Steps To Starting A Small Business

Entrepreneurship is more than just having a great idea and working hard to make a dream become reality. It often entails significant planning and sometimes multiple failures before success becomes a possibility. This is because drive and passion are only part of the successful formula when taking steps to starting a small business. We often learn more from our failures than our successes but understanding and implementing the basics can go a long way and avoid significant costs in time and money. Starting a small business can be both exciting and rewarding as well as stressful and difficult but getting started on the right foot increases your odds of success.

Preparation

The preparation stage of starting a small business is thinking through all possible obstacles and complications prior to even considering actual business formation. This includes creating a business plan which thoroughly maps out operating expenses, projected growth rates and profitability. Researching or speaking with a lawyer or CPA about legal requirements and accounting standards. Conducting a market analysis of competitors and product demand. Analyzing anticipated cash flows and, if necessary, short-term small business loans if projected revenues are not met. As you can see, there is a lot of work to be done prior to applying for a business license or opening a bank account. The Small Business Administration provides many online and in person resources to assist when planning to start a small business.

Implementation

Once all preparations have been made then it's time to take what you've learned and apply it. At this point you will need to get all appropriate licenses and pay any applicable fees to start your small business. Depending on your preparation stage, you might file paperwork to establish your Limited Liability Company if you decided that a DBA doesn't provide enough protection. Once you have your business license you can open a business checking account to both deposit initial capital and provide a means to receive payment for your product or service. You can also obtain an Employee Identification Number from the government and liability insurance to protect your business. Once the paperwork is done, you can purchase necessary inventory, hardware and rent a space to begin operations.

Operation

Operating a small business often entails more than sitting behind a counter and selling inventory. While this will be part of it, much more goes on behind the scenes like managing employees, if you have any, dealing with suppliers, paying bills, bookkeeping, marketing, filing taxes and generally everything else. It is not uncommon for small business owners to work 14 to 16 hours a day operating their small business. Depending on how thorough you are during the preparation stage, operations will either go smoothly or be incredibly stressful as a direct result. Operations do become easier as time goes on and prior experience will be invaluable at all stages but a significant workload still exists when starting a small business.

Summation

The steps to starting a small business are too many to thoroughly document in this brief article but hopefully a general overview has provided valuable insight. Many nonprofit resources are available to individuals looking to turn a hobby into a business or to embrace the entrepreneurial spirit. Also, it is common for other small business owners to join Chambers of commerce and other organizations so they can pool resources and experience and assist each other in being successful. Taking steps to starting a small business can be incredibly exciting but your success or failure is often determined by your own ability to execute your vision and overcome obstacles.