So, you’ve decided to go out on your own and start a business. You’re not alone—according to the Small Business Administration, small businesses make up 99.7 percent of all companies in the United States. Before you begin pursuing your passion, here are the first three steps you should take.
Research. You may have a great idea, but there might be little public demand for it. You also need to explore the competition you will face from other companies that offer similar products or services. Conducting a market assessment is important.
Assess. Creating your own business can be incredibly rewarding, but it is also a lot of work. Do you have the necessary resources? Create a spreadsheet with estimated startup costs, including licenses, equipment, insurance, stock and inventory, building leases, and so on, as well as the operating costs for the first 12 months. How much can you afford to spend, and will it be enough? If not, will you be able to secure financing or investors? Your time and motivation are other resources to consider. Can you take time off from your current job? Starting a business can involve a lot of ups and downs, so be sure you are positioned to weather the stress, financially and emotionally.
Plan. After you’ve assessed your resources and believe your business has a place in the market, it’s time to plan. If you aren’t seeking financing, you can create a simple plan that helps you focus on your short- and long-term goals. If you are seeking financing or investors, you will need to create a more detailed, traditional business plan. Your plan should include the basic structure of your business (LLC, corporation, sole proprietorship, etc.) as well as how many employees you will need to get started.
With a plan in place, the real work begins—getting licenses and permits, selecting an operating location, purchasing equipment, inventory, and technology, and promoting your products and services. Soon, you will be among the more than 28 million small businesses in the United States and, with the right preparation, you can be a successful one!