Ten Tips on How to Start a Small Business
What business do you want to create? And why?
Knowing both is important. Do you crave working without a boss? Want to make your own hours? Do you have an innovative idea for a product? Do you want to offer better service than your old employer? What will your ideal small business be like?
Make a plan and then make future decisions with your real goals in mind. They will keep you inspired and save time.
Remember that you will be responsible to your customers or investors even when you are your own boss. How will you make that work?
Take your time. The more thorough your planning, the better your business. Opening too soon without a firm foundation is more likely to make the new business shaky.
You can do an online search for planning tools.
Make a professional business plan covering financing, marketing, anticipated needs and costs, and a reasonable timetable.
Know your skills and know your limits.
A good business plan takes both into account. Are you great at planning and starting things, but not as spectacular after things get going? Are you better at accounting than marketing? How are you with current technology?
Make two lists and be honest with yourself. Knowing what you do well will keep you inspired when things get tough. Knowing what you need help with will keep you on the lookout for the best advisors and colleagues.
Check out the current market. Are there similar businesses in your area? How will you compete?
Decide what sets your business apart from others. Is it the brilliant new product? The quality of your service? Your particular marketing niche? Focus on what will make your new venture stand out.
What help will you need to get started?
Decide what you need to learn before you start your small business. Find experts and develop a timetable for gathering the knowledge and resources you need.
The government can help. Check out the Small Business Administration and the Internal Revenue Service online or at local offices. There are various divisions in each agency that offer information and advice for small business owners.
Look for training programs for entrepreneurs in your area or online. Even if working for someone else has made you an expert, you’ll find helpful ideas and save yourself a few headaches.
You may want help with marketing plans, a logo or other graphic art, your communications system, computers and a web site, or the design of your new work space.
Hire an attorney. There are a lot of legalities to consider.
What is in all that fine print, anyway? You need an expert to interpret it all.
All lawyers are not alike. Be sure to find one who knows business or corporate law. Find an attorney you will like working with. Ask about fees and retainers upfront. Most attorneys offer a free initial appointment to talk about their services.
More things to think about: What kind of corporation is best for your business? What are local and state regulations? Do you need to register the name of your business? Will you need contracts for employees?
Check any non-compete agreement you may have signed with a previous employer.
Figure out the money. In general, you need working capital: enough to start the business and keep it running for at least a year. Remember you need an income, too.
The Small Business Administration can help you figure out what capital you need.
Decide how you will raise money. You can use your personal savings, borrow, find stockholders and sell shares, find partners, or get creative with other solutions. You will find plenty of suggestions online.
If family and friends are investing in your business, be sure you have a written agreement with each person. It’s best to have your attorney approve all agreements and contracts.
Think about the cost of your space, utilities, remodeling, signage, safe working conditions, supplies, merchandise, furniture, and equipment. They all take money and time.
Consult an accountant and learn what records you need to keep. Then keep them up to date.
This includes all expenses of researching and starting your business. You’ll want the records at tax time.
If you hate record-keeping, you probably won’t do it. Find a bookkeeper. You can hire one who works out of their own office to work for you a few hours a week.
Find the right space. It may be as elaborate as a manufacturing space or prime-location storefront or as modest as your garage and home office, but it needs to serve you well.
If you are opening a retail shop, spend time in the neighborhood on weekdays, evenings, and weekends. Observe the traffic patterns, parking, foot traffic, and demographics of shoppers. You don’t want to be marketing baby clothes, for instance, in a neighborhood frequented mostly by senior citizens.
Put your marketing plan in action and open the doors.
Stay inspired, remember your original goals, and have a great time in your new venture.