Entrepreneurship, it’s been said, is the great equalizer. No matter where you were born, where you were raised or what sort of education you’ve received, every American has the opportunity to try their hand at starting their own business.
But as romantic a notion as being your own boss is, beginning a business is no small feat. Building your company will take hard work, plenty of time and a good amount of money. To grow a healthy business, be sure to start out right.
Here’s what you need to know about starting your own business.
Step 1: Start with an idea
Every good company begins with an idea. It could be something you’re passionate about – but it doesn’t have to be. As long as there’s a need for it in your community (or you can create a need for it), you have the potential to be successful. The Balance has a list of 101 small business ideas to help you get inspired, with everything from photographer to dog walker to tax accountant listed.
Another option for the aspiring small business owner is to open a franchise. The franchisor will usually offer training and guidance, which means there’s little to no prior experience required. And, with the support of the larger business, there’s greater chance of success, according to the International Franchise Association.
Step 2: Discover your market
Once you know what your goal is, it’s time to do some research. The only way to be successful is to provide your customer base with something they want or need. Find out whether the business you want to open makes sense in your area; You wouldn’t want to open a snow removal company in Arizona, for example.
Next, find out if someone else is already providing the services or products you plan to offer. If so, you’ll need to find out what that company’s pain points are, what they’re doing that makes them successful and what they’re lacking. You’ll need to differentiate yourself from this competitor, but you also need to learn from their mistakes and successes.
Step 3: Write a business plan
Once you’ve determined what sort of business you want to start and how it fits into your market, it’s time to write up a plan. Your business plan is like a roadmap that’ll tell you and interested parties (think: investors, lenders, landlords, etc.) how you plan to make money in the first three to five years. It’ll explain the market and what needs you’re fulfilling.
According to Business News Daily, some commonly overlooked yet highly important aspects of your business plan include:
The just-in-case plan
Not everything in life, or in business, goes smoothly all of the time. There will be something that doesn’t go according to plan, but luckily, you can account for that. Business News Daily suggests having a goal to meet within a specific timeframe, and a backup plan in the event that the goal isn’t met.
Employee engagement plan
Not all businesses will hire employees right away, but those that do need to make sure everyone hired is as excited as the founders. Working for a brand-new company can feel like a risk for some people, so it’s critical that everyone feel engaged and a part of the team. Spell out exactly how you’ll inspire this feeling in your employees.
The one ingredient every single business needs to find success is the right marketing plan. If people don’t know about you, they can’t support your company. Write out what you intend to do to get the word about your business out.
Step 4: Gather funds
Every business needs money to get started. There is some sort of capital – equipment, supplies, space or something else entirely – that you need right away to get your idea off the ground. Perhaps you have cash saved up that you can use, or maybe you need to go to an investor or lender for funds. Either way, you’ll need to determine:
- How much you need.
- Where you can get the money from.
When applying for a loan, your business plan is the most important asset. This will show lenders how serious you are about making money through your business, and give them the same confidence in your ability to succeed that you have. The more confident you lender is, the more likely you’ll receive the funding you need.
Step 5: Fulfill legal requirements
Once you’re ready to actually start your business, you’ll need to determine what business structure you want, as well as your name and location. Your business structure can be a:
- Sole proprietorship.
- Limited liability company.
Which one you choose will affect how your business name is legally written and how you file taxes. Once you have your name figured out, it’s time to get it registered. Additionally, be sure to buy your domain name as soon as you’ve determined your business name.
Starting your own business takes a lot of hard work and time. But once you get started, being your own boss can be highly rewarding. Don’t be afraid to take your success into your own hands and start your business.