By Paige Connor Totaro
Everyone who is starting a small business wants a checklist to use to ensure success, and there are lots of checklists out there to use. When entrepreneurs who’ve made it share their startup stories, it seems like an effortless journey. It’s not. It takes lots of time, money, and dedication to make it work.
In reality, every business–and every founder–is different and what works for one small business might not work for another. Still, there are a few steps that nearly all successful entrepreneurs take:
Do you have to? No, but it’s a really good idea. This is where you explain to yourself, to the world, and, more importantly, your investors or lenders, why your business is going to succeed. A business plan should not only include your plan for building your business, but also a competitive market analysis looking at companies already in the space and how yours will differentiate itself.
Spending some time thinking about the values and mission of the company can also give you clarity of purpose going forward. The Small Business Administration is a great resource for learning what to include in your business plan as well as other vital information on how to start a business.
This is part of every business plan, but it’s so important it deserves its own bullet point. And it also requires two subheadings.
Do you know how much it will cost to start your business? Research how much it costs to form a business in your state, and what it costs to get a business license in your city or county. You might need a lawyer to help you navigate the rules and regulations your business will need to navigate. And you will need to pay that lawyer. Will you need a trademark for your brand? Will you need a logo designed? Business cards? Will you have a launch party?
You have to understand how your business is going to work financially once it launches. It’s not enough to be selling, you have to be selling at a profit large enough to support the ongoing operation of the company. Doing advance planning in this area will help you avoid surprises along the way.
Even if you can do it alone, it’s a good idea to have people you trust that you can go to for advice, bounce ideas off of, and call in a panic when your shipment is stuck in customs. Some of these will be paid professionals, like lawyers, accountants, bookkeepers, small business advisors, HR professionals, insurance brokers, and contractors. Some will be trusted friends and mentors who don’t require payment (but deserve a generous gift when you can afford to give one). But remember that if they are not being paid to work for you, they might not be as available as you need them to be
You’re really not going to do this alone. Even if your business is you providing a unique professional service, you will likely need support staff to help you with administration so that you can focus on the money-making billable work you’ll be doing.
Hiring support staff is a tricky business, and can sometimes take a few tries before you find the perfect person for a particular job. If you’re bringing on full-time employees, you’ll also need a plan for benefits and employee policies as well as payroll management to make sure your withholding the proper taxes.
Once you open your doors for business, the fun begins. As does the stress. Keeping things moving and profitable is often a challenge. Starting a business can be rewarding in many ways, but it can also be mentally exhausting.
It’s common for expenses to outpace revenue in the early days of a small business. Have a plan to manage those periods, whether it’s via small business loans or investments from partners. Keeping a close eye on expenses and budgeting carefully can also minimize cash flow issues.
One thing that trips up many entrepreneurs is change. Once you’ve spent so much time on your business plan and your budget, it’s hard to change gears. But sometimes, you need to do it to reflect a change in expected outcomes.
Let’s say you’ve built your business around selling flowers by the stem, but you find that everyone wants to buy them by the bunch. Are you going to keep pushing them to buy one at a time? You’d better not! You’ll want to redo your financial plan to reflect that new reality that was different from your plan.
Or maybe you’re offering your coaching services by the hour, but you find your customers really prefer a set flat rate. You’re going to change that business plan, and your budget, to adjust to the reality you’ve found.
You’d be surprised how many people forget this. Whenever you make a profit, you need to give a share of that profit to Uncle Sam, to help pay for roads and bridges and defense of our country. It’s a little bit painful but imagine how painful it would be if we didn’t have a strong infrastructure to get your shipments across the country! Or–how painful it will be at tax time, when you have to pay a year’s worth of taxes that you haven’t been setting aside.
You can use an accounting software program to help you with tax planning, but the more your business grows, the more complicated your taxes will be. So having a professional accountant, tax planner, or small business advisor on your side from the beginning will save you having to go back and amend returns later.
You might be good at a lot of things, but that doesn’t mean that you should do them all. But that is precisely what trips up a lot of entrepreneurs. They are afraid to let go of the controls to let someone else take the lead. But a small business advisor can help you figure out what jobs you should keep doing yourself, and which you should outsource.
If you’re not experienced in web design, for example, it may make sense to hire someone else to build it. You’ll also likely want to invest in business management software, so that you don’t have to manually track orders and invoices.
In a small business, even with all the professionals and staff and mentors lined up, often the founder is key to its success. That means you. Taking care of your business means taking care of you. Make sure to pay attention to your physical and mental health along the way, because without you, and your vision, the business may fail to thrive.
It is not an easy task, building a new business from the ground up. But with the right team in place, and with proper planning, you can see growth almost from day one. And there’s nothing like the satisfaction of seeing your vision come to life.
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