Small Businesses are popping up all over the place. According to the Small Business Administration they make up 99.7% of businesses in the United States. There are several reasons that a person might start up their own business. The most common is having a business idea that is unique. It also allows you to some flexibility, you can have flexibility to grow, to work the hours that you choose to put in, and it also allows you some independence. With that independence you are free to choose how hard you want to work and how successful you want your business to be. It is important to remember that every small business that is started will not necessarily succeed. Two-thirds of businesses that start up will only survive two years. And only fifty percent will survive up to five years. It is no joke that starting a business can be a huge risk. A lot of the success rate is determined in the beginning of your business. So it is important to make sure that all the necessary steps are taken to ensure that your business will have a solid foundation and be able to grow and be profitable.
Most businesses get started with an idea. Maybe there is something already on the market that you want to improve or could sell better. Maybe you have a unique idea that you want to work with. Whatever the case, you have had the idea of a business plan and want to put it into action. First things first, is to evaluate whether or not your idea has the potential to succeed. Take a step back and look at your business idea in the real world. Will people have a reason to use your business over other businesses that are already established? You want to make sure that there is a need for your business. As you are determining the validity of starting up your business there are a few questions you could ask yourself. Is there a need or demand for your product or service? Who will you be marketing your product to? Who are your competitors? Will your business be able to fit into the market it is designed for? Researching your business idea can be the most important step in starting a business. This idea or product is what you will be dealing with for hopefully many years to come. If it is something you are knowledgeable and passionate about, it will help when you are putting in those long hours to get the company started.
After you have thought of your business idea, it is time to start making a plan. People may have really great business ideas, but they never take the next step and start making plans. You need to create a business plan that will take you from starting up your company to actually establishing your company, to finally growing your company. A traditional business plan is used when your company will need financing to get started. It also helps make future projections and will help with making your marketing effective to your clientele. The traditional business plan can be long and thorough, but it is necessary because there are sections that your investors and banks will want to look at to make sure that your idea is going to be worthwhile. If you are not going to need financial backing to start your business, you can get by with a simple one page business plan. With this business plan, you write down what it is you want to achieve by starting your business and what steps you are going to take to make those achievements a reality. Some people start their simple one page business plan on a scratch piece of paper, or a napkin from a restaurant or bar. Great ideas and plans can start anywhere, you just have to make sure that you do start them. Writing things down and creating plans will help make your dream of running a business a reality.
All businesses will have some start up costs. These costs can vary greatly from one business idea to the next. There are business license and permits, legal fees, insurance, marketing, trademarking, equipment, property leases, inventory, etc. It is helpful to create a spreadsheet with a list of expenses that you know will incur. There will be surprise expenses along the way, but if you at least have a ballpark of how much you will need to get started, it can be extremely helpful. It is helpful to also create a spreadsheet listing what your business will need to operate for one year. For example, rent, supplies, salaries, utilities, marketing, software, etc. After these two spreadsheets are completed, you can compare them and get an estimate of how much money will be needed to have the business up and running for a period of one year. If you require funding to help start up your business, there are many options that are available. They include, financing, small business loans, crowdfunding, small business grants, and angel investors. You will want to make sure you pick an option that works for you and that will help your business grow and be successful.
You will need to choose how your business will be structured. Businesses can be Limited Liability Companies, Corporations, Partnerships, or a Sole Proprietorship. How you choose to set up your business affects your business name, your liability and it will determine how your taxes are filed. If you choose one entity and then decide later on that your business would do better as something different, you are able to change it as your business grows and changes. Asking an attorney or a certified public accountant what business structure to use is often time worth the investment.
Now that you are decided how to set up your business, it is time to decide on a name for your business. The name of your business will be included with all aspects of your business, so it is important to pick a good name. When deciding on names, explore all options associated with the name, both the good and the bad. Once you have determined the name, you will then need to make sure it isn’t trademarked or being used by someone else. If everything checks out, you are then going to need to register your business. If you chose to set up your business as a Sole Proprietor, you will need to register your business with your state or county clerk. If your business is a Corporation, LLC or Limited Partnership, your business will be registered once your formation paperwork is filed. After your business name is secured, you should look into securing a domain name.
After you have picked your business name and made it official, it is time to get any licenses and permits that will be needed to operate your business. A license is the ability to do something. A permit implies that there has been an inspection. Different businesses will require different licenses and permits. The Small Business Administration has a “Permit Me” service where you can enter the zip code and type of business that is being started, and it will inform you of the licenses and permits that pertain to that area and business type. A business that is regulated by a federal agency must obtain permits or licenses. The Small Business Administration also has information regarding the federal agencies that require licenses and permits. Then there are state licenses and permits that are required for almost all businesses. If your business is selling products or services that are subject to state tax, then a state tax permit would be required. Professions such as doctors, dentists, veterinarians and more require state licenses as well. If you are in a profession that is regulated, you can contact your state’s professional society and obtain more information and help as to what is needed. As always, make sure you have done your research on what licenses and permits will be needed for your business to start up.
If you want your business to run smoothly and effectively, it is very important to choose a good accounting system. Your accounting system is what is going to help you create and manage your budget. It help you set your rates and prices. It is what you will use to conduct business with other people and businesses. You will use your accounting system to help file your taxes. There are many different accounting software options available. Many of them are geared toward certain businesses. Do your research, find out what it is you are needing from an accounting service. Many programs offer a free thirty day trial before requiring you to purchase anything. Take advantage of this. Accounting software can be expensive, so try out a few different options before commiting. You could also consider hiring an accountant, this would help take away any of the guesswork that may come up. The accounting process is something that you will use day in and day out with your business. Make sure to choose an option that allows your company to be productive and thorough.
Where will you run and operate your business? Is it a home office organization? Will you rent space? Or are you looking for a retail location? All businesses are definitely not the same, location is a very important part in setting up your business. If you have equipment and products to store, it is important to find a place that allows you access to the items. When looking at retail space, there will be options to buy or lease the space. Make sure you understand which option would make most sense for your business.
Ok, so you have established what your business is going to be all about. You have done any licensing that is needed, pulled permits if necessary, you have secured a location to start your business, it is now time to get ready to your business team ready. Hiring employees can be a daunting task. You will first want to start with an outline of what positions you need to fill and what the responsibilities are of each position. If your business does not need employees and instead you need to hire independent contractors, you will need to get an independent contractor agreement in place. Your attorney will be the best source to use to create your contractor agreement. If your business needs no employees or contractors and it can just be run by you alone, it will still be a good idea to have a support system in place. This could be a mentor or a family member. It is just good to have someone out there that you can run ideas by, get motivation from or even reassurance when things may get tough.
Now that your business is ready to be up and running, you will want to make sure that you promote your business as much as possible. This is how you will get clients and grow. You will want to create a marketing plan that fits with your business. You can hire out a company to do your marketing for you, or you can try to tackle the task yourself. Your clientele will help you determine what kind of marketing you need to do. Remember who your target is and gear your marketing towards that. Make sure your marketing plan is efficient and effective.
With all these basics covered regarding your business, you should be ready to get started. While every business is different, these basic helps will guide you to knowing how to get started for your business. Remember that businesses don’t become booming successes overnight. They take a lot of hard work and dedication and long hours. Make sure you follow your plan that you have outlined. You have set yourself up for success, now you just have to work hard to make that happen.