Many people would like to have the freedom to be their own boss, but starting a small business is an intimidating task. There are many moving parts that go into successfully running a small business, from taxes and regulatory requirements to hiring and training staff.
There are many sources of information available to potential entrepreneurs, and a great deal of support available in the community. Pedro David Espinoza outlines the process of starting a new business and recommends whether it would be a good move for your finances and for the future of your career.
1. Have a Unique Idea
Before you start a small business, you need to have a good idea about what your business would offer to the local community. If you are in a town full of pizza restaurants, for example, you will need to set your restaurant apart so that you can claim the amount of market share you deserve. You may want to buy a wood-burning oven so that your business is set apart from the many competitors in the field.
In addition to setting your business apart from the crowd, you will need to appeal to a defined niche in the market. Your company cannot be all things to all people, but if you target your services and marketing to a specific niche, you can focus your attention on the segment of the market that works for you. For example, you may want to cater to busy families on the go. In this case, you will want to focus most of your business on takeout and delivery, with less of an emphasis on dine-in settings.
Having a unique idea will also protect you from possible copyright or business lawsuits. Lawsuits are expensive and can cause a great deal of trouble, so it is best to go in with a completely original idea.
2. Locate Wisely
When you are looking for a place for your business, it is a smart idea to do a complete site study. You should look at the average family income, demographics, companies that already exist in the area, traffic patterns, and tax and regulatory concerns. If you contact your state or city’s economic development organization, they may be able to get you a site study or find you a reference for a local firm who can do the study at an affordable price.
You will also want to purchase local mailing lists for your area. Sending coupons in the mail is a great way to get new business in the door, especially if you live in a middle-class, budget-conscious area. The coupon will bring you new business, but you need to concentrate on making these new customers into repeat customers with the quality of your service or product.
3. Hire Well
Looking for employees for a new business is one of the most challenging tasks you will face. When you start a new business, members of your family may feel that they are entitled to jobs and may take advantage of you.
You should take as much care hiring members of your family as you would take with members of the general public. You need to make sure that all of your employees have the company’s best interests in mind and that they are dedicated to excellent quality and customer service.
4. Be Careful with Money
It is paramount that you are careful with your finances. When you start a new business, you will be a target for the IRS and state revenue organizations. Make sure that all of your books are kept up-to-date and that the accounting is done honestly. Be aware of all of your tax obligations, including paying estimated quarterly tax.
Carelessness in this regard could lead to the loss of your business and also the loss of any financial stability you have achieved on your own. If you run your business completely above-board, you will have no reason to worry.
5. Don’t Quit Your Day Job
Don’t quit your day job until you can be sure that your business is profitable. If you have a spouse with a well-paying job, make sure that they keep their job so that you will have a reliable source of income and benefits. It may be best to wait to pay yourself a salary until the business is well-established.
6. Network
Networking is hugely important when it comes to starting a new business. Use all of your personal and professional connections to help you with your new business. It is also wise to join the local Chamber of Commerce so that you can find other local business owners.
When you have a small business, the most important thing you can do is to make meaningful connections with customers and other businesses.
7. Financing
It can be tough for a new business to receive any financial assistance. Check with your local economic development organization and with the federal Small Business Administration to see whether they have loan programs at a favorable rate for new businesses.
8. Be Charitable
Starting a new business may be financially difficult in the beginning, but as soon as you can afford it, you should put money into charitable giving. Charitable giving is a valuable way to encourage the community to think of your business in a positive light. Sponsor a local children’s sports team, Scout event, or road race. Using your logo on the promotional materials for these groups will bring you more visibility.
Starting a New Business
These tips will help you get your new business off the ground. Making the investment in a new business is nerve-wracking, but if you are sensible with your time and money, you should be able to run a profitable business. Above all, hire wisely and handle your money circumspectly.
If you are able to meet these requirements, you will be much further along the road to business independence.