Once you’ve narrowed down your list of small business ideas to two or three, get out your pencil and paper and prepare to start some serious thinking and analysis. This step is where the planning process begins and helps you understand the feasibility of your business ideas. You need to ask the following questions, do the analysis, and come up with your best answers. Questions you should ask yourself about your business ideas include:
How much will it cost to just get the business off the ground? Do I have this money or do I need a loan? Do I need financial help to start my own business?
How long until I break even? How much cash to I need on hand to keep the business afloat?
How will I cover family (or your own if you’re single) living expenses during the startup phase?
What county, state, and federal licenses, certifications, etc. do I need for the business? How long does it take for each?
Who are my customers? Is there a market for my business?
If your business sells a product, how much inventory do you need on hand?
Do you need to hire employees or temporary staff? How much help do you need?
Do I love this business? Does it fit my lifestyle, professional goals and personal ambitions?
After answering the questions above for each of your business ideas, you should be able to pick the business idea that makes the most sense for you (and has the highest probability of success). While a lot of work, the next steps for how to start a small business are somewhat academic…
Prepare a business and marketing plan
Obtain necessary funding, if necessary
Establish your business entity and register with your county, state and federal agencies
Open a business checking account and business credit card
Obtain necessary licenses, certifications, insurance, etc.
Acquire office or storefront space, if necessary
Purchase inventory, if necessary
Start advertising
Open your business!
Closely manage and analyze your books; pay careful attention to your cash flow
Revise your business and marketing plan
Work hard, succeed, and hopefully make a ton of money
Make a difference in your community
Sure, these are overly simplified, but you get the picture. The two hardest tasks, in our mind, when learning how to start a small business, is 1) Coming up with start up business ideas that you are passionate about, and 2) Doing the due-diligence to try and ensure that your business will be a success.
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