In today’s article, you’re going to learn everything you need to know about how to start a small business.
Do you desire your own company? Do you want to be your boss and have your fate in your hands? Is it difficult? No doubt. Is that a big challenge? Anyway, yes. Do you have to be rich and educated, and you have to have a lot of experience? Not at all! Can you do that too? Of course! So how do you do that? Thoroughly plan everything. There are a few proven tips that will allow you to set up your own company. So what are you waiting for?
How To Start a Small Business:
1. You have a conception.
It can be the product you want to produce or the service you want to offer to people. It can be something that people do not even know they will need because it has not been invented yet! It is also useful and fun to have smart and creative people around you who can help you with ideas. Start with simple questions like “What do we want to create?” You do not have to build a business plan yet, think of ideas. Some ideas will be wrong, some will be common, but some concepts will come up with real potential.
2. Define your goals.
Do you want to be financially independent and ultimately sell your company to the one who offers you the most money? Do you want to have a small but sustainable company that will entertain you and give you a regular income? You have to answer these questions right from the start.
SEE ALSO: How To Open An Online Store Step-by-Step
3. Think of your name.
You can think of a company name before you have a job. If you have a good name, it may help you find out what you want to do. When you have a plan accountable, and things get a little dainty, you might think of the ideal name by yourself. Do not be afraid to invent it even in the beginning stages – think of a name that you can use when planning, and if you do not like it later, you can change it. You can take an example from the Beatles, who often named their songs with funny names and edited them after they were finished. For example, the song Yesterday was called initially Scrambled Eggs.
4. Identify your team.
Do you want to work with yourself or with a few friends? If you are not alone, you will have more ideas – more heads know more. Couple people collectively are stronger than the amount of their intelligence and creativity. Take, for example, John Lennon and Paul McCartney, Bill Gates and Paul Allen, Steve Jobs and Steve Wozniak, or Larry Page and Sergey Brin. In each of these cases, these partnerships helped win the best of both partners, and all of them eventually became millionaires. Is Partnership Guaranteed to Make a Lot of Money? No, but it’s worth a try.
5. Choose intelligently.
When choosing a business partner, be careful. The fact that someone is your best friend does not have to mean that you can go along with the business. Think about these things: Does this person add to your weaknesses? Or do you have both the same strengths? If you do not have to complement each other, you will both work on the same things, and the others will remain neglected. Do you have the same idea of the future of the company? It is clear that you will quarrel about the details, but you should have the same opinion on all the essential things. If you do not agree on the essentials, it could irritate the company. Make sure the whole team agrees on the most important things. If you hold interviews, first find out how to choose the right candidate. It’s not just about experience and university diplomas. People’s talents sometimes differ from conventional judging standards, so it’s important to be able to find people in what you want to do.
6. Create a business plan.
A business plan helps you determine what you need to run your company. It summarizes the primary meaning of the company in one document. It also creates a map of investors, bankers and other people who will be interested in your company and who can help you. There are plenty of great books on making business plans to help you. You should buy them a few (in a bookstore or over the internet). In short, your business plan should include the following elements:
Your project will have several parts. The first is a summary. Describe the overall concept of the company; it’s funding, the amount of money you need, the status of your company, describe its legal situation, state all the partners and the company’s brief history and everything else that your company could bring in a better light.
Describe your company in more detail and indicate what position it should occupy. Who do you sell your products and how do you distribute them? State whether you are a joint stock company, a limited liability company, or a tradesman and write a reason. Describe your product, its strengths and the reasons why people want it.
9. Marketing strategies:
If you’re going to succeed, you have to be well-oriented on the market. First, make market surveys and find out who will want your product, how to do it, make them interesting and what your market potential is. When you have all this information, you should sell them to people who will read your business plan.
10. Competitive Analysis:
Once you have all the points listed above, you will know who your competitors are. Find out which companies are dealing with the same or similar things and how they succeeded. It is also important to note their mistakes and to focus on companies that have failed to survive.
11. Development plan:
How will you produce your product? Are you a service or a little more complicated – software, a physical product like a toy? Find out how you make it. Define the whole process from material acquisition to assembly, packaging, storage, and logistics. Will you need more people? Will you cooperate with trade unions? All these things you have to consider thoroughly.
12. Plan a sequence of features:
Who will be the lead and who will be the subordinate? Define your company from the receptionist to the director and identify each person’s role. Knowing your organizational striction will help you better plan your operating costs and find out what capital you need. Remember that your company will have to evolve and that it is just a basic idea of how it will work. When the company grows, you have to change things and adapt. In many cases, the word “employees” means only you and various consultants, such as lawyers and accountants. It is fine, but you have to count on paying for each consultation and once you have to hire employees.
13. Financial Costs:
Describe how much you plan to spend and how much you plan to earn. This part of the plan is the most dynamic and probably the most important for the long-term stability of the company, so you should change it every month during the first year of your business and in the second year every three months. Later, the financial plan will be adjusted once a year.
14. Find a lawyer or legal counsel.
On the way to a successful company, you have to deal with a lot of obstacles. Some of these obstacles will consist of hordes of documents full of rules and regulations, from rental contracts to city decrees, allowances, state regulations, taxes, fees, contracts, shares, partnership documents, etc. When you have someone you can call when you need, you will be much calmer, and you will know that you will not make any unnecessary mistake. Choose someone with whom you fall in the eye and who will understand your company well. He should have a lot of experience in your area because an inexperienced lawyer could cause you large fines or even jail.
15. Get your accountant.
You will need someone who can take care of your finances. Even if you manage your books, you will need a person who understands taxes. Company taxes are very complex so that you will need at least a tax advisor. No matter what authority he has, he must be someone trusted.
