According to the U.S. Small Business Administration, at the end of 2018, there were 30.2 million small businesses operating in the United States. These small businesses make up 99.9% of all businesses in the U.S. as a whole. With such a massive amount of small businesses vying for the affection of the American consumer, how do you set yourself and your small business apart? What steps should be taken to create a successful small business? Below, you will find steps and tips for building a successful and strong small business.
You can never do too much research. Even if you think your business idea is completely unheard of and unique, taking time to confirm that is never a bad idea. The main driving force for any small business is that they fill a need that someone may have. When your toilet is broken, you call a plumber. When you need your hair cut, you visit a salon. What role does your business serve? What do you have to offer? Is the market for your services/products large enough? Do you have any competitors? Once you have those ideas set, laying the foundation for your business gets a bit simpler. Making sure you know your own limits is important as well. If you have strong fears or doubts, diving into starting a business may not be your best choice.
Selecting a Business Model and Financial Plan
There are multiple options for small business owners when it comes to your business entity. You can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The type of entity you select for your business influences many different aspects of your business, from the way you file your taxes, your liability, and even the name of your business. To ensure you are choosing the correct entity for your business, it can sometimes be a good idea to consult and attorney or a CPA. They are better educated in each type of entity and can show you the risk and reward that comes with each. They can also advise you on if you need to change your business entity as your business grows and changes. There may be licenses or permits you will need to acquire for your particular type of business also. During the planning of your business you should start the application process for the documentation you are required to have.
Not every small business demands copious amounts of money to get started, but knowing how you are going to pay to run your business and who you can turn to for help with your finances is one of the most integral pieces of owning and keeping a business running smoothly. What kind of expenses will your business have? Is there a need to find an initial investor or take out a loan in order to support your business until you start turning a profit? What is your expected time frame for starting to create profits? If you have strong answers for all of these questions, setting up structured budgets for each aspect of your business should be your next step in creating your rock solid financial plan. Another effective way to manage your finances for your business is through an accounting program. You can set up and manage this accounting system yourself, or hire an accountant to manage these numbers for you.
Selecting your Business Name and Location
Your businesses’ name is one of the most important parts of building a successful business. This will be one of the main identifiers of you and your brand. What kind of message are you trying to convey? Your name should encompass the identity and purpose your business serves. Coming up with a name can be done a multitude of ways. You can use a name generator, ask you future customers to name your new business, or just look up synonyms and describing words for the type of business you do. At the end of the day, you just have to go with your gut.
Location, location, location! This is so important when starting a new business. When selecting a location for your business you need to consider the demographics for the people in that area. What is the typical age range for that neighborhood? What is the median income for that area? Will your location have sufficient foot traffic or be easy to locate? Of course, not all businesses need to have a store front location. Another option is running your business from the comfort of your own home. Just make sure that you have a designated space for where you will conduct business. You will also want to insure that you have a reliable phone line and internet connection in order to receive customer contact.
Assemble Your Team
Will your business require employees? If so, now is the time to start the interviewing process. Look for good potential candidates to fill the roles you need. Now is also a good time to determine what benefits, if any, you will be providing your employees. Explore health insurance options, short term disability options and anything else you feel you should offer. Hiring independent contractors is another viable option for staffing your business. Just make sure you have independent contractor Agreement in place.
Promote Your Business
In this modern age, a business is only as strong as their online presence. When you start to create your business model, decide which online platforms would work the best for your type of business. Facebook, Linked In, Twitter and even Instagram have become a very modern places to market even the smallest of businesses. Hiring a social media marketing consultant may be a good way to build your online presence. Search Engine optimization and targeted online advertising are other proven methods for bringing customers into your business.
Paper advertisements are also another way to promote your business. It may seem outdated, but older customer bases appreciate that you are appealing to people of all ages with your diverse marketing. Having a combination of marketing methods can be very beneficial and help create your identity among current and future customers and clientele.
Looking at the Bigger Picture
Not all businesses end up successful. According to JPmorganchase.com “Roughly a third of new businesses exit within their first two years, and half exit within their first five years.” If you decide to take the plunge and start working for yourself make sure you are thoroughly educated about the risks and how to best protect yourself and your assets. Even if it seems like an impossible dream, just remember, everyone who was ever successful started small. Steve Jobs started building computers in his garage and now Apple is one of the most widely used and recognized tech brands on the planet. The more time and care you put into the structure of your business, the better your chance is for a successful outcome.