How to Start Your Own Small Business

How to Start Your Own Small Business

As a small business owner, I am constantly being asked how I did it. How did I start my own business? How did I know where to go and what to do? How did I learn about licensing and permits and tax regulations and incorporating and vendors and everything else that goes into owning and running a business?

The real question is, “How can I start my own business?”.

First you need to decide if you are going to buy a franchise or start your own business from scratch.

If you are hoping to buy a franchise the franchisor will be able to complete much of the work for you. That is part of the reason franchises are so costly to buy into. Ideally they provide a proven business model (do not mistake this for sure success) and already have vendors, equipment, inventory, operating procedures, training and marketing in place. However, you will still likely be responsible for securing a business permit or license. You will need to submit the required tax forms (state and federal). You will need to set up utilities (for brick and mortar businesses) and business bank accounts. You may need to find your own location or the franchisor may provide that for you. The franchisor may even provide a business plan and help you secure funding.

Whether you buy a franchise or start from scratch, there are a few basic steps to small business ownership. First and foremost is the written business plan. And yes, even the smallest of small businesses must have a business plan. Even if you don’t plan to ask for funding you should have a written business plan for your own purposes.

A business plan will force you to see your business idea in full clarity and detail. If your business plan contains all of the required items you will have everything in your hands to tell you if you can or should proceed with your business start up.

If upon completion of your business plan you decide that you want to proceed then you already have a road map in hand. You would have done so much research already that you likely will have provided the answers to most of your initial questions.

Secondly, you must determine your financial situation. Do you have enough cash or liquid assets to cover your start up costs? Will you have enough savings to cover your personal expenses for the first 6 months to 1 year? Will you require further funding? If you require funding, do you at the very least have 10 -30% of the total start up costs? If you apply for a traditional commercial bank loan or a loan via the Small Business Administration, they will require that you put up at least that much yourself before they even consider your application.

At that point you know if you need to put your business start up on hold or if you need to revise your plans. If you do not have enough funds on hand and realize that you will not qualify for a loan then you should seriously consider revising your original plan. Can you scale back on your dream business? Can you start smaller and then later build it up to the full scale plan?

Starting your own business requires a lot of leg work and research. If you have the drive but lack the know-how there are resources available to guide you. Resources are plentiful and that in and of itself can be a problem. Trying to navigate the maze of different resources often leads to further frustration. My advice? Start with the business plan. Use a one stop site that provides step-by-step help with the business plan and with all of your other start up needs.