How to start a small business
Starting a small business takes a lot of time and preparation. This article discusses much of the preparation that a person needs to do in order to start a successful small business.
The first step for someone to start a small business would be for them to have some business ideas. While this may seem simple, sometimes a person only knows that they want to start a small business, but they do not actually know what they would like to do for their business.
There are several different ways that a person can go about thinking of business ideas. For example, some people think about things they like to do, or their hobbies. Other people think about things they would be interested in doing, what they have gone to school for, or other skills they have and decide if these things can work as a small business.
No matter how a person comes up with the idea for their small business, it is a good idea for them to think about whether or not there is a need for their type of business and perhaps do a little asking around to see if people might actually be interested and be customers for their potential small business.
Creating a business plan
After a person has come up with a great idea for a business, it is essential that they then create a business plan for their future small business. There are two main reasons why a future small business owner will need a business plan. Most small business owners will need some money to start up their small businesses. And more people get this money through a bank or other lending institution in the form of a small business loan. To get a small business loan the bank or lending institution will want to be sure that they are not taking a huge risk on the future business owner; they do not want to lose their money. A future business owner can use their business plan to help prove to the lender that their business will be successful.
The other reason the small business owner needs a business plan is for their business to be successful. If the business does not have a plan or any projections and goals then it will likely fail, quickly. But with a plan and goals the business and its owner will have things to work for to keep the business going and to hopefully make it be a successful small business.
A business plan needs to contain the business strategy, the financial projections of the small business for the first year and for following years, the marketing strategy, the marketing plan, and how they will advertise and promote their business and its goods and/or services.
As mentioned previously, most future small business owners will need some financing help to get their small business going. Banks and other lending institutions are usually the best way for a person to get the funding they need of their small business. Before a future small business owner can get the loan they need they should take time to prepare the documents (ie the business plan, the application, etc.) for the bank. They should also ensure that their credit history is good and that they have the experience and/or education to help make their small business a success.
Some future business owners are able to get funding from family members or friends or through investors. This can be a great way to get financing for a small business. But a future small business owner should still have the business plan, experiences and/or education it takes to be successful even if they have to pay back a loan to a friend and not to a lending institution.
Making it official
After a person figures out what they want their small business to be and they have received the money to start the small business they will then need to make it official. The small business owner should decide whether they want to be a Corporation, a Partnership, or a Sole Proprietorship. Then they can file with their state so that they can get their federal identification number for their business and incorporate.