If dreams of being your own boss haunt your sleeping and waking moments, you probably also know that half of those dreams lie broken beyond repair after 5 years due to poor planning, bad locations, financial heartbreak or marketing failures. But building your dream through carefully planned steps can make entrepreneurship not only possible but a reality.
After all, according to the Small Business Administration, "small businesses make up 99.7 percent of U.S. employer firms." If entrepreneurship beckons, here are 11 vital steps to gaining admittance to the 99.7 percent.
Evaluate Yourself, Your Idea And The Industry
Detail realistic goals and the day-to-day to-do lists inherent to your idea and compare them to your abilities and capabilities of performing them within your small business' industry:
- Examine your personal comfort levels for risk, negotiating abilities, independence, perseverance and resiliency.
- Research your idea for feasibility, use and duplication of effort.
- Compare your vision with the competition and niche markets.
Get Legal And Business Advice
Regardless of size, businesses must obey all laws that apply, including those associated with taxes and insurance for the business and its employees. Legal and business counseling services can help with all aspects, from intellectual property and financing options to environmental regulations or everyday licensing and insurance requirements. You may also be able to qualify for assistance through special programs for disadvantaged or under-represented groups.
Determine Business Structure
Business structure affects taxes, record-keeping and liability issues for your venture, so decide whether your business will be a sole proprietorship, partnership, corporation, subchapter corporation, or limited liability company. Sole proprietorship is the most common choice, offering complete control but also substantial liability while limited liability company status provides the other end of the spectrum, with corporate and partnership benefits but little personal liability.
Research Business Location And Overhead
Brick-and-mortar ventures have expenses and traffic issues that differ considerably from Web-based or service-only businesses. Research thoroughly all location alternatives, rents, parking, fees, commercial website-hosting or design expenses. Access – and proximity – to four factors is key:
- Customers. Your location must be easy to find and convenient for customers.
- Raw materials.Accessible locations keep transportation costs low.
- Employable workers. Low-wage workers often seek local employment.
- Infrastructure. Consider water, electric, communications and other utility requirements as well as traffic and parking for customers, employees and deliveries.
Develop A Business Plan
A business plan is a written document that lays out what your company will make or sell and how it will function and grow over the next 3 to 5 years. It will include nine or more sections:
- Executive Summary. Highlighting mission statement, your company's basic structural information, projected growth, goods and services, financial plans and future outlook, this condenses all the following major points.
- Company Description and Mission.
- Detailed Product Lines or Services.
- Target Customer and Market Analysis.
- Marketing and Sales Plan.
- Milestones and Metrics for Success.
- Organization and Management.
- Financial Plan.
- Appendixes. Supply any needed additional documentation to support business plans.
Register For Identification Names And Numbers
You should first register your "doing business as" business name with your state government. Next, obtain a federal tax identification number known as an Employer Identification Number (EIN) from the Internal Revenue Service. You can apply for that online. And if necessary, obtain a state tax number from your state revenue agency.
Obtain Operational Licenses, Permits, Insurance And Bonding
Even as a business of one, you will need to obtain all licenses, permits, insurance or bonding mandated by federal, state, city, county and local laws. If your business "is involved in activities supervised and regulated by a federal agency… then you may need to obtain a federal license or permit."
Like the old adage preaches, you'll need money to make money. Whether financial resources will involve small business loans or micro-loans, private investors, partnerships, government-backed real estate loans, liquidation of personal assets or any other monetization strategy, you must have access to startup funds. You'll also need resources to support continuing operations. Establishing a business line of credit before the need arises can help you avoid financial crises.
Equip Your Office And Personnel With Tools Of The Trade
From business cards to laptops and the cloud-based operating systems that will provide inventory control, cost estimates, invoices and marketing strategies, you're going to have to select and purchase all the basic supplies necessary to support business right down to the furniture. Acquiring basic items, installing display cases and ordering signs for the front door take time and money.
Market To Customers
Competition is fierce, and small and big businesses alike live and die by customer acquisition and retention. Marketing your business appropriately allows the right people to find you.
If you keep four key factors in focus, you'll be able to launch successful marketing campaigns:
- Keep your product or service line easily identifiable and highly specialized.
- Use effective online promotions that build customer interaction through social media and mailing lists to keep customers current and invested in your progress.
- Balance price points carefully against quality, but be sure to stay competitive.
- Establish distribution patterns that keep traffic and area coverage high yet costs low.
Network Your Industry
Never forget the importance of networks within your own industry as well as parallel or ancillary ones. Connections you gain through professional associations and chambers of commerce may prove invaluable. Tend professional relationships, and partnerships may bring advantages to all involved.
As the Small Business Administration website proves, starting a successful business takes far more than 10 steps, but even a journey of a thousand miles begins with a single step.