Starting a small business can be a daunting prospect. Taking an idea and turning it to fruition takes many steps and precautions in order to be successful. Here is a short guide to aid in growing that seed of ambition into a money-making tree.
Do some research
Start with doing your research. Market research will allow you to look at other businesses that have started or are about to start and tell you if there is an opportunity to turn your unique plan into a successful trade. It is a way to gather information about potential consumers and pursuits already up and running in your market or area. You can use that information to compete and gain an advantage for your business.
In order to get the best results from your research, you need to come up with a plan. You must ask yourself certain questions about your services and/or products. Ask if there is a need for this product or service in the market. If you live in a hot climate, there is probably no need for a snow clearing company. Likewise, if you live in a dry state (no or little alcohol is consumed or bought) you probably don’t want to open a bar. Ask what are the general needs of the market you are trying to target and how can you improve or add to the lives of the people you are trying to sell to. You can do research fairly easily with the advent of the internet. Get online and google that stuff! There are many online publications that you can read in every aspect of business and business conduct so choose the one that fits your particular endeavor the best. Go to the stores that sell something similar to what you have in mind. Eat at restaurants that you believe could be your competition. Most likely there is an idea out there that mirrors yours unless you are really lucky and the idea has not been done yet.
Think about your pricing
The main reason why a consumer might leave you for your competition is that your pricing may not be fair or competitive. Maximize your profit by making yourself aware of what your competitors are doing and how the really successful businesses beat out the competition. Stay on the cutting edge even after you begin your business and don’t stop doing research even after you have been in business. The ideas and businesses that stay up and running are the ones that change with the tide. Even a novel idea can become outdated and boring in the ever-changing world we live in. It won’t happen overnight but if you keep yourself aware of your competition and what is changing out there it will help you have a greater understanding of your audience and what you can do to keep your head above water. Starting out is often the hardest part but if you stick with it, it should eventually pay off. If the idea and goal you started out with do not fly like you thought it would do not give up, try modifying your plan and keep going! No one who made it big and it lasted began quickly. Good things take time.
Formulate your Business Plan
Think of it as a guide to anyone reading it as selling them the idea for your business and why it would be successful. A good plan will guide you through each stage of managing and starting your new venture. It is a great way to sift through the key elements of your goal and help ensure your safety out in the big bad world of business. You will use your plan to grow, run and structure your thoughts and think through the elemental foundation of what you are trying to accomplish. A well-formulated plan will help you get funding or bring together new investors or partners. Your plan is the tool you will use to convince people that they want to work with you or invest in your project.
There is not a right or wrong way to write your plan, what is important is that it meets your needs. One of the most important aspects of your plan is to outline your funding requirements. Your goal is to explain how much you’ll need over the onset of your project, which will usually be a five-year process, and what you will use the funding for. Anyone who wants to invest in you needs to know that they will eventually have a return on their investment. This is where you will detail how they are going to be reimbursed and be profited from investing in your business. Give a detailed description of how the funds will be used. Specify if funds are needed to buy materials and equipment, cover specific bills like insurance, and pay salaries. Be sure to include a detailed description of the future plans, like selling your business or paying off debtors.
Assess your Finances
This is one of the most important steps in starting out. You need to determine how you are going to cover the costs of starting up and if you will need to borrow money. Most people that start need to borrow or get investors. You need to decide whether you can afford to leave your current job to focus your energy on this project. You will have to be able to support yourself until a profit can be made and will possibly have to adjust your current way of living to supplement your goal. Put away the money now with your future goal in mind. Most small business start-ups fail because of lack of funding before they start to turn a profit. Overestimate what you believe you will need to carry through before a sustainable revenue flow supports your idea. Financial assistance is almost always necessary in beginning a new project so doing research on loans is usually a step in the process.
Register with the Government
This step is necessary in order to become a recognized business entity. Your business purpose, name, corporate structure, and other information about your company is necessary to become a corporation. Otherwise, you will just need to register your business name or name you have come up with for your company like a “Doing Business As.” You may want to take the steps to trademark your name for extra protection in the future and to protect against theft. After registering you will need an EIN number from the IRS. This step is not required for sole proprietorships with no employees but you may want to apply for one to keep your business and personal taxes separate to save you the trouble later on. The IRS has provided a checklist to determine whether you need an EIN to run your business and you can register online for free. Certain forms need to be filled out and the forms you need will be determined by your business structure.
Purchasing an insurance policy
It may seem to be something you will eventually get around to doing, but in actuality, it is one of the key elements in starting your business. Purchasing the right coverage and insurance policy, from the right insurance company, for your business is an important step that needs to happen before you even start a launch. Dealing with incidents like theft, customer lawsuits, or business property damage can be so costly, it can shut you down before any of your dreams have been realized. If your business has any employees you need to purchase, at a minimum, unemployment insurance, and workers compensation insurance. You may need other types of additional coverage as well depending on industry and location. Most small businesses are advised to purchase a business owners policy or general liability insurance. General liability covers bodily injury to yourself or a third party and/or property damage. Professional liability insurance is something that you would want to purchase if your business provides a service. It covers you if something is done wrong or neglect to do something causes a chain of events that could lead to a lawsuit. Without this insurance coverage, your business could fail with one small mistake.
When you’re starting a business you are more likely to focus on what must go right instead of what could go wrong. Both considerations need to be brought up. The risk is an inherent part of dealing with customers and it is a part of any type of business ownership. You need to account for risk and purchasing a small business insurance policy is the best way for an entrepreneur to manage and mitigate some of the risks of day-to-day operations. Each insurance company is different with different limits of protection and price points, so avoid the confusion by asking an agent which insurance coverage is the best for your type of endeavour.
Build your brand
Before you start selling your professional service or product, you need to build a following and brand to get people ready to come to your new business or buy your new service. A logo that can help people easily identify your brand and can be consistently used throughout your advertising platform will help leave a mark on people’s minds. Using a company website and social media to help spread the word is a key promotional tool. Use coupons and deals to offer discounts to new users and followers once you launch. Spread the word with the internet and make sure to use keywords to pop up in search engines when a new customer is looking for a service or product. A marketing plan goes hand in hand with the business plan to get the word out about your business. This process is just as important as providing a quality experience for the consumer. Without proper marketing tools, there is no consumer to sell to. If people don’t know you exist it is impossible to gain customers.
Your first sales and launch are just the beginning steps of your tasks as a small business owner in order to stay afloat and make the profit you need to be able to grow your new business. You will get out of your business what you want if you put the effort to continue to grow it. These are just some of the beginning steps of becoming an entrepreneur. It is an ongoing process that takes many years to get to a successful and profitable point. The main point is, DO NOT GIVE UP! If it fails the first time, you must try again, as in every aspect of life.