Getting ready to start your own business can be an exciting but confusing time. Before you start your first business, there are many things you need to know to ensure your success. Sally Podrebarac explains the beginning stages of starting a new business, including seven steps you should take as you begin.
Step 1: Find Your Niche
Before you start your own business, it is a good idea to do thorough market research. You will want to know what the needs and pain points are in your area. You will need to see where the gaps are in the area’s offerings and where your target audience may be looking for a solution.
For example, if your area does not have enough housecleaning businesses, it may be a good idea to enter the field. This could be because there is an increasing number of rental properties or Airbnbs in your area, all of which need reliable cleaning services.
It is not a good idea to go into a community with a non-original business idea. For example, there are so many pizza places in many communities that it is difficult for all of them to earn enough money to get by.
Without differentiating your product to make sure that it is hands down the best in town, you may doom yourself to a life of mediocrity and lackluster sales.
Step 2: Your Business Plan
Writing a great business plan is your next step toward success. You need to know exactly how much money you expect to make, what your expenses and revenues should be, and how your business will be founded and organized. Without a business plan, it is next to impossible to get bank funding for your company.
Your business plan will also guide you in hiring new employees for your company. You will need to know who is in charge of which functions in your company.
Step 3: Funding
The next step that you will need to follow is finding money to start your business. Generally, it is challenging for new startups to get funding from bank sources. You may want to look into business incubators (especially for technology and biotechnology companies), private funding from friends and family, and loans from the federal Small Business Administration.
Overall, when you are first starting a new business, don’t quit your day job. You may need it to fall back on if your idea fails, and you may need to keep your health benefits for yourself and your family while you are building a successful company.
Step 4: Finding Space
You will need to find space to start your new business. Many people choose to run their startup businesses out of their homes at early stages. This can be an excellent setup for parents who want to stay at home with their children while they are in school. If you are looking to serve the public, you will need a good office or storefront. Be sure that you negotiate the best price with your broker.
Step 5: Hiring
Hiring for a new business can be tricky. It is tempting to fill the company with your friends and family, but they may not always be the best employees. If you do hire people you know, balance them out with professionals from the field. Running a family business is rewarding but has its own set of pitfalls for the unwary.
Step 6: Managing Your Money
One of the most crucial steps in starting a new business is handling your money wisely. You will need to make sure that you are complying with all state, local, and federal tax regulations and paying local business registration fees. You will need to make sure that you have a proper payroll system that helps you withhold the right amount of taxes for your employees.
Be particularly cautious with your taxes. Newly self-employed people often forget to file their quarterly estimated tax because they forget that they are subject to it. This can lead to penalties and punishments.
Step 6: Managing Your New Business
When you have established your new business, you can be proud of your enterprise. You will need to understand how your local market works and how your business fits into the local economy. Your new business can be a vital part of the local scene if you make sure you are offering a new or differentiated product or service.
Step 7: Reach for Resources
Don’t forget to find organizations that can help you with networking and many other aspects of running your business. Local chambers of commerce are great places to start, as is the Rotary Club. Giving back to the community is not only rewarding. It can help to promote your business naturally.
Pathways Toward Success
While about half of all new businesses fail in the first five years, you can increase your chances of success by following these seven steps. Sally Podrebarac believes that starting a new business can be a profitable and rewarding activity.
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