absolutely necessary. The problem is, there are many more unhelpful people than helpful in this world. I can’t even count how many people I reached out to with questions about random things and one of the following would happen: radio silence, a very snarky reply basically wondering why I would even ask a question like that, or someone that would make a comment about my age or gender as the causation of me not knowing that piece of information (more on that later). You would not believe how many people asked me how old I was or if my husband was okay with what I was doing when they had never met my husband and I had never even brought him up.
There were a handful of people that were so helpful through the process that it really made up for the majority that weren’t. The few people that were actually really helpful to me have been some of the best assets I’ve had since opening the business. It doesn’t seem like much but being able to reach out to people that are experts in their fields to ask them basic questions saves a lot of time and hassle when you just don’t really know anything about the topic. Those few people were absolutely amazing to work with in their own ways (I’ll probably write an entire blog on each of these people).?
The last thing I want to touch on in this blog about our journey thus far is basically what happens after you open your doors to the public. It was an absolutely roller coaster of a ride to get to where we are now and we are still learning a lot. We knew we wanted to heavily market our business so we set aside a pretty hefty budget at the beginning to allocate towards advertising. Once we were open, we started internet marketing almost immediately. The problem was, I was not aware of how confusing internet ads are. Pretty much all ad platforms had their own way of working and not a great way of integrating with each other. Somewhat embarrassing but it took me about two weeks to even realize that google analytics was something that we should be routinely using to monitor our website traffic. All of this said, my husband is amazing and very computer and internet savvy so I was able to rely pretty heavily on him to help me with our online presence and marketing. He optimized our SEO, figured out most of our google ad issues, and pointed me in the right direction for finding information on different types of marketing companies. We built business accounts across every social media platform we could find and started paying for online ads across almost every platform as well. We found that this put our name out there but did very little to actually drive traffic through our doors. Towards the end of the second week into the third week we were open, we contacted a company that specialized in mail campaigns and another company that did ads using geofencing. We are still waiting to see the results from those types of campaigns but there is one thing that I learned through this. It is that advertising is not the same business to business and that there are a lot of advertising companies out there that will upsell a simple service so much because it’s easy for them and will do basically nothing for you. Most companies just white label their services and have a really high turnover rate for their employees. For example, I went through a company to do a mailing campaign and the week the campaign was supposed to be hitting houses, I had not received any type of communication from my rep. Apparently, my rep had quit his job and the company didn’t see a reason to inform me about this. I had to call a few different times to finally get a new rep so that I could start seeing results from the campaign.??
I don’t want people to read this blog and be scared of opening their own business. I want more small businesses to open, but I also want the general public to be aware of the issues that normally go along with it that no one seems to talk about. I wish someone would have given me some of the advice I know now, and I want to pass that advice on to anyone that can benefit from it. I realize that my husband and I’s journey is very different from most people’s and that’s okay. We don’t all have to start from the same place or do the same things, but there is a general list of rules and guidelines that can be applied to basically every business type.?
Future Blog Posts
Management and Marketing Executive
2 年Great article Micheline Maxwell