Starting a successful small business can be daunting and challenging, but it doesn’t have to be.
You can make your dream a reality with the right research and resources.
This guide will provide essential tips and advice on everything from understanding your market to forming legal entities.
Research Your Market and Set Goals.
Before starting your business, take time to do some in-depth market research.
To narrow down your market research, focus on niche industries and think about any unique features or services that you could provide to stand out from the competition.
Researching your target market will also give you insight into their needs and wants, which can help you craft a business plan that meets those needs.
Once you're armed with this information, set attainable goals for yourself.
However, market research only provides an idea of the general environment surrounding your business.
If you have a specific product or service offering, getting feedback from people who would be interested in buying it is important.
Conduct interviews and/or surveys with potential customers to discover their concerns and how your product or service can better meet their needs.
Set realistic, attainable goals that are unique to you and your business. Be strategic when planning out your specific objectives or milestones you would like to accomplish weekly, monthly, or quarterly.
If you don't want those great ideas to go unused, even if you're not ready for them, document them and save them for later. Everything from brainstorming ideas to market research reports, you never know how it will be part of your long-term business strategy.
Choose a Business Structure and Register It.
After choosing your business name and researching the industry, it’s time to make a business structure official.
Each type has different tax implications and requirements for filing paperwork with the state or federal government. It’s important to understand the differences between each type to make an informed decision about which is best for your business needs.
Common small business structures include sole proprietorship, LLC, Partnership, or Corporation.
What is a Sole Proprietorship?
A sole proprietorship is a structure that allows you to be responsible for all debts, liabilities, and financial obligations associated with your business.
What's an LLC?
An LLC limits your personal liabilities and can be owned by one or more people or companies. As a member of the LLC, you should also designate an official registered agent who will represent your company in any legal proceedings.
What is a Partnership?
A Limited Liability Partnership (LLP), allows you to share the ownership and management responsibilities with other partners. Unlike other partnership structures, there is no limit to the number of partners in an LLP so it can work for businesses of any size.
What's a Corporation?
A corporation is a business structure of individuals, stockholders, or shareholders. It also helps to minimize personal liability and works for larger businesses.
Additionally, you'll need to obtain an Employer Identification Number (EIN) from the IRS for tax filing purposes.
Before deciding, you should also consider the requirements and fees associated with each type of business structure.
After deciding on your business structure, you must register for taxes with the Internal Revenue Service (IRS).
It’s important to submit all necessary paperwork accurately and on time to comply with state and federal regulations.
Next, you'll need a business plan and a budget.
Create Business Plan and a Budget.
After completing your market research and registering your business, the next step is to develop a business plan.
This document outlines your goals and objectives, the strategies you will use to achieve them, and the expenses you need to cover to operate.
It also helps you manage cash flow and assess risks. Your business plan should include research on potential customers, possible locations for your company, financial projections, and sales forecasts.
Take time to create an accurate and detailed business plan that will give you a comprehensive overview of operations, competitive analysis, competitors, pricing strategies, and promotional efforts.
This is especially important if you need outside sources for financing. Many lenders and investors want to see that you plan to pay them back or make them money.
Another important step in starting a business has a budget in place.
A budget will help you know exactly how much money your business is generating. It will help you to create financial contingencies during weak economic periods.
This can mean setting aside money for times when business may not be as prosperous or securing backup financing for times when your regular funding source doesn’t cover your expenses.
It's important to have a budget, no matter the size of your small business.
Here are things you should consider:
First, determine what type of startup costs and operating expenses you'll have.
Second, if you plan to have employees.
Finally, don’t forget about marketing!
Even if it’s small expenditures on social media or advertising campaigns, make sure those costs are factored into the plan too!
Once you have completed a business plan and a comprehensive budget, it’s time to secure the funds.
Finances are one of the most important aspects of starting a small business, as expenses are associated with everything from office space and advertising to supplies.
The bottom line, you need money to make money.
Now there are several ways to get funding for your small business. However, don't expect to get it until you've been a business for a least a year or two.
Yes, you heard correctly.
Even many grant programs want to see you running an established business. The good news is that being established doesn't mean you have to have been in business for ten or more years.
According to some lenders and investors, established can range from one to five years.
That's not bad.
But while you're waiting to be established, know that most of your funding will come from you.
If you apply for any loan or line of credit, lenders will use your personal credit to determine if they should loan to your business.
That's just the way it is when your first start out.
In the meantime, you could be working on building your brand and social media networks.
Build Your Brand Through Social Networks
Having an online presence is essential for any modern business.
Use these channels to build relationships with customers and engage with them. Share updates about new products, services, or promotions and use hashtags to produce visibility.
Use digital advertising options like Google or Facebook to target potential customers with specific content related to your business’s interests.
The right content created and shared on the right platforms will be essential to spread your messaging, draw customers, build a loyal community, and ultimately achieve success.
Major Take Away
Starting a successful business might be one of the hardest things you ever have to do.
But with a little planning and patience, you can do it. Rome wasn't built in a day!
Also, Rome had a little help. Check out the series for entrepreneurs by Authority Magazine.