Tips on Starting a Small Business
Posted on June 8, 2012 by Lola Rotimi-Sosanya
Contributor: Jessica May
Starting a small business can be very stressful and time-consuming experience. There are a plethora of details that must be considered and a multitude of tasks that must be completed before the business can actually be made public. This article contains several tips on starting a small business. With these information, any businessperson can be prepared to embark on the journey of starting their small business.
Finding the Right Fit:
First, all entrepreneurs should consider if starting a business truly fits in with their lifestyle. While many crave to be their own bosses, this arrangement also comes with many risks. Obviously, the financial risk is a major issue to consider. While the business may become successful, there is always the chance that it will not remain profitable. When planning a small business, start slow. While it may be tempting, it is not always a good idea to quit all other work entirely. It can be extremely beneficial to have an additional paycheck during the difficult planning stages of a business. Additionally, consider the time that will be spent organizing the new business. If an entrepreneur does not have the time to devote to the business, it is less likely to succeed.
When thinking of an idea for a new business, focus on needs that individuals have or a market that is not being filled. Think about the platform of the business. While, traditionally, businesses have a brick and mortar location, many new businesses are located online. Above all, it is important that the subject matter of the business is something that entrepreneur is passionate about. In the first few months, lots of time will be needed to maintain the business properly. It is imperative that the business is something that can be a lifelong passion, not just a passing whim. Also, be sure that there are sufficient funds to keep the business afloat. The first years of a business are not always profitable and entrepreneurs should be prepared for that possibility.
Finding a Mentor:
Finding a mentor to serve as a guide through the hardships of the business world can be an invaluable asset to an entrepreneur starting a small business. This person is an experienced business professional who has probably experienced all of the complications that come with starting a business and has overcome all obstacles successfully. While it is important to find an individual who has demonstrated skill and success in the business world, it is also imperative that the mentor and mentee have a connection and create a good rapport. This will facilitate a possible lifelong relationship in which the exchange of helpful advice and networking take place. Resources that match mentors with new business owners can be found at score.org.
Creating a Business Plan:
The business plan is one of the most essential aspects of starting a new business. This is the stage when business is organized into practical plans and data. Through developing a business plan, the difficulties and strengths of the business can be assessed and the “who, where, what, when, and how” questions can be decided.
Choosing Business Type:
During the planning stages of a business. it is imperative that a business type is chosen. There are three main types of businesses: sole proprietorship, partnerships, and corporations. Obviously, if the business is being created by a single individual, a sole proprietorship is the most logical choice. However, in a sole proprietorship, only one person is responsible for the entire liability of the business. For more security, try a partnership or corporation where the liability can be equally spread among a group. Partnership are perfect for small groups of individuals who would like to equally divide responsibilities. Corporations can include large numbers of people and can even be made publicly traded so that others can purchase stock in the company.
Registering your Business Name:
You will need to choose and register your business name with your state government. Getting a tax id number, registering for state and local taxes, getting business licenses and permits (if required) and understanding employer responsibilities. A tax id number or EIN can be obtained through the IRS. Just like personal income taxes are collected every year as a business owner you are responsible for paying business taxes to register simply call your local IRS office.
There are many ways to finance a business. Some entrepreneurs may have the personal funds to manage the start up and running costs of the business. However, loans from family members and friends can also be acquired to help with the finances before the business takes off. Also, consider applying for a bank loan. While this involves paying interest, it is a guaranteed and reliable source of funding that can be extremely valuable during the start of a business. Additionally, try applying for assistance from venture capitalists or angel investors. If they like your business idea, they put a lot of time and money into helping it thrive. However, the chances of getting chosen by a venture capitalist firm are very low. Before starting to actually purchase items for the business, make sure that there is a definite plan that outlines where the money is coming from and know how much of it is needed.
Business Laws and Regulations:
Make sure to check state and federal laws and regulations that may apply to the business. Special certifications also be needed. It is important to always conduct business in an ethical and safe manner. Visit sba.gov for more information about specific laws that apply to various types of businesses.
The marketing plan is extremely important as it drives traffic to the new business. Make sure to portray the business in the way that you want it to be perceived. For example, if the business is a family-oriented organization, offer discounts for young children. Also design the marketing content in the same style as the business interior. Keeping things consistent helps develop a brand that customers will recognize. Also choose the mode of marketing. This can include print, television, radio and online advertisement.
Visit sba.gov for more information to guide new entrepreneurs through the obstacles that come with starting their own businesses.