Tips For Starting A Small Business
The United States is known as the land of opportunity primarily for the reason that anyone can come here and become successful. With education and hard work, a world of possibilities is open to those who want to try and grab the brass ring. Many individuals have an entrepreneurial mindset and are willing to take the risk and do the work required to try and start a successful small business. Fortunately, there is plenty of information and assistance available which can provide guidance for starting a small business. Below are some of the most common tips to help get the ball rolling.
Tip #1 - Start the Right Business For You
First and foremost must be deciding what the business will entail. Is it going to be a retail or wholesale operation? Will you be providing a product or service? Will the focus be on turning a hobby into a business or will you be starting a fresh concept from scratch? These are important considerations because depending on what the focus is can ultimately determine success or failure.
Tip #2 - Select Your Business Type
Business structure is an important part of starting a small business because it can have tax and liability implications. Will you be forming a sole proprietorship, LLC or Corporation? Depending on the type of business structure you may have to obtain additional licenses or seek legal advice to properly file the necessary paperwork.
Tip #3 - Guarantee Sufficient Financing
Many small businesses fail within the first year primarily due to cash flow and funding issues. Fully funding expected and unexpected expenses may make the difference during lean times. It's not enough to budget for monthly rent on a lease, purchasing inventory, paying suppliers, advertising and insurance. Sales can often be unpredictable and the type and availability of small business financing must be in place from the start.
Tip #4 - Create a Business Plan
A requirement for starting any small business will always be the creation of a thorough business plan. A business plan is the culmination of months of analysis which answers questions about revenue, expenses, marketing, financing, regulatory and legal requirements. A business plan is often required to receive loans from the Small Business Administration as well as a bank or credit union. A business plan is critical to increase your chances of success.
Tip #5 - Hire a Good Record Keeper
Running a small business is similar to budgeting household finances in that you need to know what money is coming in and what money is going out. Consider hiring an experienced bookkeeper and consulting with an accountant to keep track of business finances. Between the various types of accounting procedures and tax requirements for the state and federal government, financial record-keeping is crucial for both operational and legal requirements.
These are only a few tips for starting a small business but there are many more to consider such as taking business classes at a local community college and using Internet resources like SBA.gov. Also consider joining the local Chamber of Commerce and getting to know other small business owners as their experience and insights can be invaluable. Being an entrepreneur is never easy but the satisfaction and reward for being prepared and dedicated often offsets the risks involved.
