The obvious tasks such as naming the business and creating a logo are important, but what about the unheralded steps that are equally important? Whether you are planning a small business or developing a detailed marketing strategy, the workload can quickly pile up. Take this 10-step guide to planning a small business from a lightbulb in your head to a real enterprise instead of spinning your wheels and guessing where to start.
1. Identify areas of improvement.
It’s likely that if you’re planning a small business you already have an idea of what you’d like to sell online. Research companies in the industry you are interested in. Learn how the leaders are doing it, and figure out how to do it better. If you believe your business can deliver something others cannot (or deliver the same thing, but faster and cheaper), or you have a solid business idea and are ready to make a business plan.
- Identify your “why.”
- Consider franchising your business.
- Come up with a business name.
- Identify your target audience.
A major detail needs to be ironed out during the ideation phase. If your idea isn’t something you’re passionate about or if there’s no market for it, you may want to think of another idea.
2. Prepare a business plan.
You need to ask yourself a few important questions once you have your idea:
- How does your business serve a purpose?
- Who do you sell to?
- How do you plan to achieve your goals?
- What will you do to finance your startup costs?
A well-written business plan can answer these questions.
New businesses make a lot of mistakes when they rush into things without considering these aspects of the business. Your target customers need to be identified. Who will buy your product or service? What’s the point of coming up with an idea if there is no evidence that there is a demand for it?
It is best to follow these steps:
- Research the market.
- Prepare an exit strategy.
By creating a business plan, you can determine what your company’s future holds, how it will overcome any potential obstacles, and how it will sustain itself.
3. Make a financial assessment.
Planning a small business and starting it has a price. Hence, you’ll need to figure out how to cover those costs. Will you need to borrow money to start up your business? Do you have the means to fund it? Have you put money aside to support yourself until your business becomes profitable if you leave your job to focus on it? You should find out how much your startup costs will be.
Startups often fail for lack of capital before they reach profitability. As it can take a while before the business begins to generate sustainable revenue, it is never a bad idea to overestimate the amount of startup capital you need.
- Analyze the break-even point.
- Keep an eye on your expenses.
- Take a look at your funding options.
- Choose a business bank that is right for you.
4. Establish your legal business structure.
You must decide what kind of entity your company is before it can be registered. Your business structure has an impact on everything from how you file your taxes to your liability if something goes wrong.
- Sole proprietorship. It is possible to register for a sole proprietorship if you plan to own and operate the business by yourself, and are responsible for all debt and obligations. There is a direct impact on your credit if you take this route.
- Partnering. As its name implies, a business partnership also involves multiple parties being individually liable. You don’t have to do it alone if you can find a business partner who has complementary skills to your own. If you want your business to flourish, it’s usually a good idea to add someone to the mix.
- Corporation. To separate your liability from that of your business, you may want to consider forming a corporation (such as an S corporation, C corporation, or B corporation).
- Limited liability company. The limited liability company (LLC) is one of the most common structures for small businesses. With the tax benefits of a partnership, this hybrid structure has the legal protections of a corporation.
It is ultimately up to you to choose the type of entity that is best for your current needs and future goals. There are many legal business structures, so you need to learn about them. If you aren’t sure what to do, it wouldn’t hurt to talk to a business or legal advisor.
5. You should register with the IRS and the government.
To legally operate your business, you will need a variety of licenses. A business must be registered with the federal, state, and local governments, for example. Before you can register, you will need to prepare several documents such as,
- Operating agreements and articles of incorporation
- DBA (Doing business as)
- EIN (Employer Identification Number)
- Income tax forms
- Permits and licenses from the federal, state, and local governments
6. Obtain an insurance policy.
The purchase of the right insurance for your business is an important step to take before your business is officially launched, even if it slips your mind as something you’ll do eventually. You need to ensure you’re properly protected when dealing with incidents such as property damage, theft, or even a customer lawsuit.
7. Create a team.
To get your company off the ground, you will need to hire a great team.
8. Choosing your vendors is important.
You and your team probably won’t be able to do it all alone when running a business. This is where third-party vendors come in. From human resources to business phone systems, companies exist to help you run your business better. Depending upon your business, your vendors may be or become distribution channels or even ecosystem-based business partners. Learn more with this guide to partner relationship management from WorkSpan.
9. Promote yourself and brand yourself.
Creating a brand and getting a following of prospective customers in advance of actually selling your product or service is crucial before you begin selling.
- Company website. Build a website for your company and build your reputation online. Furthermore, it is a great way to interact with current and potential customers.
- Social media. Once you launch, use social media to promote your new business, perhaps as a promotional tool to offer coupons and discounts to fans. Your target audience will determine which social media platforms you should use.
- CRM. Customer data can be stored in CRM software to make your marketing more effective. You can reach customers and communicate with them effectively using a well-designed email marketing campaign. Building your email list strategically is essential if you want to be successful.
- Logo. Be consistent in using your brand logo across all platforms so people can easily identify it as yours.
Keep these digital assets relevant and interesting by uploading relevant, industry-related content.
10. Expand your business.
As an entrepreneur, your launch and first sales are just the beginning. Keeping your business afloat and profitable requires constant growth. Your business will take time and effort, but you will get what you put into it. Licenses and permits from the states, the federal government, and the city