So you want to start your own business? Congratulations, this is an exciting journey that will take you far. Yet, at the same time, you need to be prepared to put in the work. The Small Business Administration estimates that there are more than 28 million small businesses in the United States alone. This means big competition.
While every entrepreneur guru on Instagram and Facebook might have you believe that starting a business today is easy, that’s still not the case. Yes, the internet and our increasingly global economy make it easier to connect with your customers on a new level, but it’s still a competition to grow quickly and stand out.
Not every business is cut out for success. Only about two-thids of new businesses with employees survive at least two years. Are you up for the challenge? The good news is if you put in the work early on when setting up your own business, you’ll be in a better place to survive long-term. Here are 5 steps to starting your own business successfully.
Step 1: Do Your Research
You can’t start a business without first doing your research. What do you want to sell? Is there a need for this product or service in the market? Why would a consumer or business choose you over a more established business?
Research the market. Start by identifying the problem you’re attempting to solve. Just because you’ve experienced this problem before doesn’t mean it’s a big enough gap in the market to fill with your own business. What does the competition look like? Is the market already oversaturated, or is there room to make a name for yourself?
Step 2: Create a Business Plan
Many new business owners make the mistake of thinking business plans are only for large businesses. This couldn’t be further from the truth. Even if you’re just making a small, sole-proprietor business, you need a plan if you want to be successful.
If you don’t need financial support, you don’t have to go over the top with your business plan. A one-page plan that covers not only what you want to achieve, but how you plan to achieve it, will be enough. Your business plan should include the following things:
- What need is there for your product or service?
- How will you stand apart from your competitors?
- How will you produce your product or service?
- How much will it cost to operate your business?
- What is your marketing plan?
- What capital do you need to fund your business?
Depending on your plan, you might need to go more in-depth for some sections. For instance, if you’re manufacturing products, you’ll need to consider your production and distribution. Make sure you have all of your steps covered before moving to the next step.
Step 3: Choose Your Structure
This is the legal part of the business, and you might want to talk to a business attorney or advisor to get more input. Most small businesses are sole proprietorships, this means it’s just the owner. However, this leaves your personal finances on the line if you’re in a legal bind. Forming a limited liability company (LLC), partnership, or corporation will protect you.
The structure of your business will impact your taxes and accounting. Remember, you might need to change your structure as your business grows. When in doubt, talk to a CPA or attorney.
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Step 4: Name Your Business
What’s in a name? The right business name is simple to remember and tells just enough about your business. Make sure it’s a good one. From there, you’ll need to check if it’s already been trademarked or registered.
In some states, there are different laws and regulations about naming your business. Sometimes you need to register as a sole proprietor, sometimes you don’t. You’ll typically do this with your county clerk or state.
Step 5: Prepare Your Team
Now that the legal and financial work is out of the way, it’s time to prepare your team to hit the ground running. You might need to hire employees or find contractors to work with on specific projects. It’s always better to start small, especially when you’re not sure how much work you’ll have for new employees.
Even if you’re starting your business alone, don’t be afraid to ask for help. Contractors and freelancers can fill in those gaps in experience. Every business owner needs the right support team to find success.
Small Business Success
Are you ready to launch your business? Your audience is out there waiting for your product and service. Now it’s up to you to find them. As long as you’re serious about making your business work, you can survive in this competitive industry.
These steps above might seem like a lot of work, especially when you’re excited to hit the ground running, but they’re vital. The more you plan, the better equipped you’ll be to overcome the challenges of starting a business.