Starting Your Own Company – What You Need to Know


While there are many perks to owning your own enterprise, it’s not without its challenges.Small businesses are the backbone of the U.S. economy. According to the Small Business Administration (SBA), in 2012 there were 28.4 million small businesses, accounting for 48.4% of all U.S. employment.

While there are many perks to owning your own enterprise, it’s not without its challenges. According to the SBA, half of the new businesses that are started don’t make it past five years.

So what can you do to be among the businesses that succeed? The answer is simple: preparation, preparation, preparation. With careful planning, you can put yourself in a better position to succeed.

Here are some steps to help you get there:

  • Create a business plan. Before you invest any money in your business, it’s critical that you think your business through by writing a business plan. A business plan is a formal document that outlines your goals for the business and how you plan to accomplish them. Specifically, it should include:
    • A summary of your business
    • A description of your company and your product(s)/service(s)
    • A market analysis
    • A competitive analysis
    • Strategies and tactics for achieving goals and objectives
    • Management team specifics
    • A financial plan

The SBA offers free resources to help you with writing your plan. For more information, visit www.sba.gov.

  • Obtain capital. Your business plan should tell you how much money you’ll need to start and fund the business. Your next step should be to identify sources for those funds. Will you use your own funds, solicit investors or try to obtain a bank loan? It’s essential that you complete your business plan and start looking for financing early in the process, especially if you require money from a lender. Keep in mind that lenders will want to see that you are putting up some of your own money, or have some “skin in the game.”
  • Determine your business structure. As a business owner, you’ll need to determine the structure of your business. You can have the business in your own name or create a corporation or limited liability company (LLC), which can help protect you from liability. You should talk with your accountant or attorney to identify the structure that makes sense for your business.
  • Study your competition. Look at other businesses that offer the products or services you do. What advantages or disadvantages does your product or service have in comparison? What do your most successful competitors do differently? It pays to spend the time to get to know your marketplace.
  • Develop a marketing plan. Your business plan will help you determine where you want your sales to be. A marketing plan is an outline of your strategy for finding and retaining customers for your business. Your marketing plan should address who your main customers are and can help you decide what tools will help you reach them.
  • Talk to customers and prospects. In these challenging times, it’s critical that you don’t just push products and services to your customers but take the time to build relationships with them. Try to understand customer needs, and deliver solutions and added value that help you meet customer expectations.
  • Open a business bank account. One of the biggest mistakes business owners make is mixing their business and personal finances together. That’s why it’s critical to set up a separate business bank account. You’ll get a better handle on your business expenses when you keep them separate from your personal ones.

Business is a lot like life: there are no guarantees, but with hard work, perseverance and good solid planning, you could well be on your way to success. And that’s a win for us all.

 

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