So you have the next million dollar idea! You are finally ready
to kick your day job to the curb and start your own small business.
You are ready to be your own boss, or so you think. Do you even
know where to start? Did you know that 33% of businesses fail
in the first two years and after four years only 45% are still in
business? The primary reason that most of these businesses fail is
due to poor planning and execution of their business plan. Business
Plan? Wait, what's that?
So where do you start? You have the idea and it is going to make
you rich. Do you love doing it? This is also a place where
people go wrong. If you want to start a small business, make sure
it's something you enjoy doing. So let's talk about the steps you
should take when starting a small business.
Write a Business Plan
You are probably wondering what a business plan is. A Business
Plan is a formal statement of a set of business goals, reasons they
are attainable and how your business will attain them. A Business
Plan is a little more lengthy and entailed than that, but there are
tons of resources on the web to assist you in writing a Business
Choose a Location
Are you starting the business in your home? Do you need a
building? - You have heard it a million times, "Location, Location,
Location!" Another reason that many businesses fail is due to
location. This should definitely be something that you put time
into choosing. Yes, you may be able to find cheaper real estate
somewhere else, but why is it cheaper? Have 10 other businesses
tried this location in the past five years? Why haven't they
succeeded? What will change the location, just because it's
Finance your Business
How are you going to start your business? Are you going to
self-finance your business? Do you have working capital, money to
carry the business and yourself through the first 18-24 months?
Many people believe that they can make the business run with their
funds but often forget about having to pay themselves.
Are you going to borrow the funds to start your own business? Do
you need to borrow funds to purchase the new location? Many banks
work with the U.S. Small Business Administration (SBA) to help
small business owners get started. Contact your local bank to see
if they participate in SBA programs.
Choose a Legal Structure for your Business
Are you going to setup a Limited Liability Company (LLC) or just
act as a Sole Proprietor? These are questions that you should ask
an attorney. You should also register the name with your Secretary
Register for State and Local Taxes
Death and taxes are the only two things that are certain in this
life. As a small business owner, you need to register to pay and
collect both state and local taxes. These are two important things
that you do not want to get behind on doing.
Are you going to run the business alone? Is this really a one
man or woman show? Do you need help to grow your business? These
are all questions you have to ask yourself. You also have to
understand that with employees come other responsibilities. You
have to understand all of the laws that go along with hiring
employees. You must understand taxes and benefits (should you
choose to offer both).
So starting a new business is not as easy as putting an open
sign in the window. You need to be prepared and ready before you
even open the doors. But with a little time and determination, you
might just have the next million dollar idea. There are lots of
great resources out there for people looking to start a small
business. One great resource is your local community bank. At
American Gateway Bank, we have Small Business Bankers that are
experienced and willing to help you get your business off the
ground and running. Feel free to visit our Business Banking Page or any of
our convenient 10 branches.