How To Start a Small Business
Winston S. Churchill once said, “Success is not final; failure is not fatal: It is the courage to continue that counts.” Most small business owners know all about the kind of courage that takes. The vast majority of successful entrepreneurs started out working for another company, where they learned their trade. And one day, they decided to strike out on their own and work for themselves, doing things their way.
Obviously, these business owners had the courage to start and continue. But if that’s what it takes to succeed, then why do so many businesses fail to make it and more than 3/4th of startups shut their doors within the first two years?
The answer, in many cases, is that the business owners who don’t succeed haven’t made the transition in their heads from being a waiter taking orders at the table to being the owner of the restaurant. They never go from being a road repair worker to owning a construction company. They don’t have enough experience or know-how to handle the responsibility of a vehicle dealership after a stint as a chauffeur.
Here are some of the things to keep in mind when starting a new business:
Learn the Business from the Management Side
Many entrepreneurs start a business with great enthusiasm, only to find themselves losing focus and wondering what to do next when the time comes to put their dreams into action. That’s because many aspiring business owners have the fatal notion that if they learn the trade, they can run the business that does the trade. Some find out too late that running a business, whether it’s a store, restaurant or auto body shop, takes a very different set of skills than simply working for one.
Running a small business is more than just learning to run the business. It is about having the right attitude, shouldering certain responsibilities, delegating the remaining tasks, writing business plan, creating goals, and above all, committing to those goals.
Having the right mind-set means thinking like a successful business owner does. Networking events, SBA services and finding a mentor are all proactive steps you can take to think like a successful entrepreneur — and succeed like one.
Entrepreneurs Wear Many Hats
A major part of the entrepreneurial attitude is being open to performing multiple tasks if needed. As a new business owner, you may have to take on a broad range of responsibilities, such as finance, customer service, hiring, technology, legal, purchasing, marketing and planning.
Even if you are not delegating some of these tasks or cannot afford to delegate in the first place, none of these tasks can be ignored. Are you capable of wearing multiple hats if need be? You may need to learn more about technology, marketing or bookkeeping software. Being flexible will help you discover what skills you still need to learn — or delegate, as the business grows.
The Importance of Goal-Setting
Setting goals is another crucial step in starting a small business. Your business goals need to be realistic, and can be related to any metric you choose, such as sales revenue, number of clients, or the variety of product lines and services you offer.
It is always better to aim high rather than aim low and miss the golden opportunity of achieving some of these goals. How do you increase sales revenue from $100,000 to half a million in the first year? Maybe adding more products will help you reach the target.
Working backwards can let you recognize how to work out the strategy efficiently. If the goals are too high, you may try to break them down into manageable parts. More modest goals are easier to attain than one gigantic goal.
Write a Business Plan
Writing a business plan has nothing to do with your handwriting or your typing ability. All you need is a good understanding of how the business works and what needs to be done in order to make it run smoothly. Most of all, you need to have the will to follow through with the plan.
Your business plan should contain the following details:
- The type of business
- The person running the business
- The person who owns the business
- A description of the business
- The type of market the business is in
- A list of competitors the business will face
- Things needed to operate the business
- Current and expected sales revenue
Starting a Business in New York
The state of New York has its own unique set of tasks to accomplish when you want to start a new business here. Besides choosing a business idea very carefully, you will need to:
Choose a business structure for your new venture.
There are plenty of choices when it comes to how you structure your business, including sole proprietorship, LLC, S Corporation and C Corporation. A sole proprietorship is the easiest to get started with, but is also potentially very risky: Your personal assets are on the line if your business can’t pay its bills.
The other three kinds of business entity provide more protection for you as the business owner. For most small businesses and startups, an LLC is a relatively inexpensive way to go that is easy to set up, and this business type also has favorable tax treatment from the state.
Get your tax requirements and business licenses in order.
It is actually very easy to register for a federal tax ID number that allows you to do business as a company, place wholesale orders with vendors, and more. With the state of New York, if your company will be selling a physical product, you will need to register for a Sellers Permit. If you’ll have employees, the New York Business Express website can help you with other tax obligations, such as registering for employer tax, unemployment insurance and more.
If your particular industry requires you to have a license in order to operate, be sure to have that in place before offering your services.
Open a bank account for your new business.
Although many new business owners provide a lot of the initial funding from their own savings, it’s not a good idea to continue mixing your personal finances with those of your new company. Research your nearby choices of financial institution and open a checking account at the one that best meets your needs. It is also a good idea to open a business credit card, but relying on credit to pay bills isn’t a good long term solution. Use credit carefully as you grow your business.
Set up bookkeeping and accounting solutions.
Starting a business successfully requires being mindful of where every dollar comes from and where it goes, right from the start. Choose accounting software as well as advisors who can help you use it in the optimal way.
Learn about marketing your new business online.
Even purely brick and mortar businesses, such as restaurants, need to be savvy about their web presence. You’ll need to establish accounts on social media sites like Instagram, Facebook and Twitter, as well as claiming your Google profile and creating an account on review sites like Yelp and Google Reviews. Do a little market research and see what your competitors are doing, and hire an online marketing company if you need help.
Funding a Startup Business
Financing is another aspect that your business needs in order to cover initial costs, from buying machinery, equipment, furniture and tools to paying rent and other overhead costs. You can look into Small Business Administration (SBA) loans, or contact Capital Connex to find out about other financing options for your startup.
Starting a small business can be a financially rewarding experience, whether it is an online business or a brick and mortar company, and whatever your product or service may be. However, you need to know the many different factors that go into creating a truly successful small business. The above information will help you get started creating a more fulfilling career as a small business owner in New York.