So, you have a great idea for a small business but don't know how to make it a reality? Following this 10-step guide can greatly increase your chances of turning your idea into a sustainable and profitable business:
First, look closely at your business idea and determine if there is demand for the goods or services that your business will offer. Conventional wisdom says that a business must:
Does your idea satisfy one of those?
Conducting market research, attending focus groups, and doing questionnaires and/or telephone interviews are some of the ways that you can gauge the market.
The questions you need to answer with any form of market research are:
In addition, you should evaluate your own motivation and desire to run your own business. Are you prepared to put in the effort needed to make your business a success?
Benjamin Franklin famously wrote, "By failing to prepare, you are preparing to fail." This quote exemplifies why a business plan is crucial.
Create a business plan that details your future business, from the initial launch phase, to how you plan to expand and grow your brand in the marketplace. All business ventures require at least some form of a business plan.
If you will be approaching investors or lenders, a formal business plan will be necessary. This must include detailed financial data on your proposed business that conforms to specific standards required by both individual and institutional investors.
If you are not seeking any outside investment, a more basic business plan is sufficient. Still, this plan should clearly map out how you intend to achieve your business goals in an easy to understand format.
In order to calculate the expenses your business will incur, it is recommended that you compile a spreadsheet detailing all expected monthly expenses, including:
In order to understand how much of an initial investment will be needed to start your business, it is helpful to calculate the total projected expenses for your entire first year of operation.
Several different options exist when it comes to the business entity you choose to operate under, be it a sole proprietorship, limited liability company (LLC), partnership, or even a corporation. This decision will impact several aspects of your business, including the way you will file taxes, your company name, and your personal liability for the debts and obligations of the business.
Remember, you can always change the entity type to better mesh with your needs as the business develops. A consultation with an experienced business law attorney prior to choosing a business entity can help you tremendously.
The name you choose will represent your brand to the outside world. Ideally, your business name should reflect your company’s image and values.
Before registering your chosen company name, you need to be sure that is not already in use. Depending on where you live, the first place you should check is with the state or county’s business register. In general, the business names of all sole proprietorships, LLCs, corporations, etc. must be registered when they are filed.
Furthermore, if you intend on having an online presence and would like your domain name to be the same as your business name, you will need to determine if your business name is available to serve as your domain name as well. You can do this through services like GoDaddy or with the help of an experienced IP attorney.
You should also make certain that your business name doesn't infringe upon any existing trademark or copyright. You can do this by searching The U.S. Copyright Office’s database.
Almost all businesses require some type of permit or license to operate, and certain types of entities need more than others. Small business license laws vary from state to state, so you will need to look into what is required for the specific type of business you are setting up in the state where it will be formed.
All businesses require proper accounting, but not all need their own accountant. Whatever accounting system that you decide on, it is crucial that you determine how your company will manage its budgets, inventory, vendors, and customer sales, not to mention its taxes. The accounting aspect of your business will probably change as your business grows. But, some accounting system needs to be in place from day one.
As with many other aspects of your business, the physical setup and location of your business operations will depend a great deal on the type of goods and services your company will offer. A private office, shared office space, retail store, warehouse, or an online shop are all good places from which your business can operate and your goods and services can be marketed and sold.
As the saying goes, "teamwork divides the task and multiplies the success." Whether you plan on hiring full-time employees or outsourcing to independent contractors, the sooner you get these positions filled, the faster your business can grow.
Your marketing plan will allow you to express how you intend to promote and sell your business to the world. Emphasize your unique selling proposition (USP) to help potential lenders and investors know why your business will stand out in the market.
Nothing can substitute for perseverance and hard work. But, once you have successfully completed these ten steps, you should be on the road to establishing a lucrative business and entrepreneurial success.
Whether you are starting a business or managing an existing one, it is a good idea to have an experienced business law attorney whom you can consult with and who can help ensure that your business and marketing plan succeeds.
Working with an experienced business law attorney is the best way to ensure that you avoid making critical errors when setting up and/or operating your business that can cause your business plan to fail.
For more information on starting a business, contact a business law attorney who is licensed to practice and experienced in the state in which your business will be formed.