So you’re ready to take the leap and start your own business. In today’s economic environment, the opportunities for small businesses are abundant, but so are the risks. Here we’ll take a look at five simple tips to start a new business that you can take now and will help reduce those risks and increase your chances for success.
1. Develop a business plan
Just like building a home, building a business begins with a plan, a blueprint that will guide you in creating a firm foundation and solid support. It will not only help you identify capital expenditures and daily operating costs, but will also help you develop a price structure for the goods or services you intend to provide. If you plan to rely on partners, investors, or a bank for your start-up costs, a business plan will help them see where their money is going and how their investment in your business will benefit them. Most importantly, a business plan will help you test the feasibility of your idea — helping you make adjustments now, without having to learn from costly mistakes later.
2. Secure the financing
Most small businesses need some financial help to get started, whether from family, investors, banks or some other source. Be sure your funding is secured early, and leave time for the necessary paperwork and processing. If you have built a solid business plan, you’ll have something to show to loan officers and potential investors who’ll want to see a return on their money. Another, more innovative method of funding that has emerged in the Internet age is crowdfunding. Platforms like Kickstarter and Indiegogo let burgeoning entrepreneurs raise funds online to meet their startup goals. Be sure you understand the rules of the organization you use. Kickstarter, for example, requires that you meet your funding goal in full before you receive any money from your campaign. Indiegogo lets you keep whatever funds you raise, even if short of your goal.
3. Know the legalities
Ah, we’d all like to avoid the dreary side of business life — the paperwork — but we can’t. If your business requires licensure or credentialing, be sure you have the proper and current forms submitted. If you have investors, be sure they understand the exact nature of their obligations — and yours! Do not skimp on this step, and unless you are a corporate attorney, you may want to contact someone who can make sure you haven’t missed anything. Understand your liability in the worst-case scenario, and ensure the continued profitability of your business in the best.
4. Get customers before you launch
The time to build your client base is BEFORE you open your doors. Be sure you have the tools you’ll need — like an effective logo, an easily navigable website, and business cards — so you’ll be able to promote your business, both in person and online. If you plan to use social media to connect with new clients, broaden your reach and build relationships, be sure you have accounts set up on the most popular social media platforms (e.g., Facebook and Twitter). Responding promptly and effectively to queries now can mean repeat business later on. You may also want to apply for membership in business associations that share your interests. The connections you make today can help you avoid pitfalls tomorrow.
5. Know your market
This may sound obvious, but it is essential to know the fundamentals of your market before you take the field. That means understanding your potential customers AND your potential competitors. Look for a niche that nobody else can or will fill. Find ways to distinguish yourself from your closest competitors. Also, study industry websites and publications to know what market trends and state regulations may affect your business. Perhaps most importantly, identify and target the customers you want, and determine how you’re going to cultivate those relationships.
The bottom line — some diligent preparation now can save you a world of headaches and heartaches later.