Small Business Series: Nine Steps for Starting Your Own Business
By: FCU Team
Starting a Small Business? Keep These Tips in Mind.
If you’re starting your first small business, the task might seem daunting and overwhelming. You might ask yourself what’s involved? Are there best practices to follow? How can you improve the odds of achieving your goals?
This article provides time-tested tips for running a business, useful for all entrepreneurs regardless of your experience level. Whether you’re starting a company for the first time or simply want to reinvent your operations, this information can give you a competitive advantage in your industry.
9 Steps for Starting Your Business
When you’re ready to get started on your new venture, your first steps should include:
- Selecting a legal structure
- Filing necessary forms
- Developing a business plan
- Securing capital if needed
- Identifying and minimizing start-up costs
- Marketing your business
- Preparing for record keeping and taxes
- Maximizing productivity
- Becoming and remaining a market leader
1. Selecting a legal structure
Depending on the structure of your business, important things like taxes and legal liabilities will have different standards and requirements. So it’s important to choose this structure carefully. Be sure to talk with financial and legal advisers before you move forward.
Some of the options for your business structure include sole proprietorship, partnership, limited liability company (LLC), corporation, and non-profit/cooperative. Each has its pros-and-cons, from how easy it is to form, to tax rates, and even how your assets are protected.
2. Obtaining licenses and filing necessary forms
All businesses have federal, state, county, and local requirements when it comes to licenses and permits they need to operate. Once you’ve decided how you’ll structure your business, you should take steps to ensure your company is operating within the law.
Some of the licenses and permits you may need include:
- Federal tax identification number
- General business license
- “Doing business as” (DBA) license or permit
- Sales tax permit
- Home occupation permit
- Health permits
- Fire department permits
3. Developing a business plan
A business plan is a document detailing how you intend to operate and grow your business. A solid business plan is important, no matter what stage of operations you are in. For new businesses, the plan helps with setting goals and obtaining capital from investors, or a loan from a financial institution. A carefully drafted plan shows that you are organized and professional, and that you’ve given careful consideration to how you’ll run your business.
After your company has been operating for a few years, your business plan can keep you on track to meet your original goals and set new ones as you look to the years ahead. It can also help you document ideas for growing or changing your business. Plus, if you reach a point where you want to sell the company, your business plan can be enticing to prospective buyers as it gives them a sense of the entity’s success and future potential.
Business plans vary depending on the type of business and other factors, but some of the common sections of a plan include:
- Executive summary
- Company description
- Market analysis
- Organization and management description
- Explanation of company products and/or services
- Marketing and sales strategy
- Financial projections
- Quarterly and yearly goals
- Funding pitch (if appropriate)
4. Securing capital if needed
Few businesses have a positive cash flow when they first launch. It takes time for their product or service to become known and for revenue to come in. Consequently, most businesses need “start-up capital.”Start-up-capital is simply the initial investment needed to start a business.
Fortunately, there are many financing options, as well as creative tactics for starting a business without going into debt If you don’t have savings immediately on hand or direct access to funds, you can look for people or companies willing to invest in your business to help you get started. It’s important that you research different ways to fund your business and how to get up and running with the minimum required resources.
5. Identifying and minimizing start-up costs
Most businesses have some debt in the beginning, but the less yours has, the faster it will become profitable. So, what do you really need to get started?
Is a nice office space a priority now, or could you get buy working out of your home or in a very simple office for the time being? You should ask these kinds of questions about all aspects of your business, from staffing to product/service development to customer support. Not only does pinching some pennies where appropriate minimize your debt load, the money saved on launching your business can be invested later in growing your business.
6. Marketing your business
How do you intend to market your business? Online advertising? Email blasts? Trade shows? Social media? Knowing how you will create some buzz about your offerings is crucial. You can have the best product or service on the market, but if nobody knows about it, you won’t sell a thing.
It’s important to do your homework here. Check out successful businesses similar to yours and see how they’re marketing themselves. It’s much more cost-effective to mimic others in the beginning rather than taking a trial-and- error approach. After your business starts to get some traction, you can experiment with your marketing strategy to see what delivers the best results.
7. Preparing for recording keeping and taxes
Financial records are arguably the most important records for a small business. Not only will potential investors want to see a clear financial picture in documents like profit and loss statements, you’ll want to have accurate records when tax season arrives.
If you haven’t kept financial records for a business before, it’s critical that you learn how to do so or hire someone who does. It’s also important to have the software and other tools you need to keep your financial records accurate and up-to-date so you always know where your business stands.
8. Maximizing productivity
One of the keys to profitability is productivity. This applies both to the products and services you provide and the activities associated with managing your business. Anything you can do to streamline and simplify your operations—especially in the early stages—will deliver a significant payoff as the years go by.
9. Becoming and remaining a market leader
The most successful businesses are those that not only figure out how to become a leader in their industry but also how to hold that position. Giving thought to this challenge before you get pulled into the daily operations of your new business can help ensure that you have long-term viability.
The Essential Ingredients for Success!
With a high-quality product or service, some advance planning, and a commitment to operational excellence, the sky’s the limit for your business. Put the work in up front and there’s no telling how profitable and valuable your company will be down the road.
In business, success is anything but guaranteed. But by following these nine steps, you put your business into a better position to last. To help your business reach its full potential, you need a partner in your financial growth. Click here to view Florida Credit Union’s business product offerings and see how we can help your business reach new heights.