Starting your own business is easy if you know the steps involved in this undertaking. But before you begin, note that running a business is laden with difficulties and challenges that not all may be able to overcome successfully. Starting one’s own business is one thing and running the business is another. This means that even if you find it easy to set up your startup, this does not mean that it would also be easy to keep your business running.
Despite the many obstacles, though, you can still lead your business to success if you are strong enough to face the hurdles and if you know just the right things to do in difficult situations.
Excited to know the fundamentals of setting up a small business? Read on.
Step 1: Know What Kind of Business You Want Set Up
Before you do anything else, ask yourself first what kind of business you want to manage. Do you want to run a service-based business or a product-based business? A service-based business means you will have to rely on your abilities to be able to give your customers what they need. In this type of business, what you will be offering should be a skill that you are really good at doing.
For instance, if you have technical knowledge on how to repair computers, then you can probably set up a computer repair business. If your passion is baking and you know how to bake, then selling baked goods will do well for you.
A product-based business, on the other hand, will require you to sell goods or whatever product you want to offer to your customers. As opposed to a service-based business where you do not need to stock inventories, a product-based business may require you to have a storage area or space where you can display or store the products that you are going to sell.
Additionally, take time to decide what time of business structure you want for your business. Do you want it to be a sole proprietorship, partnership, LLC, or corporation? All these types have their own pros and cons, so you need to think carefully before you come up with a decision.
Step 2: Conduct Market Research
Conducting research regarding the viability of your business idea is a crucial step in setting up a small business. Research allows you to know whether the type of business you intend to put up in a certain area will have a customer base that will be enough to cover its operational overheads and other things. With research, you will be able to know if you indeed have a market for your business idea. It also allows you to get more insights into what your target customers are looking for and how else you can help them with the business you are trying to set up.
Step 3: Know How Much You Can Afford to Spend
To be able to set up a new business, you need capital. Your capital should cover expenses, such as business permits, space rentals, initial employee salaries, overheads, and many more. If you plan to do business online, you may only need minimal capital. But if you need a warehouse or a physical store, you can expect your operating expenses to go up.
If you feel like your funds are not enough to pay the lease for a commercial space or if you are planning to buy a commercial property but lack the funds, you can seek the help of financial institutions who may be willing to lend you some funds for your venture. A little research on the Internet can help you find the best mortgage loan rates that will work best for you and your credit score.
Step 4: Write Your Business Plan
A business plan can help you see the loopholes and the advantages that are in your concept. It helps you focus on your strategies and helps you see what kind of funding you need. It also helps you see your business from a new perspective. With this, you will be able to keep track of the feasibility of your ideas and integrate ways that are likely going to help drive your business to success.
Step 5: Register Your Business
A business permit is required before you can legally operate your business. Depending on the area where you will set up your business, you may be required to procure a variety of business licenses before you are allowed to operate. Basically, you will need to register with the federal, local, and state governments.
You also need to prepare several documents before you can register. These documents are a requirement for business registration. To know the full requirements for setting up a business, you may ask your local authorities.
Once all business permits have been obtained, you can then set up your office or store and start selling. Know that there may be risks. It may take some time before you will reap the return of your investments. With patience and perseverance, though, you might just be able to reach the road to success.