26 Apr How to Get Your Small Business Started and On the Path to Success
If you’re underemployed, unhappily employed or bursting at the seams with a brilliant idea, starting your own small business probably sounds very exciting. And it should – being your own boss can be very fulfilling, giving you a means to meet your financial goals and be in control of your schedule and future. All in all, starting a business is exhilarating, but it’s not without challenges.
According to Bloomberg, 80% of entrepreneurs who start a business fail within the first 18 months. That doesn’t mean that your business won’t be a success or that your idea isn’t the next best thing since sliced bread, but it does definitely make a case for making sure you’re prepared before deciding to go it on your own.
Here are 5 steps to help you get your small business off on the right foot.
1. Develop a business plan
Don’t discount the need for a road map for your business. Writing a business plan might seem like a waste of time, especially if you don’t need a business loan, but it’s very important that you have a firm sense of direction for your new venture. By setting goals now, and updating them along the way, you’ll feel confident about where your business is headed. Try to think 3-5 years in the future and break your business plan into several categories, i.e. one for marketing, another for financial projections, etc. Check out the Small Business Association’s Business Planning Guide for an in-depth lesson on drafting a business plan.
2. Get help locally and nationally
Even though one of the benefits of owning your own business is that you get to be in control, that doesn’t mean you have to go it alone. There are a TON of resources nationally and locally to help ensure your business is a success. Use them!!! The SBA SCORE program is a great place to start. SCORE offers free mentorship and counseling for entrepreneurs and aspiring small business owners. You should also see what’s available at your Small Business Development Center, Women’s Business Centers, Veterans Business Outreach Centers and through the US Chamber of Commerce.
3. Location, location, location
A lot goes into choosing the right location for your business. First, consider your needs. Ask yourself if the prospective location fits with your brand image, is compatible with your growth projections, can be accessed by suppliers and has a workforce suitable for your business. Try the Bureau of Labor Statistics’ Labor Demographics tool to learn more about your potential workforce. Take a look at the other businesses in the area – are they complementary or competitors? Consider different demographic tools, such as American FactFinder, to learn about consumers in your prospective area. Other considerations may include rent, taxes, minimum wage, parking, government economic programs and local regulations.
4. Figure out financing
For many of us, this is the golden question. How will you finance your small business? You may decide to get a small business loan, rely on savings or maintain a full-time job until your business turns a profit. Before applying for a loan or grant, take the time to completely assess your finances. Figure out how much money you’ll realistically need, understand your risks and consider your start-up and expansion costs. The SBA Loans & Grants page has some great information on financing options and how to apply.
5. Register your business name and get a tax ID
Congratulations! By this point, you’re almost a small business owner! If you haven’t decided on your business structure, now is the time. Are you going to incorporate, register as an LLC, form a partnership or take a different path? Different business structures have different pros and cons. Take a look at SBA’s Incorporating Your Business page to learn about your various options and their different tax implications. Next, register your “Doing Business As” name with your county clerk or state government. Here’s a list explaining how to Register With State Agencies. Not all states require an Employer Identification Number, but if yours does, head over to the IRS State and Federal Online Business Registration to get one. Depending on the state you plan to do business in, you’ll also need to register with state tax authorities and apply for permits or licenses. The tool explains more about the permitting process in each state.
As you’ve probably realized by now, starting a small business boils down to doing your research. Even the best idea can be a flop without a bit of planning and forethought. Luckily, there are tons of resources available to help you get started. Visit the SBA Learning Center for more information on training and to learn out more about services for small business owners in your area.