Northwestern Mutual: 5 Essentials for Starting a Business

Anyone starting a business must consider many things, including determination, passion, grit, funding, market research, marketing, and hiring. Thinking about these factors early on may help new business owners reach their goals sooner. Here are five essentials for anyone thinking of starting a business.

A business plan

A business plan is one of the most essential things an aspiring entrepreneur needs. A clear business plan can help business owners keep sight of their short- and long-term business goals, monitor progress, and adjust tactics when necessary. “A great business plan also includes you values. These will become your North Star in tough time” said Clay Cooper, CFP®, wealth management advisor with Clearview Financial Partners – Northwestern Mutual in Vancouver, Wash. This document will outline business goals, strategies, and a plan to achieve them. It can guide business decisions, help structure processes, and even serve as a tool to help secure funding from investors. “Have a ten-year target, three-year plan, one-year goals, and then go out and sprint one quarter at a time,” Cooper says. “Make sure to reflect after each quarter and recalibrate on what issues and opportunities need to be taken care of for the following quarter ahead.”

Funding

Entrepreneurs need to have enough money to cover startup costs, including renting office space, hiring employees, and purchasing inventory or supplies. Cash is king for a startup. There are different ways to raise money for a business, such as taking out loans or using personal savings. “Life insurance policyholders with whole life insurance or universal life insurance can even borrow against their policy’s cash value as a source of funding to cover unexpected costs or opportunities,” said Cooper.

A great team

“It seems like we live in a world where great team members are hard to find. Service is everything to your clients. No one wants to call a 1-800 phone tree. The biggest growth we have had in our business is not some new crazy idea but rather than hiring the right people. I feel so fortunate for the team we have built. That is any business owners’ secret weapon,” says Cooper.

Not everyone starts a business planning to hire right away. Plenty of business owners start out as the only employee, and many run a successful business that way for their entire careers. But for those who are hiring, there are a few considerations. New business owners will want to surround themselves with people who share their vision, values and are trustworthy, knowledgeable, flexible, and adaptable. It’s also important that colleagues are willing to share open, honest feedback about practices and decisions that are not working. One of the most influential books Cooper has read on this topic is “Who Not How” by Dan Sullivan.

Market analysis

A thorough market analysis can provide an in-depth understanding of the industry as well as the knowledge that what the business is offering fills a gap. “This means conducting a market analysis, which may provide an overview of the industry, possible target markets, and any competitors,” said Cooper. “This information will help business owners make informed decisions about strategy and positioning.”

A market analysis may look different depending on the business type. Someone setting up a local bakery can learn a lot by talking to potential customers and observing the competition. But someone launching a cosmetics line may need to work with a market research company to know what beauty enthusiasts are looking for and how to break into the market.

A competitive edge

Finally, business owners need to have something that gives them a competitive edge over other businesses in the industry. “Business owners should ask themselves what makes them distinctly different from their competitors. And then use that as the framework for their messaging and marketing,” Cooper said. “A competitive edge can help attract customers, have your costumers become your biggest advocates, and grow the business. It also makes for a good pitch to potential investors when the time is right.”

The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance
Company (NM) and its subsidiaries in Milwaukee, WI.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Source: Northwestern Mutual