The Year 2018 is just around the bend, and you’re at the stage of your life where you’re weighing which is possibly going to be more regrettable: Starting your own business and failing, or not starting it at all? While not every business is a sure-ball, and most successful ones didn’t start with things running already absolutely peachy-keen, there are some tried and tested ways on how we can help keep losses at bay.
So if you’re thinking about starting a small business in 2018, these tips are for you!
1.Who’s your market?
If a good holiday vacation takes good planning, research and making key financial decisions, how much more when starting your own small business?
First, check if there will be enough consumers of your desired product or service. It sounds easy enough to answer, “Sure, there are.” But actually ensuring can save you much money and stress down the road you wish to take.
Researching about your intended market can be done in two parts:
- Ask potential customers about the product or service they’re using and get their thoughts on what they would want it to be or on how it could be improved.
- Then, there are the existing business owners near the area where you wish to put up yours.
With the information that you will garner from both producers and consumers, you will get to see both sides of the coin, and thus, can have a clearer idea of what better or best to offer.
2. What’s your business plan?
Now that you know what to offer exactly and that there is a sufficient amount of people that will take it, the next question is how are you going to deliver and make profits?
Having a business plan means making an outline that will answer the following:
- What your business is
- Where it is going to be
- Who is going to run it
- When it will start
- How will you make profits
As with planning vacations, what’s your itinerary going to be, and is that the best way for you to achieve your intended goals?
Answering the questions above is important, not only in establishing your product or service and what it’s position will be in the market at first, but also in securing a business loan.
In fact, the most crucial part of the plan is the one-page Executive Summary at the beginning of the document.
Forbes writes down the following as the key points that your Executive Summary should state:
- The name of the business
- What product or service it will provide
- The competitive landscape in the local market
- The differentiator that will set the business apart from its competitors
- The management team and each member’s experience in the industry, marketing plan
- Financial projections
3. Getting Funding
Speaking of funding, you also need to calculate how much budget you’re going to need to start and run it for the first month or so. That way, you’ll be able to give an exact estimate of your capital should you opt to get a loan from the bank.
If you plan to tap into your savings, computing your budget is also a good idea if you wish to pitch your proposed business to family members as well.
If that doesn’t work out, the good news is that big banks are currently approving about 25% of small business loan applications, which is why you have to have a well-written business plan.
If you are gearing towards getting a loan, check your credit rating first. The higher the score, the more likely lenders are going to approve your application.
Basically, they just want to make sure that your business is sound or founded and that you’ll be able to pay them back according to your agreed payment timeframe.
Starting a business won’t be a breeze. But if you wish to enjoy reaping the benefits of having one later, it’s time to start work on it early on.
4. Mind your setting
Fishermen know this all too well, sometimes, all it takes is a lucky spot.
Choosing the right location for your business cannot be more crucial. First, it’s because you must go where your market is.
Is your product or service for high-end consumers, then, by all means, don’t consider the streets. Are there any shops or stores there that offer the same product or service? Does their product have a solid fan-base already in the area?
Apart from these, consider also that your rent, legal requirements, and other costs also depend on where you’ll set up shop.
Take the following scenario as noted by Rorit Ahora in his article on Forbes.com:
A busy street is a great location for a restaurant – unless there is no place to park. Having great food and good pricing may not help if customers cannot find a place to park without getting a ticket.
5. Legal matters
Sorting out the legalities of your business (e.g. what legal structure does your business provide) at the onset can not only affect the amount you need to pay for your taxes, but it will also help protect your personal assets.
Ahora suggests consulting your lawyer with the process. To help you form your business structure, be it LLC, S-Corp, or C-Corp, he also commends firms like Incorporate.com.
Are you already listed as the federal employer of your business? It will help when you already need to pay your taxes.
Also, securing an employer identification number or EIN means that you can open bank accounts that can be used for the payroll and operational expenses of your business.
That being said…
6. Acquire due permits and licenses
Secure all permits and licenses required for your business to legally operate in your chosen location.
Depending on the existing regulations of each area, an aspiring restaurateur may need to acquire both a vendor’s license and a food handler’s safety course certificate.
Another good tip is to contact the local chamber of commerce in your store’s area. They can help you widen your network by inviting you to events and by sharing their membership list with you. They can even be present when it’s finally time for your shop’s momentous ribbon-cutting.
Speaking of which, getting a horde of people on your first day is amazing. But that’s not the goal. Turning them, in the real sense of the word, into customers is.
Does your service deliver its promise? Has your research translated into a new solution or a competitive advantage over other similar stores? Did you do enough marketing, smart marketing?
All these questions will be answered by time and by how much you gave of it to make your store, if not outstanding, well-worth revisiting, and far from regrettable.
Even if things don’t work out in the end, don’t give up. Now you have more experience that you never had before. Learn from it. Move on.