How
to Start a Small Business
in 9 step ?
in 9 step ?
In this tutorial, I am going to teach you the
basics of how to start a small business, which are the backbone of the economy.
They help many people become employed while creating a good income for the entrepreneurs
themselves. However it is a noteworthy fact that in most cases, 50% to 95% of
small businesses fail within the first 5 years of opening, according to the
U.S. Small Business Administration. The main reason for these failures is the
lack of proper planning.
Today, we will take a look at the nine major
steps for how to start a small business successfully and retaining it beyond
the first five years.
1. Create a List of Ideas
Before you start, create a
list of ideas describing the business you would like to start. Find inspiration
in various sources including your own experience, hobbies or from news reports
and your environment in general. Brainstorming will provide you with a valuable
source of business ideas. As you learn how to start a small business, your
first step should always be to compile a list of all of your ideas, including a
small description of each as this will help you to choose your bests idea later
on.
2. Analyze the Ideas:
After compiling your list,
the second step is to analyze each idea. The best way is looking at each's
Strengths, Weaknesses, Opportunities, and Threats; this is known as a
SWOT-analysis. Some basic points that you will have to analyze in each of your
business ideas are:
i) Which of the customers’
needs will be satisfied through the products/ services that you are offering?
ii) What is the customers’
demand for quality for your product/service?
iii)
Identify your competitors!
iv) Will this business suit
my personal lifestyle?
These business startup
guidelines will help you to identify the possible risks and potential
advantages of each idea; they will guide you in choosing the best ideas to work
further on.
3. Define the Business Idea
This important step for
discovering how to start a small business is planning, having a clearly defined
idea as well as its limitations and its details. You will need to define the
following:
i) Which products/services
will my business offer to its customers?
ii) Who are my customers?.
iii) How do I sell/offer my
services/products to these customers?
Answering these questions
will help you to understand the nature and limitations of your business as you
develop your idea.
4. Develop Your Business Idea
After you have selected a
business idea and clearly defined it so that you are clear as to the business
you want to start, the next step is to professionally develop that idea. You
need to conduct market research as well as investigate the legal and financial
framework for the business you have chosen. For new entrepreneurs, it is highly
recommended that the development of your business idea be discussed and
evaluated by experienced business professionals. This allows you to get
insights into technical issues that you may encounter further down that you
have not yet thought about.
5. Prepare a Business Plan
It is said that proper
planning prevents bad performance. Now that you know which business to start
and you have developed your idea, the next step is to prepare a business plan.
This is an important challenge for any starting business, and so it should be
carried out with diligence.
Usually, the business plan
will include, a detailed analysis for each of these pieces:
i) Executive Summary
ii) Concept of the Business
iii) Business management
iv) Industry and the
competition
v) Finances
Having realistically worked
through a business plan you should be further assured that your business idea
is actually viable. Part of the process of learning how to start a small
business includes failure! If you face problems and find your concept is not
viable, then it is better to return to alternative ideas and reconsider these,
starting the process over again. It may take you a few ideas to find a winner,
so persistance wins the day.
6. Choose a Business Form
Now that your business plan
is ready, select a business legal form. Usually one of the following options:
i) Sole-Proprietorship
ii) Limited Liability
Company
iii) Partnership
Discuss your choice with a
business professional as each of these business forms have their own pros and
cons.
7. Register the Business
Once you have chosen the
business legal form, register your business with your local city or county
government to avoid legal problems in future. Having a business license also
helps you gain your customers’ trust.
8. Create a Timeline for Execution of Plan
As you are almost ready to
execute your business plan, define a time line for the execution of each of
these steps. This is where you determine priorities as well as giving you more
insight into the time and resources you should expect to invest to execute each
step.
9. Execute the Plan & Start the Business
The last step to start a
small business is the actual execution of your business plan. Never take this
part lightly! Dedicate yourself to the new startup by taking interest in each
and every activity related to your business and follow common sense business
ethics and etiquettes. Closely monitor activities and performance of the
business on a regular basis, changing or adapting as required. This will help
your business grow even further.
As you learn how to start a small business, take
these 9 steps seriously as it will give you a leg up on your competition.
Surround yoiurself with competant advice that goes beyond the basics of this
small business guide you are reading now. What do you think? Tell me below as I
sure would like to know.
The guest article is
written by Michael Perry
