You’ve decided! It’s time to start your own business. But where do you start and how do you manage it?
One of the first steps is to do a little research. You probably already have an idea of the product or service you want to provide so now it’s time for a reality check. You need to see if your idea is feasible. In order for a small business to be successful, it must solve a problem, fulfill a need or offer something the market wants.
How do you identify a need for your idea? You can do google research, focus groups, interviews, questionnaires, and even small trial and errors. While you explore the market, keep these questions in mind:
Is there a need for your anticipated products/services?
Who needs it?
Are there other companies offering similar products/services now?
What is the competition like?
How will your business fit into the market?
Who are my top competitors?
Once you have a realistic idea of what you want to do and understand the market’s needs and how your idea will fit into meeting these needs it’s time to make a plan. A business plan is a blueprint that will guide your business from the initiation phase through establishment and eventually business growth. You need to think strategically and with a long view. Where do you want to be in 3-5 years? Always start with the end in mind.
There are different types of business plans for different types of businesses. If you need financial support from an investor, a traditional business plan is standard. This type of business plan is usually long and thorough and has a common set of sections and steps that investors and banks look for when they are evaluating your idea.
If this is not the case and you don’t need financial support, a simple one-page business plan can give you clarity and enough direction. You will still need SMART goals. These are goals that are Specific, Measurable, Achievable, Relevant and Time-Based. Goals that do not have these specifics in them are just wishes.
Once you have the plan written down, it’s time to plan your finances.
You won’t necessarily need a lot of money, but you will need some investment to be able to start your business and keep it going before you start to make profit. Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, grand opening events, property leases, etc.), as well as what you anticipate you will need to keep your business running for at least 12 months (rent, utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.). Those figures when combined is the initial investment you will need. There are a few ways you can fund your business: small business loans or grants, financing, angel investors, and crowdfunding are some examples. I recently started another business and it costs less than $300. It’s a simple home-based business and I’ll use my network to sell. I’ll take the profit and then use it for marketing and growth. Bottom Line: Don’t let money be the reason you don’t try. You can always start small.
Once you have the initial investment and it is clear how you are going to manage this money, the next step is to Choose a Business Structure. Your small business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The business entity you choose will impact many factors from your business name, to your liability, to how you file your taxes. Then it will be time to Pick and Register Your Business Name. Your name needs to be a good one. Something that represent your business, easy to remember, and catches the eye. Keep in mind that before you choose the name for your business you need to see if it’s trademarked (currently in use) and then you need to register it. You’ll need to register with your State. They will have a free website to search your business name. Additionally search here https://www.uspto.gov/patents/search to ensure you are not infringing on a patented name or trademark.
The next step it’s to get Licenses and Permits. In other words, all the necessary paperwork to keep your business legal and out of trouble.
There are a variety of small business licenses and permits that may apply to your situation, depending on the type of business you are starting and where you are located. You will need to research what licenses and permits apply to your business during the start-up process.
You’re almost done! But remember to choose your accounting system. This is necessary to create and manage your budget, be on top of prices, taxes, and anything money related. After this you’re ready to Set up your business location, get your team ready (hiring and training time), and PROMOTE your business. Promoting is the “last” part of your journey when starting a small business but it’s very very important. This is when you start to attract people and customers. Explore as many small business marketing ideas as possible so you can decide how to promote your business most effectively.
Listen to our Podcast "Diapers and Deployments" episode 8 for more information. Don't forget to tell you friends about Skillmil. Have them fill out a profile today at www.skillmil.com.
Here are a few more websites that may help you on your journey: