So you’ve decided to start a small business. Great move! First thing’s first, you have to figure out the idea behind that business, then, of course, there are several crucial steps you have to follow/implement to get that business up and running. The key to starting a small business is to ensure that you plan correctly. Plan out every aspect of the company that you can think of. The more prepared you are, the better chance you will make it.
This brief guide will review some of the critical steps involved with starting a small business. The first step, of course, is coming up with that killer business idea. Not every business idea will be brand new or something that has never been done before, but it at least has to have a unique spin. And you are a part of that uniqueness. What you bring to the table, your energy, your skills, your passion, your knowledge—this will all go into why your idea works and why consequently, you will be able to get your business off the ground. Ready to find out more about how to start your new business venture? Keep reading.
Planning Your Business: What you need to know
Did you know that just over thirty percent of all new small businesses will survive beyond the ten-year mark? Not exactly the most favorable odds. This is why it is critical to plan and approach opening your new business thoughtfully and systematically. Creating a blueprint to follow and sticking to that blueprint will help you launch and begin to run your company. So, what steps should you take as you embark upon this new business endeavor:
Step 1: Create a Plan
Once you’ve developed the idea that will make an impact and allow your business to thrive, now it is time to create a plan for your future company. Developing an actual business plan to this end is a good idea. Suppose you decide to pitch your idea to investors or even go for funding. In that case, you will likely need a business plan to help enhance your position and create an aura of credibility around your company. Among the components of your business plan will be the business name and basic information, an executive summary that outlines the skills and qualifications of the company principles, a financial plan component and future financial projections, and marketing insights to include information on competitors. Your plan can, of course, be more comprehensive, but these items should always be at the core of any business plan.
Step 2: Find a Location
Some newer companies may use the owner’s home as the headquarters as money can be tight initially. And if it works for your particular business, this is perfectly fine. However, you will need an actual physical location separate from your home in some situations. In that case, you will need to find a suitable place that you can afford. Renting office space in the early phase of your business may be the best way to go. Numerous online sites offer commercial lease postings; you might also enlist the aid of a real estate agent.
Step 3: Form Your Business
To officially create and launch your company, you need to form and register that company. Decide which type of business entity you are going to be. So, for instance, will you initially start as a sole proprietorship, an LLC, or a corporation? There are pros and cons to each of the business entity options. For example, you get liability protection with an LLC, but it can be more expensive and require more paperwork to start an LLC versus a sole proprietorship. If you are confused or need help navigating the various business structures, you should hire an attorney to help guide you through the process.
Upon choosing a business structure, you next need to name the business, choose a registered agent for the company, get an employer identification number, and fill out the requisite documents as mandated by your state or local government agency that will enable you to register the business.
Step 4: Open a Business Bank Account
Even if you are a sole proprietor, creating a separate bank account for your business is a smart move. Otherwise, the lines between personal and business finances can become blurred quite quickly. This can lead to problems regarding taxes, not to mention specific compliance issues. Once your business is registered, you can take this paperwork to a bank and open an account in your business name. This will give you access to a company checking account and business credit and debit card, making handling bills and other expenses a great deal easier.
Step 5: Get Any Permits or Licenses Needed
No small business guide would be complete without stressing the need for compliance every step of the way. You want to make sure that you are compliant with all federal, state, and local regulations. Otherwise, you could find your company penalized or, worse, forced to close down before it even had a chance to get going. For example, if you are opening a restaurant, you will need to obtain all necessary health and food safety permits before launching. This is key! And if you do decide to go for business funding, the lender will want to see that you have all of your required permits and licenses in place.
Step 6: Hire Employees
If you are a business that requires employees—meaning, you are not a one-person show—then the recruiting and hiring part will be essential to get your business off the ground in the right way. A strong team is crucial for success. There is no way around this. Which means you have to look for and hire the right people. Once you employ staff, you have to make sure everything is in order regarding employment taxes, the various insurances required and establishing a payroll system.
Step 7: Procure Funding
Getting funding to help launch a company for many small businesses is imperative. While you may have some money in savings, or you might consider pulling from either your home equity or a retirement account, odds are this will not be enough for what you need to start a small business. Again, here is where a solid business plan will come into play. As a new company, you have no track record of which to speak; a lender will be taking a chance on you and your idea. While many lenders may be hesitant to loan to newer businesses, some alternative online lenders work with companies that have been in business for a year. It is worth doing some research to see what options may be available.
Step 8: Promote Your Business
You’ve gone through all of the steps, followed any number of small business guides in getting to this point, and now it is time to promote your brand. How will you get customers if no one knows you exist? Creating a company and following the proper steps is very important, but marketing that business. An excellent way to start your marketing campaign is to avail yourself of the numerous social media channels out there. Social media is a free way to get the word out about your brand. Create a Facebook page, start tweeting, and accrue followers who might just become customers.
First Union Lending is Here For You
We work with small businesses across the US getting them the cash they need when they need it. If you require additional working capital, we can help. Call today and let’s get started together!