5 Things You Need to Know Before Starting a Business
So, you’re looking to start your own business to be your own boss, but do you know everything there is about creating a startup? As most business owners will say, it’s not easy managing a company. From keeping employees happy, to engaging with customers, there’s a lot on business owners’ plates.
While it may seem overwhelming, there are many rewards to running your own business, as long as you’re fully prepared. Below, we’re going to cover some of the most important things you need to know before starting a business. Take a look!
Your Business Plan
You’re going to need a plan if you want to start a business. Going into business blindly is a recipe for disaster, which is why it’s essential that you do your research to ensure you’re starting a business that will be successful. A business plan is a comprehensive document that goes over your goals, how you’ll attain these goals, and how you plan to handle bumps in the road.
The Small Business Administration provides a business plan template that can help you get started. The components of a business plan include:
- Executive summary: Overview of your company, its mission statement, and basic information
- Company description: Information about your company, including consumers you plan to serve, the problems you solve, and the strengths of your business
- Market analysis: Research on your competitors to show how your business will fare against other businesses in your industry
- Organization and management: Explain the structure of your business, our employees, and who’s in charge and of what
- Service or product line: Detailed information on the products or services you offer and how they benefit your customers
- Marketing and sales: Your marketing strategy and how you plan to draw in and retain customers
- Funding request: An outline of your funding requirements and where the money will go once you receive it.
- Financial projections: A financial outlook for your company for the next five years, including forecasted income statements, balance sheets, and cash flow statements
How You Plan to Finance
Opening a small business isn’t a cheap endeavor. You’re going to need money for a variety of expenses, such as licenses, rent, payroll, inventory, equipment, technology—the list goes on. And, most likely, you don’t have the money you need to open your business unless you began budgeting and saving for multiple years.
That’s why you’re going to need a plan on how to finance. Some ways you can raise money for your startup include:
Different Types of Business Structures
Not only do you need to know how to finance your business, but you also need to understand how to structure it. We don’t mean who’s in charge of who and what person makes the decisions. We mean the legal structure. There are four main types of business structures, including sole proprietorships, partnerships, limited liability companies, and corporations.
If you’re a small business owner, you’re most likely looking to start a sole proprietorship, partnership, or limited liability company or partnership (LLC or LLP). Before you open the doors to your shop, it’s important you know the different types of business partnerships. Choosing the right one can help your company flourish and become successful, while the wrong legal structure can sink your company to rock bottom.
Your Marketing Plan
Next, you’re going to need to plan on how you’re going to attract and retain customers. Your marketing plan is your strategy for doing so and will include how you manage your social media accounts, advertise, and form connections.
To create a marketing plan, follow these steps:
- Write a mission statement to determine what you’re going to accomplish
- Create a budget and a timeline to ensure you hit your goal
- Conduct market research to identify your target audience
- Create a plan on how you will reach your audience, such as influencer marketing, advertising, internet marketing, etc.
Finding the Right Employees
Lastly, you’re going to need a supportive team to help your business succeed. Hiring the right employees is essential to the success of your business. One bad employee can ruin the entire culture of your business, which is why you need to take your time and use all of your resources to attract and hire the right candidates. This means posting a detailed job description, using employment screening services to vet candidates, and hosting in-person interviews.
Before you open the doors to your new business, you need to be prepared. Taking the time to write a business plan, secure financing, choose the right business structure, create a marketing plan, and hire the right employees will give your business a competitive edge to ensure it exceeds.