16. Establish a legal unit.
You will have to decide what kind of company you want to have. This is important because of taxes and also because of investors. Most people know stock companies or limited liability companies, but most small businesses operate under one of the following types: Tradesman. If you manage your business yourself or with your spouse (without employees), you should set up this business. Partner company – set up here if you partner with a partner. Limited Partnership – The company consists of several partners who are responsible for the company’s problems and a few limited partners who are only accountable for the amount they have invested. Everyone shares revenue and losses. A limited liability partnership is a company in which no partner is responsible for the loss of another partner.
17. Cover your entry costs.
How will you finance your company from the start? Take credit, get capital, find an angel investor, or use your savings? Try to be realistic. You probably do not start earning as much as you put in the company, so you should have enough reserves to keep your company running until you start making money. By subduing your capital, you will not have the chance to succeed. The four foundations of investment are investors, family, friends, and fools.
18. Prepare more than the minimum.
You can determine that you need 1,000 USD to set up a company. You get a million, buy tables and printers, materials, and then come the second month, the company is growing, you have to pay rent, you have to pay employees, and you get lots of invoices. If that happens, the only option is to wrap it all up. The best will, therefore, be reserved for at least a year without income.
19. Schedule all purchases and costs to a minimum.
At first, you will not need an office in the center, dearest chairs, and precious artwork and walls. You will have a small office at a right address, and clients at the beginning can make a meeting at a café across the street (meet them at reception, for example). Many companies went bankrupt because they first purchased expensive equipment instead of focusing on the business itself.
20. A plan as much as possible.
At all costs, prepare tables and plan. How much do you want to sell your product for? How much will it cost to produce? Develop a primary schedule of finance and count on all costs – rent, energy, employees, etc.
21. Watch your competitors.
Be aware of how much they sell their products and see if you can somehow improve yours and sell it from a better price. For example, if you provide a year of extended warranty, free service or one extra product, you will be more attractive to customers. Competition is not just about goods and services. It is also social and environmental credibility. Consumers must see that you are interested in working codes and do not harm the environment. When you get various awards and certifications in these areas, customers will see that your product is in line with their values.
22. Manage your operating costs.
Keep track of your operating costs and adjust them according to your forecasts. Whenever you see that something is wasted – electricity, telephones, office supplies, or packaging – look around and estimate how much you need. Minimize all costs as much as you can. At first, think economically. You can rent a lot of things instead of buying and using prepaid plans for the services you need instead of subscribing to long-term contracts.
23. Find out how you get paid.
You will have to think about how you get paid from your clients or customers. You can get a payment system that fits for small businesses because it does not require too much paperwork. But if you do not have the technology, you can just set up a business account. A business account is an account that the bank will associate with merchants who will receive credit and debit card payments for your merchandise. Previously, no such statement could be paid by large companies’ cards. Now, thanks to Square, it’s different, so you do not have to use this option.
24. Get your website.
If you want to sell your goods over the internet, get e-commerce equipment and arrange a website. Make them, so people like to go and buy them.
25. Hire professional web designers.
It will make you more money, but investing in a good and functional site will quickly return you. Your site must look professional and work correctly. If people use the site, invest in security encryption and cooperate only with proven, trusted companies.
26. Wake up with a publicist.
You can trust your product, but it will not do you any good if other people do not believe it. If you are new to marketing or do not like marketing, you will have to overcome it and start doing it. You’ll need to create a trusted ad that convinces people to buy your services or products. It must reflect the value, purpose, and potential of what you offer. Write a few advertising slogans and choose the one that suits you best. Then train him well. Have exciting and professional business cards printed.
27. Engage in social media.
You can do this before you have a business ready to increase the interest of your clients. Take advantage of Facebook, Google+, Twitter, and all other social networks that can help you grow your company awareness. You have to create a crunch that will make people interested in your products. (Always separate business accounts from personal ones, each post should be written to match the account you are currently using.)
28. Implement your marketing and distribution plans.
When you have a product or service ready and you have sales forecasts, start marketing. If you want to advertise in print, you will need to send copies and ads at least two months in advance. If you sell in stores, prepare pre-orders and order your premises. If you sell over the Internet, get ready for a sales system page. If you offer services, advertise in journals, newspapers and the Internet.
29. Ensure your premises.
Whether it’s office or warehouse, now you will not just need a room in the house or a garage. If you do not need anything but your own home, but from time to time you need to meet clients, some spaces will allow you to. Find “meeting room rentals” on the internet, and you will undoubtedly choose.
30. Make products or prepare services.
Once you have everything scheduled, paid and you have employees, go ahead. It does not matter if you are going to sit with the engineers and test new software or look for materials to produce your products or buy equipment, but you have to get ready to enter the market. At this time, you’ll probably find the following things: You will have to modify your ideas a bit. You may want to produce the products in different sizes or other colors. You may have to expand or limit the offer. At this time, you will have to deal with all the things that did not appear during the test. You will have to sense what needs to be changed or improved to differentiate yourself from your competition. Get feedback. Your friends and family will help you. Do not hesitate to use them as the first testers of your new product or service. You may have to rethink the size of your space. It happens much more often than you would think. Once you stock up inventory and material, you will find that you no longer have a garage or bedroom, and you will have to rent storage space.
31. Start selling your product or service.
When everything is made, packaged, ready for sale, or when you have the service available and ready, you should officially start selling. Give a press release and tell the world. Write it down to all your social networks and let everyone know that you’ve launched a new company. Organize a party and invite people to give you an ad. You do not have to make an expensive party – buy food and drink at wholesale and ask family and friends to help with snacks (you can give them your product for free).