Building a Business Foundation
Sometimes working for the man just isn't the right fit, which leads tons of people to follow their dreams and open their own business. The joy of being your own boss paired with the pride of ownership can make becoming a business owner seem like a sparkly utopia. It's not all fun and games, though. A lot of work goes into creating a profitable business from the ground up, much of it before you've even found four walls to call home. If you take your time in the planning phases of the process, your idea is sure to take root and soar.
Know Your Market
Before you think about securing loans and signing leases, you want to make sure you're familiar with your desired market. Start looking at other businesses similar to your idea in the area: How many are there? How many employees do they have? What are their busiest hours? What are their main price points? You can also keep an eye out for what these places don't have, and find a way to incorporate it into your business model to get an edge on the competition. If there are a few other businesses in your field thriving in the community, then you can usually interpret that as a safe bet for some success.
Create a Plan
Every business needs a business plan, both for your sake and the bank's. This document or chart should be a blueprint for your business from day one until you reach your goal. Include things such as where you hope to open, what your hours will be, how many employees you'll need, your featured products, and how much financial overhead will be required. From there you can plot out your first month sales goals, how you might expand in the future, and how others can collaborate with your store. These details will show investors and potential customers that you've thought through your idea and are ready to hit the ground running with lots of potential.
Consider the Money
Going solo might be fun, but it's not always easy. Now that you have all of your potential costs laid out in the business plan, it's time to take stock of affordability. Few people can afford to fully fund their business's startup costs out of pocket, so you should consider how much weight you're willing to carry on your own and how much you might want to defer to a loan. After you're set up, you'll need to determine how much you need each month to not close shop. The simplest way to find this number is to figure out how much revenue you'll have to generate to break even each month with your overhead costs. This helps you establish sales goals, as well as assess if you have the resources to keep your business open during slower sales seasons.
Find Your Structure
There are tons of different options for how to legally set up your business depending on size, revenue, and function. Most small businesses set themselves up as limited liability companies, LLCs, but there are plenty of other options that might better fit your model. How you categorize your business will determine things such as how much you pay in taxes and how much personal liability you take on. Each business type also has its own fees and rules, such as licensing and registration. Be sure to check with both your local and state governments to ensure you comply with all business laws and have proper documentation prior to opening. Because this can be a complex decision to make, if the answer doesn't seem cut and dry, you can always get the help of a business advisor or lawyer. You may also want to think about how you can help your employees and the people that work for you. How are you going to offer them rewards? What structure are you going to do? Will there be benefits? Are you going to hire veterans and offer them VA Home Loans for being service members? They are many things to consider when you think about a structure and how you want it to be set up.
Starting a business might seem daunting, but if you take it one step at a time it's completely possible! Just remember these simple steps when you get started, and you'll be cutting the ribbon to your new life in no time.