More than 28 million small businesses are running in United States only, which contributes to approx. 99.7 percent of all U.S. businesses, according to the Small Business Administration. Most popular reasons behind the boosting of small business, includes a unique business idea, developing a flexible career that grows with you, enhancing financial independence for yourself, and calibrating the business according to yourself. Due to such reasons small businesses are now expanding.
But success is not meant for every small business. In fact, according to the survey about two-third of businesses with employees retains their job at least for two years, and about half survive five years. So, there is a real challenge for you when you decide to encrypt all your knowledge and experience to take a step to ditch your day job, and start one as an owner. The stage in often set at start, so make sure you follow all of the vital steps to set a powerful foundation for success.
Here are 10 necessary steps that one should follow and take care of while starting a small business successfully. Each step with proper timing will lead you to the success of your small business and will way to a successful small business ownership.
How To Start a Small-Scale Business
Step 1: Research should be done
As soon as you have analysed your business idea, it should be now balanced with a little reality. You should validate your business idea for further processing whether it has potential to succeed or not?
If a small business solves a problem, fulfil a need or offer something the market wants it can be successful.
Market research, focus group, and even trail and error method may help you to identify what the market requires. Some basic questions that you answer includes:
- Are your expected products/services being of any need in market?
- Who are the needy?
- Are there any competitions available in the market?
- What is the competition like?
- How the market accepts your existence?
Don’t forget to analyse yourself too before starting a business.
Step 2: Prepare a Strategy
A plan is always vital element for converting your business idea in reality. A plan is a blueprint of your idea that will guide you from start-up phase through establishment and eventually till the business growth
Also, different types of business need different types of business plans.
A traditional business plan is necessary for seeking or gathering an investor’s or financial institution’s attention. While validating your idea banks and investors look for the common set of sections in traditional business plan.
There is no need of such long written business plans if you are not seeking for any financial help. In that case a simple one-page business plan can give you clarity about what you want to do and what you want to achieve, as some written plans are always better than nothing.
Step 3: Plan your Expenses or Initial Investment
Not a lot of money is required to invested to start a small business, but it will require an initial investment as well as ability to cover the ongoing expenses before business starts giving profits. Prepare a spreadsheet that contains and estimates all one-time investments of your business (licenses and permits, tools and equipment, legal fees, insurance, branding, inventory, trademarking, opening ceremony events, etc.) as well as what you expect your business will need for to be working for at least 12 months (rents, utilities, maintenance, marketing and advertisements, etc.).
These all get combined to provide you the idea of the initial cost to be invested in your business.
Now for gathering the funds various ways are there, including:
- Small business loans
- Small business grants
- Angle investors
- Crowd funding
Bootstrapping is also used if you attempt to get your business off ground. The goal her is to gather the idea for all initial investments and managing it.
Step 4: Choose a Business Structure
Your small business can be of form of sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. These decision of form of company will affect many aspects such as business name, liabilities, etc.
An initial business structure can be chosen that can be later re-evaluated and changed as the business grows.
Depending upon complexity, an attorney or CPA should be consulted before investing in business to ensure that you are making the right structure choice for your business.
Step 5: Decide and Register your Business Name
The name of your business should be a good and unique one, as it plays a vital role in almost every aspect of your business.
Copyrights or trademarks should be verified after you choose a name for your business as to check whether it is currently in use or not? Then you will need to register it. The business name should be registered with either their state or country clerk, in case of sole proprietor, while in case of others business name is registered while their formation paperwork is filled.
After your business name is registered don’t forget to register your domain name.
Step 6: Get Licenses and Permits
Paperwork is very important part of process as it provides the authentication to your business.
A variety of small business licences and permits may apply to your situation, depending upon type of business you are going to own and where you are located. You need to analyse that which licences and permits are vital for your business in start-up phase.
Step 7: Choose Your Accounting System
Systems in place helps a small business works effectively. Accounting system is a vital part of all these systems.
The accounting system will lead to create and manage your expenses, set proper rates and prices according to market, conduct business deals with others, and help to file your taxes. An accountant may be hired for the purpose or you can do it yourself depending upon the size of your business. Appropriate accounting software must be used by you if you are doing it by yourself.
Step 8: Set Up Your Business Location
Your business place is important for the operation of your business, whether you will have a home office, a shared or private office, or a retail location.
You should evaluate all the aspects such as location, equipment and overall setup, and make sure that your business location should be in favour of the type of your business.
Step 9: Get Your Team Ready
Now its time for hiring your employees. Before that you should decide the posts and outline all the responsibilities associated with that particular post.
If you are not hiring employees but want to work with independent contractors, then its time to start the search and contact the attorney to get the contractor agreement in place.
Lastly, if you are alone in battle and want to run a single-handed business you don’t need to hire any employee or search for contractors. But then also you need your own support team. This team can be your family, small business coach, or any mentor and they serve you with their advice whenever you need them.
Step 10: Promotions of Your Business
Now after your business is up and running, now you need to attract the clients and costumers towards you. You need to start with creating a marketing strategy or unique selling proposition (USP). Then for promoting your business start exploring as many small business marketing ideas.
You will have all the most important bases covered after once you completed all these business start-up activities. As you know that success don’t come overnight so you should stay consistent on your working plan, so as to increase your chance for tasting the success.