Corporate America is definitely not for everyone. Poor job security, long hours, unsatisfactory pay and working for someone else isn’t how a lot of people want to spend their lives. However, most people don’t see any other option.
Starting a business sounds like a great idea, but it can be a daunting task for people who don’t even know where to start. If you’re new to entrepreneurship, then coming up with a business idea, developing a strategy and securing financing can sound intimidating.
If you’re not interested in sticking with the regular 9-to-5 grind, here’s what you need to know about starting your business.
Choose and Research an Idea
Of course, the first thing you need to do is pick an idea. This doesn’t just mean choosing the type of product or service you want to offer; it also means deciding what type of business best suits your idea.
Should you open a brick-and-mortar store or operate as an online-only business? Are you marketing to consumers or other businesses?
Be sure to carefully and thoroughly research your idea. Determine your primary audience, the costs associated with running this type of business and your competition.
Don’t rush this process. Starting a business isn’t a race. Take your time and be sure you are confident in your business idea before taking the next steps.
Develop a Business Plan
Once you are confident in the type of business you want to run, write a detailed business plan.
A business plan will be crucial when securing financing and recruiting experienced employees to join your new business venture.Your business plan should detail all of your goals over the next five or so years and how you plan to achieve those goals.
Additionally, your business plan should include:
- Company description: Include information such as your ownership structure, registered business name and a quick description of what your business does.
- Products and/or services: Describe the types of products and/or services that you offer, your pricing model and your target audience.
- Marketing plan: Describe how you plan to market your business and increase brand exposure. Consider social media marketing and online advertising.
- Financial projections: Potential financiers will be particularly interested in this section. It should outline your expected expenses, revenue and profits over the next several years. The idea is to demonstrate that your business will generate enough profit to pay off your loans.
Writing a clear and concise business plan can help you realistically assess your goals and expectations in addition to helping your business secure financing.
Register Your Business
Registering your business is the first step that turns your idea into reality. You should understand the different types of business structures and which one is right for you.
This process is very important, so you should seriously consider consulting with an attorney to ensure everything is done correctly. You may have to obtain permits and business licenses and abide by certain regulations, depending on your location. You’ll also need to choose a business name if you haven’t already.
Types of businesses include:
Research the pros and cons of each type of business structure and understand the tax implications of each one.
Unless you’re starting a sole proprietorship that doesn’t require a lot of capital for materials, you likely will need to pursue financing. Aside from small-business loans, there are many options to choose from, including:
- Venture capitalists
- Angel investors
- Business credit cards
- Investments from friends and families
Of course, small-business loans are typically more favorable than these options. Depending on your needs, you can choose from equipment loans, SBA loans, term loans and many other flexible means of financing an emerging business. Be sure to review the different types of small-business loans to determine which option is the best for you.
Once you decide on a source for financing, you should be able to demonstrate how you will use the funds, how these expenses will benefit your business and how you plan to pay back your loan. Loaning money to startups can be incredibly risky, so you need to build confidence with potential investors to increase your chances of being funded.
Starting a small business can be an intimidating and difficult endeavor, but the advantages of being your own boss make it well worth it. These steps can help put you on the right track to starting a successful small business.