How to Start a Small Business
For many people, starting their own small business is a dream come true. If you have the entrepreneurial spirit and would like to either make a decent part time income or create a full time job for yourself then a small business could be the perfect opportunity.
It is quite easy to start your own small business and in some cases you can be in business in less than a day. However, if you are interested in creating a well thought out small business opportunity there are some things you should consider.
What is a small business?
The term small business really varies; for some a small business could be one that has employees less than 25 people and generates less than 5 million dollars per year in revenue. To others it is a business that only one person works at that and provides only a few hundred dollars per month in profits. Since the definition of small business varies, it is really up to you on what you consider a small business to be.
Deciding on What Kind of Small Business to Start
One of the most important aspects of creating a small business is deciding which products or services to sell. In order to be in business, you have to offer something for sale. This aspect can vary widely. For instance, you can sell items on eBay (Learn how to sell on eBay), you can create gift baskets and sell them to your friends in your community, you can open up a small convenience store and so on. The type of small business that you decide to start will ultimately determine the many aspects of putting it together and running it.
Choose Your Business Entity
While most small businesses are sole proprietorships, this doesn’t have to be the case for your specific enterprise. No matter how small your business is, you can legally make your business entity a corporation or Limited Liability Company. Corporations and LLC’s offer the protection of liability when conducting business. This means that you are not personally held liable for what your business does. For instance, if your business is sued, your personal saving is safe. While setting up a corporation or LLC can be time consuming and costly, they are well worth it. Today, you can incorporate or create an LLC for as little as $500.
Create a Business Plan
One of the most important resources available to help you get your business on the right track and fully think things through is a business plan. Think of a business plan as a roadmap. A business plan is a document that you create in order to make sure you put in enough thought and analysis regarding your business. Business plans can alert you to some weaknesses that you may have never thought about, they can also bring out strengths. Creating a business plan is quite possibly the most important aspect of creating a business.
Financing
The good news about small businesses is that many don’t usually require lots of financing, however, some may cost more than others. Your specific business will ultimately determine the start-up costs and the amount of financing involved. E-commerce websites can cost only a couple of hundred dollars to set up and you can start selling your products or services. However, other types of businesses such as a clothing store can cost several hundred thousand dollars.
Financing can come in many forms. It can come in the form of personal savings or credit cards; you can also take out a personal loan or a business loan. While business financing in some cases is easy to achieve, obviously the more money you need the harder it will be to find financing.
Setting up Shop
Once you have a business idea, a plan of action and the financing available, you can start setting up shop. Setting up shop might include finding a location, buying inventory, getting the necessary licenses, permits, tax ID’s, etc. For certain small businesses, you might have to hire a few people and this can be time consuming and sometimes expensive.
Once you have everything in place you are almost ready to launch. You just need to get the word out about your products and services.
Market and Advertising
Now that you are ready to launch, you will need to focus on selling your products and services to customers. One of the most effective ways to accomplish this is to understand your business and the market environment. Knowing your business products and services will enable you to focus your advertising on specific groups of people (demographics) that are more likely to be interested in your products and services than others. For instance, you wouldn’t advertise your donut shop to those interested in fitness and body building. Choosing your market and then advertising effectively to it can make the difference between your small business failure and success.
Business Upkeep
Now that you have launched your small business, the work has just begun. The upkeep of a business is essential for it to be running smoothly and profitably. It is important to continue to put lots of effort and thought into your business once it launches. However, a well though-out, planned and organized business can be the key to one’s financial success.