Practical tips for starting a small business
Starting a small business is a uniquely challenging, exciting and rewarding experience. From researching potential industries and operational models, to digging deep into financing options, a lot must happen before you officially open. For those who persevere, launching your own business can provide a major sense of accomplishment and purpose.
An early step in creating your own company is understanding the resources available to you and the current state of small businesses in the U.S. With a strong understanding of the assistance, tools and information developed for and offered to small businesses, you have more opportunities to build your business with a solid foundation.
Take advantage of help and guidance: Governmental and state-based assistance
Whether you’ve just started the process of opening your business or have been in operation for some time, the SBA offers an incredibly wide range of help. From forms that aid you in planning your initial company structure, to providing small business loans with competitive interest rates, the SBA exists for the express purpose of assisting America’s small business owners. The SBA also offers specialized programs, like disaster recovery assistance. Because so many different resources are available, the best way to get started is to visit the SBA website and look for the tools that are the most useful and relevant to you.
The Small Business Development Center (SBDC), a program partially funded by the SBA and supported by local universities and state economic development agencies, has offices across all 50 states and in many U.S. territories. These centers are focused on consulting and training. Small business owners can schedule in-person meetings with SBDC specialists who can help them identify opportunities and mitigate operational risks. In many cases, an SBDC office can supplement assistance offered by the SBA.
Individual state programs are also worth looking into, whether recommended by the SBDC or found via online searching. While they vary in terms of name, location, accessibility, qualifications for use and offerings, they may still be able to assist you as you build and grow your small business. You may find a program or form of support that pairs well with your operations.
Understanding business financing
As you begin defining and creating your small business, you need to find a trustworthy and experienced financial institution to be your partner. A reliable bank relationship is critical so you can securely deposit, store, access and transfer funds to launch and operate your company.
It’s important to consider the potential need for a loan to help start or stabilize your small business. This can be a more manageable process when you have a dependable banking partner that understands your business. Planning around early expenses like payroll, equipment, inventory, real estate and similar costs becomes easier through the judicious use of a small business loan.
With startup costs (accounts payable) at their highest and revenue (accounts receivable) just starting to trickle in, even companies with the strongest business plans need some financial assistance. A business loan, used responsibly, can help a new organization keep its doors open as it works to establish its initial book of business.
Hire and delegate
One important consideration for business owners is deciding where to focus your efforts in day-to-day operations and determining which areas require additional support. Often, small business owners become jacks of all trades, especially during the beginning phases when your reviews, approvals and decisions are required at every turn. However, a more efficient approach to using staff and resources is to delegate and allow employees to manage tasks with more autonomy.
Whether it’s having an employee focus on customers while you handle tasks in the office, or finding a part-time accountant to handle bookkeeping, there are many cost-effective ways to support your business without working you to exhaustion. As you start planning the details of your day-to-day and long-term operations, identify the areas where you’ll likely need assistance and find ways to incorporate them into your budget.
Develop a five-year plan
A small business requires a lot of effort to get off the ground and into regular operation. There’s no doubt you need to dedicate time and effort toward the start-up process, which may involve more tasks and tactics than strategy. However, you also need to consider the future of your company with a strong, well-rounded plan that stretches years into the future.
Developing a five-year plan for your business allows you to work toward specific goals and have a long-term course of action in mind. The five-year plan is crucial if you plan to work with investors and lenders because they will want to see the specific strategies you will use to reach goals and become profitable over time. Your five- year plan should include:
- An executive summary outlining your skills, experience, business goals and plans for achieving them. You should emphasize factors that positively influence your business.
- A description of what your business will do, whether it’s providing a service or selling products. You need to describe why a demand for those products or services exists, and will continue to exist in the future.
- Estimated financial details, such as income statements and estimates of cash flow. You should be as specific as possible.
- Relevant details about the business leadership, including you and your team’s abilities, as well as any plans to outsource or support areas of operation.
Building a business from the ground up
Starting a small business is an involved, intensive process. It can also be extremely rewarding when the pieces come together and you launch your business.
Our small business specialists are ready to help you with your small business financial needs through guidance, support and service. We also offer a series of online tutorials to help your business succeed. We’re always adding new topics that we believe can help you build and manage your business. Explore our small business courses.
This content is for informational purposes only and is not for the purpose of providing legal or financial advice. You should consult your financial and legal services provider for more information.