United States has over 28 million small businesses. This represents about 99.7 percent of the total number of businesses in America according to the reports of Small Business Administration. Starting a business may somewhat be challenging or exciting depending on your approach. Most small businesses fail within the first one year of their existence. This is one of the reasons why it is an excellent idea to start small.
Owning your own business may bring to you that financial freedom you desire. It is not everyone that enjoys the 9 – 6 working stuff. Businesses are set up to solve a particular problem or challenge. When you look at your surroundings, you will notice some of the problems your business can solve. You plunge into such areas. Nevertheless, some people are somehow destined to be engaged in a salaried job by entrepreneurs. We will discuss some tips to follow in order to ensure that you setup a successful business.
Research Your Business Idea
You need to conduct thorough and extensive researches on your business idea. Test it if the business idea actually holds water. There are certainly some business models that are not weighty enough to generate consistent income to maintain their operations.
Research on the businesses existing companies in the industry, their products and services and how they are fairing generally. Look at the possibility of coming out with better, cheaper, faster or higher quality products. You may need to refine your idea more and more to make it more endearing and quite feasible.
Write A Business Plan
This is a very important aspect of starting a business. There are certain questions you need to answer. What is your business trying to achieve? What is the goal of the business or what problem are you trying to solve? How do you cater for the start-up capital? All these questions will be answered in a business plan.
A standard and professional business plan comprises of nine sections. They are:
- Executive Summary
- Target Market
- Products and Services
- Marketing and Sales Plan
- Milestones and Metrics
- Company Overview
- Management Team
- Financial Plan
If you are not familiar with the preparation of a business plan, Business Plan Professionals will take the hassle of you by writing a comprehensive standard business plan for you right from the scratch.
Plan Your Finances
There are certain costs you have to incur even at start-up or prior to commencement. These are pre-incorporation expenses. You have to decide how to settle all these expenses. The major challenge face by most start-up companies is how to finance its cost of operation. Some run out of cash too soon. The companies run into shortage of fund before its start generating enough money to finance its operation.
How do you want to provide funds for the operations of the company? Do you have enough personal saving to take care of these expenses? Do you want to borrow from a bank or bring in investors to the company?
It is actually not out place to run into cash flow problem but with proper planning you can succumb this trial period of your business set up without getting your fingers burnt. Avoid over spending at the initial stage especially for office setup.
Many finance options are opened to an entrepreneur. You can choose any of these that best suits your situation and are available to you. These options include:
- Small Business Loan
- Small Business Grants
- Leasing of Equipment
- Mortgage Loan
- Angel Investors
- Venture Capital
- Going into Partnership
- Pitch Your needs to Friends and Family
- Credit Cards
- Bank Loans/Overdraft
Create Your Business Legal Structure
You need to make it official and register with appropriate government institutions. If there are licenses to obtain please don’t shy away from this. Determine which business structure you want your company to take. There are, of course, several of them. These are:
- Sole Proprietorship
- Limited Liability
- Public Liability Company
Choose your Business Name and Register it
The name of your business is part your company branding. It is very essential you choose a good one. You need to conduct a search at the appropriate authority, whether the name is currently being used or trademarked. If it is available then continue with the registration.
It is also important for you to register the domain, that is, the name of your website at the same time. The reason is that any other person can register if you leave at this point. It is not usually expensive. Other things you need to do at this stage are:
- Register for Federal Tax ID
- Also State Tax ID
- Apply for the necessary permit/license
- Open your company bank account
- Apply for Trademarks, copyrights or patents as the case may be
- Buy an Insurance Policy for your business.
Build Your Team
Even if you are the only employee at commencement, you will need to bring more workers to build your team as the business grows. It is your responsibility to work out how the team will work together; share responsibilities and the way you drive home your corporate goals and mission down to your employees’ minds.
The employees are very important in your organization too. Your products are built by these people.
Setup your Accounting System
You may not have the knowledge of doing this. There are professionals even freelancers that you can engage to do some of the more technical aspect of your business setup like the accounting system, accounting policies etc. It is also good if you can adopt the use of a robust accounting software.
Endeavour to put things right from the beginning. Good record keeping will give you the opportunity to have access to the right information and data for management decision making.
Choose your vendors or Build your products
You and your team cannot do it all alone. This is why some third-party organizations are involved. Carefully choose your vendors who will add the required qualities to your products and services within your budget. These third-party organization access to some sensitive information in company. Please be cautious how you deal with them or divulge information about the company to them.
Set up Your Business Location
Set up your office location. I have to remind you that you should do this as budgeted. You don’t need to be very extravagant here. Purchase only things that are necessary for the running of your business. Be as close as possible to your target audience. Though, this is somewhat pretty difficult, but if you can, please do.
Promote and advertise your business
This is very important. Let people know about your company or the brand, products and services. Social media are a good place to do this. Open accounts on the major relevant social media where your target audience often visit or do their networking. Knowing your target audience demographics – their interest and location – will assist you in determining which social media network is best for your ads placement and meeting your potential customers.