Starting a small business and making it successful is the basis of entrepreneurship. While every business person has their own ideas of what will work and what won’t, there is something to be said about getting advice for your business. Advice can help you avoid the pitfalls that others suffered through on their path to success. Seeking, taking and acting on advice for your local business can create a shorter path to success for your business and should not be overlooked.
So, let’s take a look at what the small business entrepreneur should assess when considering starting a new endeavor.
The ideal small business idea or opportunity offers a potential for high return, with low initial investment. It focuses on a fast growing marketplace and there is something unique about the proposition.
The problem for the new entrepreneur is that “you don’t know what you don’t know.” But that need not be so. Just understanding the start-up process can make a big difference.
Here then are five steps for starting a new small business
1. Assess your strengths. Not everyone is born to be a classical pianist, and, by the same token, not everyone is cut out to be an entrepreneur. An “entrepreneur” is, by my definition, a person willing to take a risk with money to make money. If that idea lights your fire, step right up, but if it frightens you, think twice. The fact is, entrepreneurship is a risk, and so, ironically, you have to be willing to lose some money to make some money. Be honest and ask yourself if you are willing to take that risk.
Of course there are other attributes that are required to be an entrepreneur, including:
* Being a self-starter
* Having a willingness to work hard
* Possessing an ability to handle uncertainty
* Having self-discipline
Of all of these, I think risk-tolerance is the most important. This ties in directly to being willing to take on risk that was mentioned above. Once you take the risk, you must have the mettle to live with the idea of losing your investment while working toward success.
Find passion in you for the business; do not just think of an idea. A lot of small business owners and entrepreneurs are gaining success through the years not just because they used whatever idea that would bring loads of money for them and the vision that they would have cash rolling in to their bank accounts, but that it built upon their passion. Thus, there was built in motivation. The thought that they used is also their zeal, they became prosperous doing what they adore to do. Make sure that it is your passion and don’t think of it as simply business. Think of it as something you would be keen on to do in the long run. The new business ideas of yours, if it proves successful, can be a life changing event.
2. Choose the right business. Once you have concluded that you have the temperament to start a business, the next obvious question is what sort of business? When it comes to choosing a business, there are two types of entrepreneurs.
The first type of entrepreneur: This is a person who has a sincere love for something. They love is so much that he or she cannot imagine doing anything else. This is what they must do for a career. This is the passion oriented business I was referencing above. It might be the weekend gardener who loves the idea of starting her own nursery or the computer geek who wants to open his own mobile repair business. As long as you conclude there is a market for your beloved business, this is a fine way to go.
The second type of entrepreneur: A person who is not in love with a particular idea, per se, but in love with the idea of entrepreneurship itself. So the bottom line is this: Whether you love a certain profession or just love an idea, pick a business that you will love.
3. Write a winning business plan: A pilot would never fly from Seattle to New York without a comprehensive flight plan that tells him what direction to head, how much fuel he will need, important markers to look for along the way, and so on.
Well, your business plan is your flight plan for your new startup. Before you even open your small business, you need to thoroughly think through what the business will be, why it will be unique, how you will get customers, how you will handle the competition, and so on. That is your business plan. Not only will you use it to make sure you are on the right track, but investors will want to see it to determine whether your new business is a worthwhile investment.
As such, a big part of that plan will be your financial analysis: How much money will you need, how will you spend it, how much profit can you reasonably expect to make? Your financials will tell you. The best way to figure this out is by using the right software program.
Resources need to be classified and categorized. Your requirements for starting a business need to be identified like money, equipment, team, skills, and facilities and know how, etc. Build toward success, to accomplish whatever you have aimed to launch. If there is an issue of limited capital then expenses need to be minimized. Take one step at a time and make sure that every step you take is a robust one. This way, your model can be tested and if all goes well, the business will develop organically as time goes by.
4. Line up your funding: There are many places to find the money you need to get started. (Your business plan should spell them out.) It could come from your savings, credit cards, retirement accounts, a second mortgage, an advance on an inheritance, friends and family, or a combination of the above.
Markets need to be identified for your new business ideas – You have to know if there is a market for your business and if there is, you have to comprehend and categorize your target market for a business to become triumphant. Greater details of your target needs to be recognized such as their gender, age, lifestyle, income, needs, values, desires etc. It is important for you to know how much of that you would like to capture and to know the entire market share. You have to know who you want to notice your services and/or products and who you want to target. With no proven market to sell to, investing a lot is something you don’t want to do.
Familiarize with your competition. Research needs to be done to generate ideas on how your business will be uniquely different from your potential competition. Look where they are advertising, their price structure, product and promotions and where they sell their services or products. Something better or unique needs to be offered to the customers so that you can edge out your competitors.
The important thing is that you find enough money to get started properly. There is nothing worse than starting out with a cash-crunch. Under capitalization is a leading cause of new business failure.
5. Open up shop: Armed with a great idea you love, an accurate business plan, and enough funding, it is time to get started. Find a location and outfit the office. Don’t skimp on your computers and software since, for most businesses, these are the basic tools you will use to run the shop every day.
Vision and Goals
Having a futuristic vision for your small business. You must already see the business in your mind before starting a business. Visualizing the outcome of the business tends to help a lot. Your ideas, your resources, your time and energy, your patience all will be involved to be on the right track to success. Identifying with your goals is crucial. Achieving your ultimate desire of financial success can be possible with goals in mind. Goals act as measurable milestones and should be progressive as there are your stepping stones toward your ideal success level.