A great small business always starts as an idea, but you have to transform that idea into action. That’s where many new business owners can start to feel overwhelmed. It’s understandable to feel overwhelmed by all the things that are required to get a business started but getting going is easier than you might think.
Like any big goal, if you start by breaking it down into smaller tasks, you’ll be able to tackle enough of the actions necessary to get started. Here are 6 critical steps to simplify the process of starting your own small business.
The key to a successful small business, especially in the startup phase, is to keep things simple and your overhead costs low. Business costs don’t just mean your monetary costs, but also your time.
Many new business owners fall into the trap of trying to create the world's most robust business plan. You’re only going to need that if you’re seeking investment or financing, and even if you will be seeking either of those things down the road, we always recommend small-business owners start by testing their ideas first before investing lots of time and money.
So, to get started, create your own simple, one-page business plan that is a high-level overview of the small business you’re about to start.
Write a one-page business plan with the 5 following components
· Define your vision. What is the destination of your business?
· Define your mission. Different from a vision, your mission should explain the reason your company exists.
· Define your objectives. What are the main goals that will lead to the accomplishment of your mission and your vision?
· Outline your basic strategies. How are you going to achieve the objectives you just defined?
· Write a simple action plan. Bullet out the smaller task-oriented actions required to achieve the stated objectives.
Plan your budget
In order to keep your costs as low as possible, you’ll need to determine a budget to get started. If you’re self-funding, be realistic about your numbers and whatever you anticipate your budget to be. Having an additional 20 percent tacked on for incidentals and taxes is also in your best interest to manage your burn rate.
Your burn rate is how much cash you’re spending month over month. It’s an important number for you to figure out in order to determine how long you can stay in business before you need to turn a profit.
You should set up your business with profitability in sight during the first 30 to 90 days of operations. It’s possible. But have a budget reserve so you can survive if things go leaner than expected.
Decide on a legal entity
Filing paperwork to start a business costs money. Often, depending on your state, it can be a pretty penny. You’ll need to account for city or municipality licensing, state incorporation or business entity fees, and more. Do a thorough search ahead of time to determine what the filing fees are for your city, county, and state before starting your business.
Often in the initial “test” phase for your small business, it can be wise to start as a sole proprietor, as it means less paperwork and up-front expenses. That can save you some big-time cash while you determine the viability of your business. Do be aware though that acting as a sole proprietor can put you at personal risk, so you’ll want to weigh the benefits versus risks and then speak with a local attorney or tax professional to decide which is better for your needs.
You can always later file for a business entity once you’ve proven in the first three to six months of business that you’ve got a viable, sustainable business model.
Take care of the money
Whatever business entity you decide on, keep the funds separate from your personal bank accounts. This is a big mistake that makes tax time and financials so confusing. It’s really easy to set up a free business checking account with your local credit union or bank. All you need is your filing paperwork, sole proprietor licensing information and an initial deposit to get set up with most financial institutions.
Don’t pay for an account or get any kind of credit lines yet, just get a holding place you can keep your business funds separate from your personal accounts. This should take you no more than an hour at the financial institution of your choice.
Get your website
Regardless of whether your business will be brick-or-mortar or online, you’ll need a website, and that means securing a domain and hiring a Web Designer. Popular domain sites such as HostGator and GoDaddy will allow you to search for the website domain address of your choice and purchase it for as little as $9.99 per year.
If you’re starting an online business, you can tie your domain to an online shopping cart and storefront such as Shopify for a low monthly fee, or you can build a basic drag and drop website on Wix or Weebly. Both are less than $100 a month.
Make some sales
You now have enough of a foundation now that you can start attempting to get some sales. Try to spread the word in inexpensive and creative ways.
If you have a service-based business, get involved with your local chamber of commerce or small-business chapter immediately and ask what resources are available for you to speak, present, or share information about your business. If you have a product-based business, test the viability of your product at local swap meets, farmers' markets, or other community events to determine what consumers think of your products.
Drive traffic to your website through simple organic or paid advertising.
You can follow these six steps yourself with a tiny budget. It’s a fantastic way to test the viability of your small business before throwing all your time and money into an unproven idea.
Now, if you need protection for your business, you also need to have business insurance.
CIII Insurance Services provides a broad range of Commercial, Cybersecurity, Employee Benefits, and General Liability products. We have aligned ourselves with some of the finest carriers to deliver these products to you. Get in touch with our team today by visiting C-3ins.com.