The Small Business Administration reveals that 98% of all businesses in the US are small businesses. If you consider the critical reasons for starting a business—to utilize spare time, to have a flexible career, and to be financially independent—it is not surprising that small companies are mushrooming.
However, most small businesses fail. The US Bureau of Labor Statistics reveals that 20% of small businesses fail within the first two years, and 45% within the first five years. Furthermore, 65% of startups fail within the first ten years and only 25% survive for more than 15 years. Although ditching your day job to become an entrepreneur can be a risky venture, following all of the necessary steps when opening your business can set the basis for success.
Here are the steps that a business owner can use to launch a business successfully.
1. Make a Realistic Plan
It is possible that you already have a business idea. What is the possibility that your idea will succeed? For a small business to succeed, whether it is a jewelry, liquidation, or women’s blouse store, it should fulfill a need, solve a problem, or provide a product the market requires. The exploration of the market should enable you to answer questions such as:
- Who needs your products?
- Do people need your projected products?
- What is the nature of the competition?
- Who is the other seller offering a related product in your location?
2. Structure Your Business Model
A business plan is an outline that directs your business from the launching phase to, eventually, business growth phase. You might need an ordinary business plan if you plan to seek financial assistance from a bank or an investor. Such a business plan is usually lengthy and has some crucial sections that banks and investors search for when endorsing your business idea. If you don’t intend to seek loans from outsiders, a simple single-page plan can guide you through implementing your strategies.
3. Gather Your Finances
You don’t need millions of dollars to launch a small business. However, you need some money to cover initial investments such as:
- Equipment
- Permits and licenses
- Inventory
- Insurance
- Grand opening events
- Legal fees
- Branding
- Market research
- Property leases
- Trademarking
You might also need finances to sustain at least 12 months of expenses such as production, employees’ salaries, rent, supplies, utilities, travel expenses, marketing, and advertising. Cheaper ways of doing business and acquiring finances include:
- Small business loans
- Financing
- Credit purchase
- Small business grants
- Liquidation sale
- Crowdfunding
- Hire purchase
- Angel investors
Note that direct liquidation is an excellent way of boosting your working capital and current business assets. It is a market place where a large retail liquidator like Amazon and Walmart auctions overstocks after new arrivals, buyer returns, surplus inventory, and refurbished goods at great deals and offers. Small businesses can save money with liquidation auctions by identifying and buying merchandise from online auction sites with the best discounts and prices.
4. Go Step-by-Step
You can launch proprietorship, a partnership, a corporation, or a limited liability company (LLC). The structure you choose will influence many factors, such as methods of filling taxes, business name, and liability. You can start with a sole proprietorship then transform into other structures as your business grows.
5. Select Your Accounting System
An excellent accounting system is essential for creating and managing your financial plan, pricing, closing deals with other businesses, and filing your taxes. You can either hire an accountant or set up an accounting system yourself if you have some necessary accounting skills.
6. Embrace Digital Marketing
Even if you’re launching a general local business or a specialized business, selling different women’s blouses or different designs of a white blouse, you require a strong online presence. Although you may get some clients via networking and word of mouth, a strong digital presence is still invaluable. The Washington Post reveals that at least 55% of online buyers in America learn about what they buy on social media. Furthermore, Statista reports that a buyer in the US allocates approximately 40% of their budget to online buying.
Never stop trying and learning new things. A money-spinning business venture now might not necessarily be lucrative five years from now. Be ready to try new technologies or better marketing tools and business sales strategies. Consider questions such as: are clients enquiring about products you aren’t offering? Are there different groups of buyers you ought to target? Find answers by listening to your customers, studying consumer behavior, and reading different materials about your industry.
