Quick Steps to Starting a Small Business
Starting a small business in today’s economy can be intimidating, especially if this is your first business. You have your idea, now you need to do your research, create a business plan and organize your finances to give your small business the best chance for success. By following this step-by-step guideline, your and your business will be more prepared to take on the competitive market.
- Create a detailed business model: Your business plan is the foundation for everything in your small business; it will help you narrow down your goals and help you get financial backing. Business plans are usually 10 to 30 pages. Your plan should be very detailed; be prepared to show statistics and proof that your business will fulfill customer needs. Whether you approach investors or banks for money, they will want to know what is in it for them. Show them that your business is low-risk and how quickly they can expect repayment or a return on investment. This is your chance to prove yourself before you have even started!
- Register your business: Most small businesses start out with sole proprietorship. This means the business is completely yours and you are legally responsible. As the sole proprietor you will usually register with the city or county. You will also need to get an Employer Identification Number (EIN) that is necessary for taxes. For sole proprietors this generally means your social security number. It is important that you check with your local government for the specific rules in your area.
- The logistics: Although there are many logistics to starting a small business, these are some of the most important decisions.
- Business name: Find a name that makes you stand out from competitors. Check the Internet for other companies with the same name before registering your business. You want this name to just be associated with you.
- Business space: Think about the space that your business will require. The more space you rent/buy, the more money you will have to put in overheads (heating/cooling, electricity, etc.). Can your business work out of your home for 6 months or a year? This will help you save on costs. If you find a rented space make sure you research the surrounding area – does the area support your ideal customers?
- Business Insurance: Many first-time business owners think that they don’t need insurance. They are wrong. As a small business owner you need to take every precaution because if something unexpected happens it could mean losing a lot of money. The most popular insurances are: Business Property Insurance, Business Disability Insurance and Business Liability Insurance.
- Accounting: Most small businesses fail because they don’t have a good accounting system from the start. Hire a professional to get you started and walk you through accounting software setup. This should only take a few hours and then you can hire a bookkeeper to keep track of all expenses. This is an investment that can make or break your business.