Steps to Opening a Small Business
It takes more than a great idea and entrepreneurial spirit to be your own boss. But if you follow the right path, that dream can be within reach.
Here's what you need to do to start a small business.
Create your business plan
A solid business plan helps you organize your ideas and attract potential lenders and investors. It doesn't need to be a dissertation. Ideally, it should be about a page long and include your business's:
- Mission and vision.
- Relevant copyright or patent information.
- Target market and related research.
- Estimated expenses and financing needs.
- Organization and management structure.
- Goals and objectives, along with an action plan.
Get someone in your corner
All entrepreneurs should have mentors, and there are many free and low-cost options. SCORE, sponsored by the U.S. Small Business Administration, offers business counseling, as do SBA Small Business Development Centers. And the SBA has a wealth of free online training tools.
Other government-backed mentoring options include Women's Business Centers, Veterans Business Outreach Centers, and the Minority Business Development Agency. Local trade associations may also provide advice and support.
Pick your business structure
Your business's structure will affect your personal and tax liability, so devote some time to researching your options:
- Sole proprietorship.
- Limited liability company, or LLC.
- C corporation.
- S corporation.
Ask your mentor for help choosing and navigating the setup process. Once you've settled on a structure, register your business and apply for a tax ID number.
Organize your business finances
It's crucial to establish business finances separate from your personal ones. Open a business checking account, set a budget, and determine how you'll pay for startup costs, such as property, materials, equipment, advertising and payroll.
Build your team
Unless you're a one-person operation, you'll need to recruit the right people. Network in person and online with potential employees and consultants.
Register for permits and licenses
Apply for any required permits and licenses as well as workers compensation insurance, if applicable. Taking care of these details now could help you avoid hefty fines later.
Get the word out
Your business can only succeed if people know about it, so launch a marketing campaign. Establish an online presence with a website and regular social media posts. Consider investing in professional advertising to help you target the right markets and separate your business from the competition.
It takes work and planning to start a new business, but the rewards of pursuing your passion can be well worth the effort.
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