If you are thinking about starting a small business, you are in good company. There are tens of millions of small businesses across the United States, and the Small Business Administration estimates that 54 percent of all sales in the country are derived from small businesses. These are promising figures, but you may think it would cost a small fortune to start your own business. The reality is that 44 percent of all small businesses are established with less than $5,000 in startup capital. With this in mind, you may be wondering what it takes to get your small business idea off the ground. Some prefer to transition to their new business rather than to make an abrupt change. This may be a safe route to proceed with as it minimizes the financial impact of your endeavor. You can accomplish this goal by following a few easy steps.
Develop a Business Plan
You may have been thinking about your small business for months or years, but it is important to get your ideas down on paper. The creation of a business plan forces you to think about who your competition is, how you plan to stand out in the marketplace, how you will market your services, what the overhead will be, how you will price your products and services and more. You should conduct substantial research before you get started to ensure that this is a viable business endeavor worth your time, energy and money.
Think About Finances
Finances are critical when starting a small business. One of the most significant reasons why small businesses fail relates to a lack of funds. Through the development of your business plan, you can determine if you need to take out a loan and the desired loan amount. You can also project when your business will start turning a profit and when you may be able to quit your day job to devote your energy entirely toward your business.
Get Your Feet Wet
When you are transitioning from your day job, you generally need to generate some sales to get started. This may require you to set up an e-commerce website and invest in inventory. It may require you to find a few clients that you can work with in your free time away from your day job. You may need to visit trade shows and street fairs to sell your goods. Think about the most cost-effective ways for you to start generating sales, and take the initial step to get your feet wet.
Plan for the Unexpected
All businesses face risks and perils, and this includes small businesses that are just starting out. For example, someone may get injured after using your product and may sue you. A client may get injured visiting your place of business and sue you. Insuring a small business is critical, and you can speak with your insurance agent about the right coverage for your needs. While the premium is regular overhead, you can typically deduct it as a business expense.
Grow Your Business With Care
Many individuals who start slowly can identify bottlenecks and issues with their business plan early on. These can be remedied right away and before the company has lost a considerable amount of money. Your ability to continue working at your day job while you navigate through the startup phase can help you to avoid financial hardship and can promote the highest level of success with your business.
The dream of being your own boss is common. Many people want to enjoy the independence that comes with deciding how to run and grow their business, how to spend their days and more. They also enjoy obtaining the full amount of profits that are generated from their daily efforts. If you are thinking about getting started with a small business startup, you can easily get the ball rolling by following these initial steps.