As a result of the COVID-19 pandemic, many people have lost their jobs, while for some people who are still employed, their salaries have been slashed. According to experts, the effects of the COVID-19 pandemic have increased the rate of unemployment in such a way that this rate is projected to continue to the highest level since the great depression. As a result of the increase in the unemployment rate, there are more people who are unemployed than the number of job vacancies available. This, in turn, has made looking for a job tough and very competitive.
In reality, many successful businessmen and women who are now millionaires did not have college degrees or millions in their bank accounts before starting their businesses. If you have listened to them before, what is needed to start a small business is, first of all, an idea, commitment, and hard work.
In this post, we are going to walk you through the steps on how to start your own small business. You are going to also learn how to make your business grow to become successful. Make sure to follow the steps carefully, do not rush the process, and with time, your small business will grow to set the pace for others to follow.
How to Start Your Own Small Business
1. Determine the type of business that is best for you.
In order to start a business that will be successful, you need to know what kind of business you are interested in doing. Once you have answered this question, you will be on the right track to kickstarting your business. For example, if you are employed and you need an extra source of income, then you need to consider businesses that are flexible (Legit Ways to Make Money Easily Online) and which will not take much of your time. On the other hand, if the reason why you want to start a business is because of a failed business, then you need to identify the cause of the business failure (5 Causes of Business Failure. Link) and look for ways to rebuild the failed business (5 Ways to Rebuild a Failed Business. Link). But if you have never started any business before and you want to start one, then you need to ask yourself the following questions and answer them honestly and sincerely.
a. What skills do you have?
b. What kind of business do you have a passion for?
c. What tools are needed to start a business? Do you have them? Are you ready and willing to learn them?
d. What areas do you have expertise in?
e. How much capital is needed to start the business?
f. What is your lifestyle like?
g. Do you have what it takes to start and manage a business?
In answering the above questions, there should be no room for hypocrisy and exaggeration.
2. Find and choose the best business idea.
You need to be realistic when identifying and choosing a business idea. Make a list of different business ideas that you have and try to answer the following questions for each of them.
a. Do people actually need these new products or services that this business will produce?
b. Who is it that needs these products or services?
c. Are there people in this business that produce the same products or services?
d. Am I going to compete favourably in the market?
e. Is my business going to fit very well into the market?
f. Does my business solve a problem that others cannot solve?
g. What makes my business unique?
h. What are the special offers my business will bring to the market?
Your ability to answer the above questions honestly and sincerely for each business idea will help you to identify and select the best business idea that has the highest chances to succeed.
3. Create and develop a Business Plan.
In a nutshell, a business plan is a manual that shows the processes that your business will follow from the beginning of the business to the establishment of the business and then to the growth of the business. It is an important tool that will guide your business from start to finish. It also describes how your business will develop from the starting point to the finishing point.
The importance of a business plan is:
i. It helps you to monitor and keep track of your progress as your business grows.
ii. When soliciting for financial aid from investors, a business plan makes it easier for your investors to have a review of your business and approve your proposal.
You may be wondering: what information is included in a business plan? Well, we have got you covered.
The following information should be included when creating or developing a business plan:
a. The Title Page: This page should contain the proposed name of your business. Be sure to do thorough research before selecting a business name.
b. Executive Summary: This is a concise summary of what your business is all about, which includes a business description, the problem your business is going to solve, and how your business will solve the problem.
c. Business Description: In describing your business, you should answer the following question: What does the market look like now and what will it look like in the future?
d. Business Tools: In this section, you need to list the business tools you need in your business, both the ones you need to learn and the ones you would utilize in order to make your business successful.
e. Market Strategy: Here you need to explain how you plan to sell your products or services in the market.
f. Competitive Analysis: In writing your competitive analysis, you need to identify the strengths and weaknesses of your competitors and how you will surpass them.
g. Design and develop plans: You need to describe your products or services and give a detailed information on how you will develop them including the financial requirements.
h. Operation and Management Plans: You need to specify if your business is a sole proprietorship or a cooperative kind of business that will need employees.
i. Financial Factor: You need to answer this question in this section: How would you raise funds for your business? Is the source of funding sustainable?
