AM I AN ENTREPRENEUR?
STEPS TO STARTING A SMALL BUSINESS
Entrepreneurship is all the buzz these days. Everyone wants to be a business owner whether it’s a full scale corporation or a side hustle. Do you want to start a small business? Does the idea of owning and running your own business appeal to you? Have you made starting a business a part of your financial goals? How long have you been contemplating this move? How close are you to really making it happen? How much do you know and how much research have you done?
What Is A Small Business?
American business is small business! According to U.S. Census Bureau data in 2014, there were 5.83 million small business employer firms in the United States. Companies with less than 20 workers made up 89.4 percent of businesses. In Michigan, 99.6% of businesses are small businesses and 49.2% of the workforce is employed by small businesses. American business is small business!
According to the Small Business Association (SBA), a small business is one that typically makes a maximum of $750,000 – $38.5 million in annual revenue and has less than 100 – 1,500 employees, depending on industry. A small business is a privately owned company in the legal form of a corporation, partnership, or sole proprietorship.
Where Do You Land?
Where Do You Land?There are different types of small businesses and where they fall is based on the industry size and the standards that have been established by the SBA. Companies can be broken down even further into a sole proprietorship or a micro-business.
Sole Proprietorship
This type of small business is the smallest form. It is owned and operated by one person and is usually unincorporated. The owner is responsible for the business and can operate under the name of the owner or a chosen name.
Micro Business
This type operates on a very small scale by choice or by necessity. They usually employ less than 6 people, not including the business owner(s).
Ready, Set, Go!
Now that we have discussed the basics, how do you move forward? If you have decided that starting a business is truly the path that you want to take, you will want to make sure that you have a great start. Here are some guidelines that will ensure that you lay a great foundation for your worthy endeavor.
- Research, Research and Research Some More
You probably already have your business idea. Is there an actual need for the product or service you want to provide? What problem are you solving? What need are you meeting? Who is your competition? All of these questions and more need to be answered before you start your business.
- You Need a Roadmap
Once you have done your research it is time to put it all to paper. Write a detailed business plan. How detailed you need to be will depend on the type of business you are starting and if you will be seeking investors or not. This plan should be comprehensive enough to guide you from your start-up phase and through stages of growth.
- How Much Will It Cost You?
How much is your initial investment going to be? How much will it cost you to sustain your business for the first 12 months or until you can turn a sustainable profit? Estimate all of your actual cost and then decide how the business will be funded. Will you apply for a loan? Will you approach potential investors? Will you apply for a grant or use your own savings? You may use one, all or another funding source but the goal is to have a plan in place.
- What’s Your Structure?
We discussed business entities in the beginning of the blog. Whichever you choose will have an impact on some of the operations of your business. You can always establish one business structure and then change the entity to fit your business needs and growth. We can definitely assist you in assessing your business needs and registering your business here at Timothy Roberts & Associates LLC.
- What’s Your Name?
Choosing your business name is an important step in the process. You may even have a business name that came with the idea of the actual business. Whatever that name is will be representative of who you are as a business. You will have to check to see if the name you have chosen is already in use and then register it. This process will also be determined by the business entity or structure you have settled upon.
- Get Permission
Licenses and permits are a part of the process. Depending on the type of business you will be conducting and where the business will be located, you may have to apply for licenses and/or permits. You should add this piece to your initial research.
- All Systems a Go
It is important to put the necessary systems in place in the beginning stages of starting your business in order to create a firm foundation to build on. One of the most important systems is your accounting system. The business accounting system is needed in order to set up your operating budget, project future costs, establish pricing and file your taxes. The earlier your accounting system is established the better in the long run.
- Where Will You Work?
Will your business be set up in your home or will you be renting a space? What kind of equipment do you need to house in order to run your business? Is it more beneficial for you to rent or buy space to run your business? How much space do you need or can your business be run virtually? These are all matters to take into consideration.
- World Wide Web
In this age of information and technological advancement, you do not have a business if you can’t be found on the internet. You need to establish an informative website. You also need to select a domain name which should actually be done in conjunction with establishing the business name.
- No “I” in Team
Do you plan to work alone or do you need to hire staff? Maybe you will work primarily alone, but you will outsource some of your tasks. Whatever you decide works best for you, it’s important that you think about the workload in the beginning. Put a plan in place that will meet the needs of the business and serve you as the owner.
- How Will They Find You?
So, you have everything in place, but no one knows you exist. Marketing is the key! You have to attract customers and clients in order to really have a business. What is your marketing plan? How will you promote what you have to offer? Do you have a business card? What is your business script? How quickly does your business come up in a Google search? Marketing your business is very important.
And We’re Off!
All of the steps offered to you will definitely put you on the road to establishing and running a successful and profitable business. Whether you have decided that you want to start a small business to assist you in reaching your financial goals or help you live the life you desire, Timothy Roberts & Associates LLC is here for you.
Check out our Business Consulting page at www.timothyrobertsllc.com for more information on how Timothy Roberts & Associates LLC can help you navigate through starting your business. We want to see you reach your financial goals! It is our endeavor to always offer and add value to you. We hope that you have found this information to be helpful. Pass it on to your family and friends. Follow us on Facebook and LinkedIn and as always stay tuned for next week’s blog post. Until then remember…
Your Interest is our Only Interest!
Sources:
https://www.sba.gov/content/small-business-data-resources
https://quickbooks.intuit.com/r/business-planning/much-money-need-start-business/