How to Start a Small Business
So you are wondering how to start a small business.
Starting a small business can be a time filled with excitement, anticipation and positivity. Yet it can also be downright exhausting (both mentally and physically), overwhelming and terrifying.
Making the Small Business Journey Easier
It helps to be prepared and educated when starting your own small business, as this can take much of the fear and anxiety off your shoulders. If you are educated about the process of starting a small business, and you have taken all of the appropriate steps towards owning your own small business, then you are on your way to a successful future.
Steps on How to Start a Small Business
If you are interested in starting your own small business, there is a list of essentials you must address:
- Begin by conducting serious soul searching. Is owning a small business right for you? Do you have the decision-making abilities necessary to run a successful small business? Do you have the physical and emotional stamina necessary? How will the business affect your life? Your family’s life? You may want to start your journey by talking with other small business owners to get a good idea of the amount of time and commitment it takes to run a successful small business.
- Consider the main reasons small businesses fail, and assess your individual situation. The most common reasons small businesses fail is because of the owner’s lack of experience, insufficient capital, a poor location and unexpected growth.
- Contact local small business advocacy groups and find a course or seminar related to starting and/or managing a small business. A crash course in small business ownership and management can often provide considerable insight regarding your decision to start your own small business.
- Decide whether you will start your own business, buy into a franchise or purchase an existing business.
- Decide where you will operate your business. Will you lease or purchase commercial space, or run your small business out of your home?
- Develop a comprehensive business plan for yourself, your lenders and your investors. Make sure that your business plan outlines your strategies and projections, as well as a clear, concise marketing plan.
- Secure the financing for your small business. This may include your own personal monies, money from your friends and family, money from investors, and bank loans. Consider that family or friends may want to control a portion of your business if they provide financing. Are your prepared to submit regular loan payments before you begin making money?
- Choose the legal structure for your small business. Consider whether you want your small business to be a sole proprietorship, partnership or corporation. Your decision will likely be influenced based upon your financing needs.
- Contact the U.S. Small Business Administration for more information on small business loans through your state.
- Obtain a business license through your state or local government.
- Obtain your federal tax identification number, and decide which state you will incorporate your business.
- Consider taxes and bookkeeping. Hire an accountant or financial advisor, if necessary.
Learning how to start a small business is only the first step of your exciting journey, which will be filled with challenges, rewards, and hopefully success!