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10 Steps to Follow When Starting a Small Business
Deciding to start a small business can be one of the most exciting decisions you can make in your life. The start phase of a business has so many parts to consider and manage that it can get downright confusing. And if you have never done it before it can quickly get you frustrated to the point of wanting to give up. But don’t give up; you should know that starting a new business has some basic steps that all up and coming entrepreneurs need to follow in order to get their business started.
Here are 10 steps that provide an overview of the basics that are required to start and operate any small business. Take one step at a time, and you will soon be on your way to owning your very own successful small business.
1. Come Up With a Business Idea
Every successful business started with an idea. The personal computer, the cell phone, hamburgers, coffee, you name it, it begin with someone coming up with an idea for it. How do you come up with ideas? You can get an idea for a new business by just keeping yourself alert to the ones that’s already around you. Literally everything around you is a business. Look at your car; think about all the businesses that go into assembling your car. Look at your home; think about all the businesses that go into making the home you live in. Ideas are all around you. However, when deciding on your business idea, just make sure you choose one that you have a passion for.
2. Do Your Research
Okay great, you came up with your million dollar idea, now it’s time for research. In order for your idea to become a successful business, it has to do three things, solve a problem, fulfill a need or offer something the market place wants. There are numerous ways to go about finding these things out, some of the ways include, research, focus groups, examining market trends, it can even be done on a trial and error basis. Here are some of the questions you should answer to see if your idea has passed the mustard test:
- Is there a need for my product or service?
- Who are the people who need it?
- Are there similar products or services out there?
- Who are my competitors?
- How will my business fit into the market place?
3. Come Up With a Business Plan
Okay, so you did your research and came to the conclusion that your business idea is pure gold, now what? Do you just jump in and start your business right away? No, you will need a plan; you wouldn’t just get in your car and decide to drive to a faraway place you’ve never been before without looking at and examining a road map would you? Exactly, starting a new business is the same way, you will need a road map for your business you will need a business plan. “Why do I need a business plan, my business is brand new?” I can think of several reasons as to why you need a business plan, and here are just a few:
- A business plan will bring your business into reality. Right now your business only exist in your head, sitting down and putting it on paper means you are serious about getting this done and that you can actually see it on paper and that it’s not just a thought anymore.
- If you are thinking of seeking financial support from banks, investors, or any other financial institution a business plan is a must have.
- A business plan gives you focus and clarity on what you need to achieve in your business and how you plan to get it done.
4. Get Financing For Your Business
Depending on the small business you probably will not need a lot of money to start it, but it will definitely need an initial investment to get it off the ground. Again there are numerous ways to find funding for your new business and here are some ways:
- You can Finance your new business venture
- Apply for a small business loan
- Apply for a small business grant
- Angel Investors
You can try any of the above methods to get money to start your business. You can also attempt bootstrapping your business to get it off the ground. Good thing with bootstrapping is you won’t have huge debt from loans you’ll have to pay back, or people over you such as investors nagging you about their investments.
5. Choose a Business Structure
In starting your business you are going to have to pick a business structure, now it’s crucial to choose the right business structure for your business, because this will affect how much you pay in taxes, handle business investments, your liability and financial security in your business. You have four business structures to choose from, sole proprietorship, partnership, limited liability company (LLC) or a corporation. If you are not sure or comfortable in making this decision makes sure to seek legal and professional help.
6. Name and Register Your Business
Picking the right name for your business is crucial. Your business name will play a vital role in every aspect of your business. Make sure you take the time to research and explore different names and see how they correspond with what you are trying to do. Once you have made your choice for a name, you should ensure it’s not trademarked or already in use. Once you ensure everything is okay, you will need to register your business name. If you chose as your business structure, a sole proprietor, then you must register your business with your state or county clerk. For Corporations, LLCs, or limited partnerships,check with your state's corporate filing office. You then will fill in blanks in a preprinted form listing the purpose of your corporation, its principal place of business and the number and type of shares of stock.
7. Obtain Licensing and Permits
Depending on the type of business you have chosen to start, you may need additional licenses and permits. Do your research and check with your state and local governments as to what licenses and permits you will need to open and operate your business.
8. Select a Location
You have heard those three words before when it comes to business, location, location, location. Setting up your place of business is crucial to its proper operation and success, whether you will be doing it in a home, a shared or private office space, or a retail spot. You will have to keep in mind such things like location, supplies, accessibility, equipment and overall setup. Wherever you choose your location, just make sure it works for the type of business you are doing.
9. Setup an Accounting System
You will need to come up with an accounting system for your business. An accounting system will be necessary in order for you to create and manage your business budget, set rates, send out invoices, conduct business with others, and file your taxes. You can look into such programs like QuickBooks and try doing it yourself, or you can hire an accountant to do it all for you.
10. Promote Your Business
Once you have gotten your business up and running. The next step is attracting clients and customers. You will want to start with writing a unique selling proposition (USP) and then coming up with a marketing plan. In your marketing analysis you may explore such ideas as:
- Web Design
- Business cards
- Elevator pitch
- Promotional products
- Direct mail
- Internet search marketing
These 10 steps can be applied to any small business, once you have completed these basic start-up requirements, you will be well on your way to small business success. Good luck!