A business idea has been simmering around the periphery of your consciousness for years. Ebbing and flowing like the tides, pieces of it have come and gone from time to time.
Then it materializes in your head one day, fully formed.
The idea is clamoring to come to life, but there’s a problem.
You’re not yet sure how to turn this dream into a reality.
Stay positive: you’ve arrived at exactly the right place. We’re about to help you bootstrap that dream into a tangible entity. Here’s a checklist for starting your first small business.
1. Conduct Background Research
Your intuition is screaming the idea is sound. And, it probably is. Still, it’s a good idea to spend some time investigating its potential before putting a lot of cash and effort into pursuing it.
Seek answers to the following questions:
- Is there a need for it?
- Who is the ideal customer?
- Is there anything like it out there already?
- If so, what is the nature of the competition?
- What will you do to set your company apart from the competition?
2. Develop a Business Plan
Every journey requires a map of some sort to help you reach your destination in the most efficient — or the most desirable — way possible.
Your plan will use the answers to the questions above to make the case for your idea. You’ll explain its nature, the strategy you’ll use to pursue it, and estimate the amount of cash you’ll need to get it going — and keep it running. You’ll also list the key personnel and any equipment you’ll need, as well as your plan of attack to help set you apart in the marketplace (your marketing strategy).
If you’ll need outside financial support, this document will prove you’ve thought things through. It will also give others an opportunity to evaluate your potential for success and serve as a touchstone to which you can return to make difficult decisions.
3. Develop a Financial Plan
As we mentioned briefly above, you’ll need to figure out where your startup money will come from. Of course, before you can do so, you have to know about how big of an investment you’ll need to get your startup to your first profit.
Make a list of the costs you anticipate, such as licenses and permits, equipment, legal fees, the best small business insurance you can find, branding, market research, inventory, trademarking, grand opening events, property leases, and the like.
You’ll also need to get a handle on how much money you’ll need for ongoing costs, so you can establish a budget. Line items typically include rent, utilities, marketing and advertising, production costs, various supplies, travel expenses, employee salaries, and your salary.
A solid grasp on these numbers will help you determine where to seek your startup dollars — be it a bank, relatives, an investment firm, grants, your savings, or some combination of all of the above.
4. Decide Upon Your Legal Structure
Will you be a sole proprietorship, a partnership, an LLC, or a corporation? Dig into the options a bit to see which of these will best serve you in terms of liability, taxes, and the name of your company.
5. Choose a Name
Make it as simple as possible and reflective of what you do. Keep in mind it will serve as your internet domain name, so it should be easy to remember, spell, and type into a web browser. Come up with at least five ideas with which you can live and seek to register them; starting with your top choice first. Again, you’ll also need to make sure it’s available as a domain name for the web.
6. Seek the Required Licenses and Permits
The nature of your endeavor and the location from which you plan to work will determine the types of documentation you’ll need. Check with your state and local franchise tax boards to see what their requirements are.
If you plan to operate from home, make sure your city ordinances permit doing so. If you live in a neighborhood with an HOA, you’ll also need to clear your plans with the leadership to ensure you stay within your neighbor’s good graces.
7. Decide Upon an Accounting Approach
You’ll need this to create and manage your budget, determine your pricing, control your costs, and manage your taxes. There’s lots of software out there to help you do this if you’re starting on a tight budget. Be prepared to bring in an accountant when things take off, though.
8. Choose Your Location
First and foremost, you have to make sure the location you choose is the best one possible for the type of business you’re running. Consider all aspects of your operations. Will there be shipments and deliveries? Will you need a large staff? What kinds of equipment will be needed? Will you depend on foot traffic? All of these considerations and many more will come into play.
9. Pull Your Team Together
If you’re going to need people working with you, figure out what you need them to do — then develop job descriptions and look for people to fill the positions. You’ll need to decide whether you’ll have full-time people, part-time people, or contractors and freelancers.
Even if you’re going it alone, you’ll need a support system of friends, mentors, business coaches, and the like. Identifying these people early will provide a great deal of solace when situations arise in which you need counsel or assistance.
10. Implement Your Marketing Plan
It’s time to put your plan of attack into practice to attract attention to your business. Base your approach on your unique selling proposition and look for as many cost-free ways to get the word out as possible. Social media is always a good place to start. Keep the nature of your ideal customer in mind; target your messages to appeal specifically to that person.
11. Be Patient and Keep Trying
This checklist for starting your first small business will get you up and running, but the real work comes in keeping it going. There will be days when it seems everything is going sideways, and there will be days when you see decided victories. Whatever happens, maintain an even keel and keep working your plan. Reevaluate it every three months or so for effectiveness and make adjustments where needed.
Above all, there’s a simple principle for long-term success: stay patient and keep trying.