You've dreamed of being your own boss, and it's finally time to make it happen. You've decided to make the leap and start a small business. Now, all you need to do now is get started. Easy-peasy, right?
Every startup owner can agree that getting a business off the ground is one of the most adventurous and rewarding experiences on earth. Will the concept "go viral?" Will you be able to keep up with demand? Will you revolutionize the industry? Amid all the questions, there is one thing for certain: you're going to need a strategy.
Here are 6 ways to kick-start your small business for the best chances of success.
#1 Write a business plan. For many entrepreneurs, the potential for a successful small business either ends here, or it takes off. First, print and fill out the free business plan template from the Federal Government's Small Business Administration. The business plan is a time-consuming thing to put together, but it's well worth it. Brace yourself for some illuminating "ah-ha" moments about your organization.
#2 Write it again. Your first draft of the business plan will shed light on the areas you're lacking. Instead of getting discouraged, treat those areas as action items. Create a "to-do" list based on the gaps in your original plan. For example, line up suppliers and establish payment terms for future transactions. Once your final draft is seamless, you're ready to move on.
#3 Find funding. Some small businesses pitch elaborate proposals to venture capitalists, constructing beautiful presentations to convince risk-taking benefactors to lend them cash with no guarantee of payback. Other ambitious start ups look to crowdsource benevolence from friends and family members. Still others try to bootstrap it, scraping together just enough each month to limp along until luck strikes. These methods sometimes work, but the best way to finance a start up is through a small business loan from your local Credit Union. Here's why:
- You can keep your emergency fund, kids' college savings, and retirement account intact.
- You won't put lifelong relationships (familial lenders) at risk because of complications with money.
- You won't pay as high rates as if you max out personal credit cards in order to finance a business.
- The interest paid on a small business loan is tax-deductible, which can't be said of many other forms of funding.
- An expert handles the loan's paperwork, legalities, and regulations that instill fear into start up first-timers. So you know you won't inadvertently miss something and slip out of compliance.
#4 Get smart. Read everything you can get your hands on about business structure, licenses, permits, laws, and employment requirements. You'll need this information soon after – if not immediately upon – registering your new entity with the government. Instead of taking a passive role, be proactive by educating yourself on these subjects long before you need the information. You'll be glad you did.
While you're at it, grab a few books about management, human behavior, and workplace dynamics. According to researchers at California State University, reading offers cognitive benefits that go far beyond the consumption of information. These benefits, or "soft skills," can play a vital role in your ability to run your small business – both immediately and in the long run.
#5 Establish a backup. Stay employed while you get your business off the ground, if possible. Starting a business can be an adrenaline rush, but don't drag dependents through risk or hardship if it can be avoided. Make the new organization a side gig until you're confident it can bring in the same income your paycheck provided. Once your new business can support itself and pay the bills, then make a clean break.
#6 Gather support. Before you start cranking out widgets, surround yourself with the people you'll need to succeed when questions arise. This means having a lawyer on speed dial, as well as the local SBA office, an accountant, and even a business mentor – someone who's started successful ventures in the past. Of course, don't forget friendly local banking professionals to administer your company's loans, deposits and owner withdrawals. Touchable aspects of your business – location, equipment, brochures – are important, but nothing can set your small business on the right foot quite like a strong roster.
Mitigate risk by taking these 6 steps before launching your enterprise, and someday, when your business is a success, you'll look back and be thankful you did. For questions, call Coosa Valley Credit Union to speak with a small business loan professional.
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