What Do I Need to Start a Small Business?
Did you know that there are currently more than 30 million small businesses in the United States? Starting a new small business is a complex process, but it’s an exciting opportunity that you don’t want to overlook.
If you think entrepreneurship is the right opportunity for you, there’s never been a better time to follow your ideas and get started.
Where do you even begin the process, though? This guide can help you find the right path forward.
Taking the First Steps
The first thing you need to know is that starting a new small business means lots of planning. There will be plenty of financial decisions to make, lots of research to complete, and a great amount of data to analyze.
The most important thing you can remember at this stage of the game is that every small business is different. There is no one single model that applies to all of them, so if a step forward doesn’t seem to be the right one for your company, don’t take it.
Begin by evaluating your own mental preparedness to start a business. While there’s never a perfect time, you’ll need to make sure you can handle the tasks ahead.
Understand if your mental mindset is right and whether you’re at a good place in your career and your finances to begin a business.
From there, you need to find the right business idea to help you get started. You may already have a passion for something that can be easily turned into a company, or you may not yet know what you want to do.
If you’re a bit lost, you’ll want to start with a list of things for which you’re already passionate. Google Trends is an excellent way to know what’s trending currently and what’s already on the downhill slide.
For example, if you’re good at working with your hands, perhaps you’d like to be a handyman or a woodworker, or maybe sewing is the right opportunity for you.
If you’re better at technology, a web developer could be the right path forward or even an IT repair service. There are hundreds of business opportunities out there and deciding on the right one for you has to be one of the first steps in the process.
Build Your Business Model
Once you know you’re in the right frame of mind and you’ve identified an opportunity that is right for you, the next step is to choose a model that works to meet your needs.
The freelance model is quite common today and in this model, you’re offering some kind of service to other individuals like web design. It’s a relatively easy model to start on your own and the startup costs tend to be minimal with this model.
If you’re not offering a service, you may want to open an eCommerce store or a physical location to help market your products. There are many options for eCommerce platforms, like Shopify, that will easily allow you to build a website to sell your products online. Alternatively, finding physical retail space isn’t too difficult either.
Once you know what you want and how you plan to set your business up, you need to begin the research phase. Start by clarifying your target market.
These are the people you are going to serve. Do as much research as possible so you understand exactly what they might want, why they want it, what they are willing to pay for it, and when they want it. Know their problems, and understand the solution you are offering as deeply as possible.
Knowing your target market is just part of the information you’ll want to gather. You’ll also want to do some research so you can build more realistic goals for your company.
What is your break-even point? Where do you hope your business is in a month? In a year? In five years? Setting SMART goals for your company – those that are specific, measurable, achievable, realistic, and timely – is going to be an excellent way to know what you want and clarify it.
Build a Business Plan
Your business plan should be the next natural step because it takes the research you’ve already completed and compiles it into a clear document.
This document not only helps keep you on track but may also help investors or banks decide to fund your company.
As you write your business plan, be sure to detail the following:
- What problem is your company solving?
- What do you do?
- Who is your target audience?
- Analyze your strengths and weaknesses (S.W.O.T.)
- How do you plan to promote your company?
- What do your finances look like?
Show this plan to a mentor or a coach to get some feedback so you can revise it and move forward.
Not every business will need funding to get started, but most will. Some people pay for their business with another job, but if you can attract investors or even get a start-up loan from the bank, you may not need your current job to get started.
Do what you can to keep costs at a minimum until your business begins generating a profit, and try to work with a financial partner you trust from the outset.
Register and License Your Company
Once you have your business plan in place and have the funding you need to move forward, the next step to move from a business proposal idea to reality is to register and license your company.
You’ll need to register your company with the federal government, your state, and (in most cases) your local government as well. Be sure to choose an appropriate business structure (like an LLC or S-Corp) with the help of an attorney and an accountant before you register your company.
Licensing will depend a bit on the industry you’re in. If you’re starting a simple eCommerce store, for example, there’s likely no license required. If, on the other hand, you plan to open your own plumbing company, you may need several different types of licenses.
Open Your Doors
Once you’ve followed these steps, the last thing you need to do is begin attracting customers! Do what you can to market your business with a website, social media, and print advertising.
When you have customers, encourage reviews and repeat business, too, to help establish your services.
There may be over 30 million small businesses already out there, but yours can add to that total. With the right idea and this guide on your hands, you could begin working with potential customers in no time!
Contact AMB Performance Group today for help creating systems specially designed to work for your unique business.