Starting a small business can be a highly rewarding experience. For some it’s an opportunity to turn a hobby into a profession, for others it’s an opportunity to be your own boss. Although starting a new small business is exciting, it’s important to take the correct steps to optimize the chances that your business will be successful. The following article explains the steps required to start a small business.
Get an idea
A business requires a key idea. What are you selling? It’s important that your idea is something that inspires you to go to work, since starting a business is hard and requires a significant commitment.
Is your idea feasible?
Sometimes a hobby should remain a hobby. Other times it’s good to capitalize on something you enjoy doing by making a business of it. But how do you know? Doing market research is a good way to determine whether your business idea can be profitable. Market research can be done in many ways. Feedback from family and friends about the viability of your idea is a good way to start. Asking someone who doesn’t care about you is also a good idea since they will give you an honest answer to the feasibility of your business idea. A more advanced way of doing market research is to explore demographics and statistics of the area where you plan to do your business. The National Household Survey and the CENSUS provide up to date information and should be used to do market research about your business.
Write a business plan
A business plan outlines your business, how you will make money, your clientele and other relevant information. It’s important to write a good business plan because it may reveal any flaws in your business that were not clearly identified before you put pencil to paper. A business plan is also a must for acquiring capital to start your business. Banks and investors normally want to see a business plan before they approve any form of cash flow.
Registration and licensing
This step in starting a small business is the most complicated and often requires the help of a lawyer. You must register the name of your business and form a business entity to be able to legally use your business. It’s also advisable to hire an accountant to review your business plan and help with the financials associated with running your business.
Acquire the necessary funds
You have an idea, the idea seems to be profitable and you wrote a good business plan. Now what? You need to acquire the necessary funds to start your small business. Some businesses do not require much money, namely businesses run from home and Internet based businesses. Some businesses, namely those that require a store and supplies, tend to be more expensive. Keep in mind that minimizing the overhead cost of your business where you can is a good idea before you establish how profitable your business is.
The funds to start a business can originate from multiple sources. Personal savings, investments and bank loans are all good ways to finance your small business. Keep in mind that your small business carries risk, and you should not make any presumptions about the profitability of your business before you actual open your business.
Get to work
After all the above steps have been accomplished, it’s time to put the wheels in motion to open your business. Buy the supplies required to run your business and establish a good marketing strategy to raise awareness about your new business. Small businesses take time to grow and often are not immediately profitable. Patience and hard work are required to grow your business. Take this into account before planning to open a business.