Business is booming. But, if you’re ready to become one of the millions of business owners in the United States, go in with a plan and know the wealth of resources at your fingertips.
1. Lay the foundation
The Small Business Administration’s Office of Entrepreneurial Development aims to help more people have the opportunity to live the American dream. That dream often begins with the basics of deciding the best legal structure to operate your business; ensuring you have the right licenses and permits at local, state, and federal levels; and making sure that you have adequate amounts and types of insurance (and possibly bonding) to protect you and your venture from liability.
Once you have decided the legal structure of your business, it’s time to move on to your business plan.
2. Build a business model
Business plans come in all shapes and sizes, but one thing is clear: Business owners who methodically plan — and plan in a way that they are able to change course quickly if things don’t go well — are much more likely to succeed. A tried and true comprehensive business plan, which takes you through the process of conducting market research, analyzing competitors, developing financial projections, etc., is the path most traveled for business owners.
Alternatively, a new approach used by many tech-based businesses (one that is spreading to Main Street ventures) is the use of a business model canvas, which is a tool that provokes the entrepreneur to produce a minimally viable product rooted in insight developed from talking to potential customers. No matter which business plan you go with, always remember that planning makes kings.
3. Determine viability
One of your biggest hurdles in the early stages of your business, especially during the first year, is to validate that you have a viable business model. A key tool to determine viability is a break-even analysis, which is available on the Small Business Administration’s website.
Additionally, you can find help walking through the analysis at one of several community resource centers around the country, such as SCORE, a network of volunteer mentors who provide expert assistance; the Small Business Development Center (SBDC), offices usually run by universities or community colleges that offer free business counseling and training; or the Women’s Business Center (WBC), a center that offers services designed for the unique obstacles faced by women entrepreneurs. Do a break-even analysis as early as possible and update it regularly in your first year of operation.
4. Calculate capital needs
Additionally, startups often fail to understand their full capital needs. This can result in the entrepreneur running up personal debt as opposed to business debt. There are a variety of financing options available, so the entrepreneur should understand the various funding options available before running up personal debt.
SCORE, SBDCs, and WBCs offer free advice to help entrepreneurs make well-informed decisions on financing their businesses.
5. Revisit your roadmap
Business ownership is a journey, and the first year of operating a venture is full of challenges, roadblocks, and the potential need to change course. Regularly visiting your roadmap in the first year and making key course corrections based on how the business is doing is of utmost importance.
One of one of the goals of the Small Business Administration (SBA) is to ensure that small business owners are aware of the counseling and training resources, and other technical assistance provided for free or a low cost to business owners. SBA’s hope is that more people will have the confidence, skills, and resources they need to succeed as small business owners, and we can continue to revitalize a spirit of entrepreneurship in our country.
