So, you’ve decided to start your own business—congrats! While you’re undoubtedly excited, we know you also have a lot of questions. Whether you’re ready to open your business in a month or are just now starting on this journey, take some time to prep with a few of the steps we’ve outlined below. Every business is different, but all of them have to start somewhere—like with these five steps you’re about to read.
1. Know your business plan
Every business needs a plan before it can get off the ground. You need to start with the basics: what goods or service your business will provide, how it’ll provide those goods or services to customers, and whether you’ll operate from home or from another location are a few things you should have answers to before your business opens to the public. However, these beginning items aren’t the only things you have to consider—you’ll also need to look ahead. What will your business look like a year from now? When can you expect to make a profit? Having a basic plan in place will help you determine your steps to success.
Funding your new business
How you’ll fund your business is a major part of your business plan. Funding your business isn’t a one-size-fits-all venture, either. How you decide to fund your business depends on your business structure and can affect operations in the long run. There are dozens of ways you can fund your business, but here are a few of the most common:
- Personal funds: You can use your own cash to fund your business, known as bootstrapping, or dip into your savings.
- Loans or grants: Apply for traditional loans from a bank or credit union, or you can consider applying for grants (which don’t require repayment). If you’re starting a small business, you might also qualify for an SBA loan.
- Crowdfunding: You can raise money from people online. A popular way to do this is through a crowdfunding platform, like Kickstarter.
- Investment: Seek funding from angel investors or a venture capital firm. Angel investors are wealthy individuals who invest in startups in exchange for equity. Venture capital is a type of private equity financing that provides capital for early-stage companies with high-growth potential.
2. Know the rules
Researching things like permits and licenses can be tedious, but it’s also a step you can’t skip if your business is to see the light of day. Look up your local ordinances on any permissions or information you might need before getting started. If you’re feeling overwhelmed with all the information you find, consider speaking to a lawyer or other expert who can walk you through the process. You can even talk to city officials about specific questions you have—many of them are available to speak with you if you make an appointment. Knowing the rules now will help you from dealing with unexpected complications later.
3. Know your resources
Did you know that many local Chambers of Commerce can help you find the information you need for almost any industry? You can meet others in your field of work, learn from new business owners like yourself, and gain some very important knowledge on making your business a success. Some of these resources are even free to access and use—the ones that aren’t may still be worth your time and money to explore further. You can also consider talking to friends or colleagues who have recently undergone the process of opening a new business to get even more useful information about everything you need to know to open your business.
4. Know your community
Whether you’re opening a franchise of a well-known national company or starting up a shop of your very own, it’s crucial to know the community you’ll be part of. There will likely be many opportunities for you to participate in local events or activities and you will also get to know the people who may become your customers. Talk to other local businesses about ways they interact with the community. If everyone else on the block is decorating their storefronts for the holidays, go find some seasonal decals to add to your windows. Showing that you’re part of the neighborhood you sell to will help your customers see your full value.
5. Know your “why”
Starting a new business isn’t easy (you already know that). And some days may be discouraging, whether you have few customers to serve or are still dealing with electrical work that’s taking forever to finish. On those days, remember why you wanted to start a business in the first place. What motivated you to take this step? Write your answer down and place it somewhere you can access it easily to remind you of why you’re doing this in the first place. You can even share your motivation with others so they can help you remember what you love about what you do.
Bottom line
Opening a business takes a lot of work—but you can also find a lot of reward. You have the opportunity to make a difference in some way in your community, so plan ahead, get familiar with the basics, take advantage of your resources, and remember your reason for taking this step. By this time next year, your business may just be a household name.
