Are you a person that prefers being your own boss, setting your own schedule and making a living doing what you enjoy? While starting your own business does have the above benefits, it also comes with hard work and some uncertainty. Before starting your own business, take the time to ponder all the benefits and risks associated with entrepreneurship.
If you decide that the benefits outweigh the risks, your first step in starting a business is creating a business plan. A plan will take time and thought to complete. It will outline your strategy for how to become a successful business and how to continue to grow your business for years to come.
Click on each step to learn more.
An executive summary is a brief overview about your business. It outlines the company’s profile, as well as the company’s mission, vision and goals. Often, the executive summary will be read by potential investors interested in your business.
The company description extends on the executive summary, as it goes into more detail about the different elements of your business. Consider including the below information:
- Background of the Business – Why and how was it founded?
- Mission of the Business – What is the purpose of the business? Why does the business exist?
- Vision and Goals of the Business – What will the business achieve in the future?
- Values of the Business – What values will describe the everyday atmosphere and work ethic of your business?
- Strategies of the Business – What steps will the business take to achieve its goals?
- Product or Service of the Business – What is the business selling or promoting? Does the product need to be copyrighted or patented? Does intellectual property already exist for this product?
- Organization of the Business – How will the business be structured? Who are the leaders in the business?
While many individuals have great ideas and innovations, many of these businesses end up failing due to the lack of market demand. To be successful, the business must generate a product or service that the market needs – meaning that the business’s target customer must be willing to buy the product or service. If not, the company simply will not generate the income needed to survive.
For this reason, it is important to conduct market research. A market research study will help you identify if your business can succeed in the current and future market environment. Here are a few key points to consider when doing your research:
- Trends and Characteristics of the Market
- Average Growth of the Market
- Demographics of the Market
- Description of Market Customers
- Customers’ Purchasing Power
- Barriers of Entering the Market
- Barriers to Overcome once in the Market
- Competition in the Market
- Strengths and Weaknesses in Comparison to Competitors
Once the research is conducted, you should compile all the information into a market analysis. From this, you can determine if your business can succeed in the market or if changes need to be made in order to succeed. You may also find that the market you wanted to initially serve may not be ideal as you first thought, but instead, another surrounding market may be more beneficial for your company.
Choosing your business structure is important when planning your business, as it will determine legal and tax implications your company or even you could potentially incur. Within the United States, there are six common business structures. Click on each structure to learn more.
Choosing your organizational structure is also important as it will help you outline all of the tasks within your company and determine which employees will fulfill these responsibilities. By creating an organizational outline, you can help prevent job functions from being forgotten or missed and avoid responsibilities from being unintentionally repeated.
Your business strategy will help you outline the steps you need to take to make your business a success. Consider the following items:
- Funding your business
- Financial projections of income statements, budget and cash flow statements, and expenses
- Steps to penetrate the market
- List of vendors you will need to use
- Research and development
- Growth strategy
- Distribution strategy
- Communication strategy
Creating a marketing and sales strategy is important, as it ultimately creates your customer base. Marketing is the avenue by which you make your customers aware of your product or service. There are several ways to market including:
- Public Relations
- Word of Mouth
- Printed Material
- Personal Sales
- Social Media
Once the customer is made aware of your offering, then a sales strategy needs to be implemented in order to close the deal. While sale strategies differ for each business, consider the following process:
- Identify your Prospects
- Determine the Leads with the Greatest Potential of Closing Sale
- Determine the Best Way to Reach Leads
- Implement your Sales Approach
Choosing your business name is one of the more enjoyable tasks of starting a business. Your options are almost limitless. You can either choose to name the company after yourself or name it something totally different. Whatever you choose, remember that the business name will ultimately reflect the tone of your company, as well as make up the primary branding component of your business. Also, be sure to check that the name you choose is not already copyrighted.
If you decide to choose a business name that differs from your personal name, then you may need to register it. Using a name other than your own is referred to as “Doing Business As” or DBA. Depending on the location of your business, you will need to register the name with either the county clerk’s office or with the state government.
Typically, every business needs a license or permit to legally operate. Depending on the state your company is located in and the type of industry it is associated with, you can determine if the business needs a state or federal license/permit.
There are 10 common industries that the federal government supervises and regulates. If your company falls within one of these industries, then you may need to obtain a federal business license.
- Producing, Importing, or Selling Alcohol | Alcohol and Tobacco Tax and Trade Bureau
- Producing, Importing, or Selling Firearms or Explosives | Bureau of Alcohol, Tobacco, Firearms, and Explosives
- Commercial Fishing/Fish and Wildlife | US Fish and Wildlife Serviceor NOAA Fisheries Service
- Agriculture | US Department of Agriculture
- Aviation | Federal Aviation Administration
- Maritime Transportation | Federal Maritime Commission
- Mining and Drilling | Bureau of Ocean Energy Management, Regulation, and Enforcement
- Nuclear Energy | US Nuclear Regulatory Commission
- Radio and Television | Federal Communications Commission
- Transportation and Logistics | US Department of Transportation
To determine which licenses and permits you will need to start and run your business, visit the SBA’s Permit Me tool.
For more information about Starting Your Business, visit SBA.gov.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.