When writing your business plan, you need to be as detailed and concise as possible. Also, take into consideration that your business plan will continue to change as your business grows.
4. Outline your finances and expenses.
Starting a small business would need an initial capital to cover for expenses. There are two types of expenses to take note of:
a. One time expenses. These expenses are incurred once from the beginning of your business until the end. They include expenses on trademark registration, insurance, licenses, and permits.
b. Reoccurring expenses. These are expenses that keep occurring as you run your business. They are expenses on production, employees’ salaries, utilities, and rent.
It is important that your start-up capital should cover these expenses.
There are different ways to raise funds for your small business, which include loans, crowd funding, and grants. It is important to use your capital judiciously in order to cover all the expenses your business needs to start up and run smoothly.
5. Identify the type of business structure that is suitable for you.
There are different types of business structures. They are: a partnership, a cooperative, a sole proprietorship, and a limited liability company. The type of business structure you select will determine your business name and expenses. Although you can start with a particular type of business structure and change to another as your business grows, you may also do research and consult in order to know the right business structure for your small business. Also remember to sign a non-disclosure agreement at the initial stage if your business is a partnership type of business structure.
6. Choose a Company name and register it.
It is good that you know that your business name will play a very crucial role in every aspect of your business. You need to choose your company name carefully. Before choosing a business name, you need to check if it is available, trademarked, or used by another person. If your business structure is a sole proprietorship, then you need to register your business name with a state or country clerk. But if your business structure is a limited liability company, or a cooperative, or a partnership, then you have to register your business name when every stakeholder has filled out and signed all the necessary documents.
7. Collect and prepare all permits and licenses needed to start your business.
In order to start a business and have it run smoothly without unnecessary disruption due to a law suit, you must get all the permits and licenses needed to start the business. The licenses and permits your business requires will depend on the location and the type of business structure you adopt. It is advisable to research and know the licenses and permits applicable to your business in the startup process.
8. Get an Effective and Efficient Accounting System.
For your business to run effectively and efficiently, there is a need to have an accounting system. The accounting system will help you keep track of the revenues and expenditures, set rates and prices, create and manage your budget, and set up employee payrolls. The accounting system will definitely save you the stress of doing all these things manually.
9. Identify and Prepare your Business location.
There is no doubt that your business location will affect its productivity. Your business location can be your home, a rented apartment, or a site. When selecting a business location, you should choose a location where your business will perform efficiently. Your business structure will determine the location of your business. Your business location should be free of distractions and inconveniences.
10. Identify and employ the right people in your business.
If your business needs employees, then you need to be careful while selecting or choosing them. Employees can make or mar your business. Your ability to identify and recruit the right people will go a long way towards making your business successful.
The following suggestions are a step-by-step guide to finding the right employees.
a. Itemize your business objectives and goals clearly. Your employees should know the objectives, goals, visions, and missions of your business.
b. During the hiring process, ask the right questions and identify the characteristics of the ideal employee for your business.
c. Make the business interesting and attractive to employees by offering incentives, bonuses, and commissions.
11. Advertise your Business.
Having finished setting up your small business, it is now time to advertise and attract customers to patronize your products or services. To achieve this, you will need to create promotional offers for customers, like referral bonuses and discount offers. This will enable you to make more sales in your business and also gain more publicity. Advertising your business should be a continuous process as you improve your products or services and as the business grows too.
In summary, starting up a small business can be difficult and challenging sometimes especially when you are confused of where to start from, but with this steps discussed above, starting your own small business has been made easier like never before. All you need to do is to be patient, study the market, strategize and re-strategize, be consistent and always improve on your products or services, and then you will be successful in your business.
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