In the United States today, over 28 million small businesses are accounting for about 99.7% of all businesses in the country, this is according to the Small Business Administration. This ultimate guide to starting a small business is a must-read if you intend to establish a small business.
Looking at some of the reasons for starting a small business, such as coming up with a fantastic business idea, being able to attain financial independence, having a career path that you can grow with, and also investing in what you love to do – little wonder why small businesses keep springing up in the US.
However, it is not every small business that has the potential of succeeding. Besides, statistics have it that only about two-thirds of startups have employees’ scales through their first two years of existence while about half make through the first five years, so. You may be in for some challenges when you quit your regular job to become a small business owner.
So, it is recommended to follow this ultimate guide to starting a small business so that you could boost a good foundation for success.
The following ultimate guides are necessary when starting a small business, take each one at a time and you are guaranteed of recording great success as a small business owner.
Adequate Research Is Needed
At this point, you should already have a business idea and be ready to balance it with a bit of reality. What is the success ratio of your new idea? At this juncture, it is important to run the idea through a validation process before proceeding.
For a small business to succeed, it must offer something that is needed by the market or solve a problem. What the market wants can be determined through market survey and research, the use of focus groups, and even doing a trial and error.
Going forward, you should ask the following questions;
- Are the products/services needed?
- Who needs the products/service?
- Are there current competitors doing the same thing?
- What will you do differently to get into the market?
Also, it is good to ask yourself some other questions on how to start a small business before you ditch your regular job for starting a small business.
Do You Have A Business Plan?
You would require a business plan to transform your business idea into a reality. The business plan is a written document that would guide your business from the small phase through to the established phase. This document is a must-have for every new business.
Therefore, there are different business plans for different businesses. In case you require financial help from investors or financial institutions, writing a business plan is a must. This would serve as a blueprint that investors and banks can read through to validate your business idea.
However, if you intend to finance yourself, a simple one-page business plan is required to give clarity about your goals and vision.
Good Financial Management
Starting a small business would not always need a huge capital but require an initial investment and being able to cater for expenses before breaking-even. It is important to have a spreadsheet where your one-time start-up cost is captured. Some of the one-time start-up costs include the cost for license and permits, insurance cover, market research, legal fees, the cost for opening, the cost for rent, trademarking, inventory, and so on.
Another cost that should be captured is what you anticipate to keep the business going for the next 12 months, these are; production costs, travel expenses, utilities, advert and marketing, supplies, employee salaries, your salary, and so on. All these make up your initial investment for the business.
However, the following are ways through which your small business can be funded:
- Small business grants
- Small business loans
- Self-financingstarting small
- Angel investors
Besides, bootstrapping can be used to kick start the business, that is, using small capital to start the business. Therefore, go through the options and pick the one that best works for you to get your business to a good start.
Do You Have A Business Structure?
The small business can either be a sole proprietor, partnership, Limited Liability Company, or a corporation. The business structure you settle for would determine your business name, the liability, and how tax is being filed.
However, the initial structure you pick and change as the business grows and needs modification. It is recommended to seek counsel from an attorney or CPA so that the right choice is made.
Register A Business Name
The business name you adopt plays a large role in every aspect of the business, so, do thorough research and highlight all the implications attached to the name you are settling for.
After choosing a name, check if the name is already in use or trademarked before registration. The state or country clerk registers a sole proprietor while limited partners or corporations get their business name registered when the paperwork is completed. It is important to register a domain name after registering the business name.
You Need Permits And License
Getting the necessary paperwork done is part of the process of starting a small business. Your type of business and location would determine the type of license and permit to get. Find out all necessary permits and licenses that apply to your line of business.
Get Your Business Location
This is crucial if you desire the success of your business. So, you would determine if you would operate from home, get a private or shared office space, or a retail location.
Consider your location concerning equipment and set-up and ensure the location best suits the type of business you are establishing. So, you would need to decide on whether to lease or buy the space.
Get Your Employee Ready
It is important to know the positions to fill and the job roles attached. The Small Business Administration has a unique document that guides on employee hiring.
Also, if you are not hiring but outsourcing to contractors, there is a need to get counsel from an attorney on getting an independent contractor agreement before embarking on the search.
So, if you are starting alone, you would need a support team that includes a mentor, career or business coach, or even your family. This category of people serves as motivation when things get tough.
Pick The Right Accounting System
Having the right system assists in the smooth running of your business. The accounting system would help in the proper management of your budgets, fixing prices, and filing for taxes. You can either hire the services of an account or set up the accounting system yourself.
It’s Time To Promote The Business
It’s now time to start letting people know what you do. This can be through the writing , selling propositions and having a marketing plan. Also, you could use other business marketing ideas as a guide to marketing your products/services.
Reading and adopting the ultimate guide to starting a small business would put you in the path of success, but know that success is not a destination but a process.