The new year is a great time to put your intentions to practice. If you have visions of starting a small business, you can take practical steps to make that dream a reality. By taking time to plan, research and carefully execute your business idea, you can develop something that's a financial success as well as a personal passion.
1. Research and Create a Business Plan
The idea behind market research is making sure people will buy what you want to sell. All is not lost if the market doesn't seem ready for your product or service; you can simply make a few changes in order to meet a consumer need.
To do market research, identify the demographic of who will buy your product. Then look at where you plan to sell and how many people fall into that demographic. Do your industry research by learning as much as possible about similar businesses that have succeeded or failed in your area and try to figure out why.
The U.S. Small Business Administration has a "size up" tool that helps you to compare your ideal business to what's already out there. Using this tool, try to generate ideas and perhaps tweak the direction that you intended for your small business.
After you've done your research, create a business plan. This document gives an overview of the company, including your market research and financial projections. As your business grows, you may modify this business plan to reflect changing realities.
2. Ensure You Are Financially Ready
Before you hit "go" on the business, have your financials in order. You can't predict the future, but you should have a good idea of how much inventory you'll need to start, your marketing costs, website and other overhead expenses.
You should have not only this cash in the bank but also enough to keep the lights on and to fill orders if the business takes off. Put together a spreadsheet of startup costs and how much you'll need to keep things going.
Managing cash flow is essential for staying in business. Instead of just managing financials on a monthly basis, look at your business accounts on a daily or weekly basis. Profitability is great, but it doesn't automatically translate into healthy cash flow.
3. Pick a Business Structure and Name
For tax and legal reasons, you will have to create a structure for your business, such as a partnership, limited liability company (LLC), corporation or sole proprietorship. You structure may change as your business grows and people exit the organization. It's also essential to pick a name that's not already in use by another company and that's also consistent with your brand identity.
4. Get Appropriate Licenses and Permits
Your state and municipality will require that you get a license to do business. Depending
on your industry, you may also have to pay a fee for certain activities. Look at the small business website for your state or local chamber of commerce to know what you have to do to avoid hefty fees later on.
It's a good idea to think about licenses and permits well before you plan to open your doors. Depending on what you plan to do and the amount of red tape, it may be months before your permit requests receive approval.
5. Find a Location and Set Up Your Team
The early days of your operations are crucial. You're bound to make mistakes, but in order to make things as smooth as possible, you should have your administration in place before you start. This is true for a home-based business and one with a brick-and-mortar location.
If you are a brick-and-mortar business, consider factors including availability of staff, brand image, proximity to suppliers, rent and safety before signing a lease. You may move later on, but you want your first location to be as successful as possible. If you are more than a one-person operation from day one, ensure training happens before you open your doors so staff are ready to hit the ground running.
6. Consult a Business CoachA business coach gives you something your own research cannot: an outside view of your company with proven techniques to build success. The Entrepreneurial Operating System® is a holistic model that helps you identify, strengthen and connect the aspects of your business into a successful whole. Common questions about EOS can help you learn more about the benefits of one-on-one coaching.
7. Promote, Promote, PromotePut your marketing plan into action as soon as you're ready to get off the ground. The sooner you have customers, the sooner you can begin earning revenue and brand recognition. Don't delay getting your name out there when you can back it up with a great product or service. You can use digital marketing, word of mouth or non-traditional ways of advertising your new business.
Ready to Get Started?
Starting a new business could be on the horizon for you in 2018. Are you ready? You don't have to go about it without help. Talk to Chris today and see what he can do to ensure you are on the path to success.