It seems like every time you turn on the television, there is a new program that consists of investors helping out small business owners. There is a reason for this: there are more and more small businesses springing up every day and people are gravitating to programs that explore this. Additionally, with the rise of social marketing, crowdfunding, and free fundraising opportunities, many entrepreneurs — just like you — realize there is help available to bring their ideas to fruition.
First Things First: Is There A Market For Your Idea?
Although, your idea can be a very good one; one of the first questions you must ask yourself is if there is a market for the product/service. It can be a fashion accessory or an around-the-house appliance. You will need to conduct a bit of research to understand the numbers and the demographic. After that, comes an assessment of the competition.
For example, just because you have a great idea for a flavored soft-drink, does not mean this will translate to an actually business. The competition is fierce and the barriers to entry are very high. Of course, depending on your situation and research, this hardly means you cannot give it a shot.
Business Plan Basics
Next up is your business model or plan of implementation. In this you take into account the most viable road to success, and map out how you plan to get there. In addition to clarifying your objectives, a business plan is instrumental in convincing any future investors to take a serious look at your business idea. After all, if you do not have one, then you are proposing to them that they work for you in creating a hasty once, in order to assess the viability. Clearly, that is not a very attractive proposition!
The components of a business plan include a mission statement, both a company and executive summary, information on the product/service, the market you are targeting, how much your operation will cost, and how much you expect it to make eventually. There are some great online resources to help with the business plan.
Finding Investors And Capital
Many current small-business owners saved up for a few hard years and then went into business for themselves. Although, this is still a very good approach, these days, you have plenty of help available to expedite the process.
To get some capital, you can use crowdfunding through your social media networks or approach a company such as Plumfund for help with free fundraising. There are also peer lenders and low-interest rate credit cards designed specifically for small businesses. Of course, with fundraising, there are no continuing interest rates to worry about, which is why it is such a popular approach.
Legal Considerations And Taxes
There is also the matter of incorporating your business, once you figure out what you want it to be. Understand the differences between sole proprietorships, LLCs, etc; these will matter when tax times arrives; whether your obligations fall under personal income, excise taxes, self-employment, or the more traditional employee-related tax structure. SBA.gov is a comprehensive resource for all of these.
If you do employ people, then it is imperative that you get insurance to cover business-related accidents. In fact, even if you are running a work from home business, you need to make sure that your homeowners insurance takes into account theft of business materials (at the very least).
Starting and running a business is a difficult, but exciting endeavor. Your chances of success are greatly enhanced if you have all your chips in order — so good luck with this awesome start!
Wendy is a super-connector with OutreachMama and Youth Noise NJ, who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition. You can contact her on Twitter.