Starting a small business can be daunting in the beginning as there are a variety of steps that need to be established. For that matter, will it even be successful? These questions may stop you in your tracks, but they don’t need to. By going step-by-step, you can put all of these steps into perspective and not feel so overwhelmed. Every business that exists, from the smallest business to Tesla, began as an idea. You have the ability to transform your idea into action. Focus on success as you start your company. Work hard and believe in your abilities. These six steps can help you on the path to building the dream you have into a successful business.
#1 BUSINESS PLAN
This sounds legal and daunting, but you can begin with just one page. When your business is in the startup phase you’ll want to keep everything simple and costs low. Before investing tons of money, time, and effort into this venture, you’ll want to take it for a test run to ensure the need is there and you have customers who are more than willing to shell out some cash. So, start low and easy, like all other skills. Don’t overwhelm yourself with the big future you have for your small business. Most long and thorough business plans are needed if you are seeking financial or investment assistance from an entity like a bank.
How to create a one-page business plan?
There are five basic steps to writing a simple business plan:
1. Define the future of your business, i.e. create your vision statement.
2. Define why your company must exist, i.e. create your mission statement.
3. What goals do you need to achieve to make your mission and vision come true, i.e. create your objectives.
4. How do you plan to fulfill your objectives, i.e. create your basic strategies
5. Define smaller actions that will lead to the objectives, i.e. create a very simple action plan.
When you write your business plan, it might be more than one page, but it will clarify many basic aspects of your company. With your action plan, you can list the task-oriented aspects that will break your large goals into small chunks that will combine to push your company forward.
#2 SELECT YOUR BUDGET
It’s best when first beginning your business to keep your costs as low as you can, but you’ll still want to set a budget and see how much you have to spend on your business. If you have no outsiders helping with funding, be very honest about how much you have and what you think may be needed to support your business in the future. Pertaining to your burn rate, the total amount of money you’ll spend monthly, 20 percent is a great number to be added to your total budget for incidentals.
Your burn rate is important because it determines how long your business can stay open without turning a profit.
Your business should become profitable within the first 30 to 90 days, but you should have a reserve built into your budget so you have money left over if it does not turn a profit within that time.
#3 CHOOSE A LEGAL ENTITY
There is a lot of paperwork that comes with starting a business of any size. This paperwork can be expensive, depending on your state. You’ll need to factor in licensing through your city or municipality, business entity fee, or state incorporation to start. Before starting your business, thoroughly research the filing fees that are associated with your city, county, and state.
When you are in the test phase of your business, i.e. the first three to 6 months, you may want to begin as a sole proprietor. This has the benefits of less paperwork and expenses. You can use the excess money to support other aspects of our business, but being a sole proprietor opens you up to many personal risks. Before committing to this route, consider the advantage and disadvantages, and if you can, discuss your options with an attorney or tax professional to help you choose the option that will be best for your short-term and long-term goals.
If you’d like to wait to file after you have proved your business has the potential to be successful, within three to six months, you can do that, as well.
#4 KEEP YOUR MONEY SEPARATE
After you have chosen your business entity, It’s important for taxes and overall financial situations to keep your business and personal accounts separate. You can open a checking account with your bank or credit union that is free. After bringing an initial deposit, filing paperwork, and your sole proprietor information, you can open this account with most institutions.
Because your business is in its startup phase, you’ll want to avoid paying for an account or getting credit. This checking account will be used to keep all of the money separate, only.
Your website is your online home for your business, whether you have a business that has a physical location or is just online. You can purchase domains at HostGator or Go Daddy starting at $9.99. these sites are easy to use and you can search for the domain name you’d like using their simple interfaces.
If your business is online, you can tie it to an online storefront such as Shopify for a low price or use Weebly’s powerful and simple drag-and-drop features. Also, there are other website builders like Weebly that can be used.
#6 TEST SALES
With the previous five in place, you have enough to begin selling your services or products. If you are selling services, heading to your local small business chapter or chamber of commerce can help you find speaking engagements. If you are selling products, swap meets and other community events are great places to get feedback from the public and see who is interested in your products.
Starting a small business can be simple and low-cost. After you have begun the startup phase, it is important to focus on marketing, getting involved in your community, and finding places to network.