10 Proven Steps to Start a Small Business
There are (at least) ten major steps to starting a small business. The fact is, starting a business is hard work. It involves a lot of planning and entrepreneurs need to learn many new things. To start a small business adds the additional variable of how it impacts your family.
But with diligence, hard work and, most importantly, patience, you can start a business that is successful and meets your personal goals.
Here are ten proven steps on how to start a small business
1. Step 1: Do you have the time and money to see this effort through?
So you have been thinking about starting your business. It may have been that idea on the napkin at lunch or just a lifelong dream.
The first step of starting your own business is coming up with an idea that will work and is achievable.
2. Step 2: Decide the products and services you will offer
The next step when you start a small business, is to carefully consider these types of questions:
- What are you an expert in?
- What do you have to offer?
- What can you make, build or create?
- Do you have the education, skills (and licensing) you’ll need to compete in the marketplace?
- Does the product or service meet a demand that is prevalent?
- Is your product or service dependent on seasonality or weather (e.g. snow plowing or lawn care)?
In order to be successful, your product or service must meet a consumer need and must be competitively priced.
3. Step 3: Do you have your family’s support to start a small business?
Members of your family may need to make sacrifices or lifestyle changes in order to accommodate your business goals. They need to know what you are doing and how it may affect them in terms of money that may need to be spent and time away from that will need to happen.
While this may be your business, it will impact your family. So the lesson here is communicate, communicate, communicate.
4. Step 4: Understand your strengths, weaknesses and competitors
One of the major damaging habits of a business owner is that he doesn’t analyze his business and sometimes ends up in losses. Before taking a headstart, you must know what is helpful and harmful to your business opportunity. No matter what the size or scope of your new business, you will find incredible value in conducting a SWOT analysis.
A SWOT Analysis helps you to evaluate the strengths, weaknesses, opportunities, and threats in your market. By understanding your strengths and weaknesses as well as those of your competition, you can develop a marketing program to maximize your strengths and that can help differentiate you from your competitors.
5. Step 5: Create your small business plan
Whether you start from scratch or use a business plan template, all potential new business owners should have a business plan.
This process helps you to develop and understand what type of business you are trying to build and the action steps you need to follow. If you find it difficult, you can hire a business coach in your area, or speak to a local business association. They will guide you with the establishmnet, operations and marketing for small business owners.
6. Step 6: Choose a business structure for your small business
When you start a small business, you must determine what form of business entity you want to establish. This impacts your liability, legal and tax considerations. The major forms are:
- Sole Proprietorships
- S Corporations
- Limited Liability Company (LLC)
It is a good idea to talk to your accountant and/or lawyer on the best structure for your personal financial situation.
7. Step 7: Choose a catchy business name
Choosing a business name is an important part of the business planning process. Your name should reflect your brand, your product and your culture. Additionally, you need to make sure it is properly registered and protected. Don’t forget to check if the domain name and social media usernames are available as well.
Trademark infringement can be a big risk for your business. Before you pick a name for your business, you can use the U.S. Patent and Trademark Office’s trademark search tool to see if your suggested name, a similar name, or close variations of it, is trademarked.
8. Step 8: Register your small business
Be ready to check your local and state requirements for registering a business name, for getting an EIN number , for required licenses and permits, and register for local taxes.
Check out your state agency’s registration requirements here Small Business Administration.
9. Step 9. Set aside some space
Setting aside some space in your home to work on your business can be just the thing that fuels your new business. Moving from a hobby to a real business is a wall many amateur entrepreneurs never get over. They simply lack the focus and dedication to make their home business a priority.
Many successful small business owners attribute their early success to making the business a top priority and setting aside specific hours each day and a place in the home where they would work on the business.
It is important to note that the space you set aside specifically for your home business can be a much needed tax deduction so don’t miss this important step early in your business planning.
10. Step 10. Be diligent, patient and enjoy the process
To start a small business, takes a lot of hard work and it takes time. So whether you are making a hobby into a business, building something new from scratch, or reselling somebody else’s product, just remember, it’s a marathon not a sprint.