Establishing a business requires meticulous planning, making financially wise choices, as well as finalizing a sequence of legal activities. According to the Small Business Advocate survey, “about two-thirds of business survive 2 years in business, half of all businesses will survive 5 years, and one-third will survive 10 [years]”
This post explores the first 5 crucial steps to implement when starting a business so that your business can survive and thrive! And stay tuned for next month where we will cover the remaining 5 critical steps for small business success!
Conduct market research – Market research integrates consumer behavior and economic trends when validating a business idea. This step enables you to reduce risks prior to the establishment of your new venture. Therefore, it is imperative to identify and understand your target market from the very beginning. When conducting market research, it is necessary to collect demographic information (i.e. population data on age, wealth, family, interests, or anything else that could be relevant) in order to better articulate opportunities and limitations for acquiring customers.
Develop a business plan – A strong business plan leads you through the complex stages of starting and managing a business. In other words, your business plan should serve as your roadmap as how to structure, manage, and grow your business. Additionally, a robust business plans can facilitate in attracting financing or new business partners.
It’s important to note that there’s no correct or incorrect way to prepare a business plan. However, it is crucial that your plan meets your business’ needs.
Finance your business – It costs money to start a business – no matter the size. Therefore, it comes as no surprise that financing your business is one of the first and most important financial decisions that business owners need to address. New business owners should first identify how much funding does their businesses’ necessitate, and then how will they acquire these funds (i.e. will it by via investors, loans or self-funding?). With that said, loans aren’t always easy to obtain as 27% of businesses surveyed by the NSBA claimed that they weren’t able to receive the funding they needed. How you choose to finance your business has major impactions as to the structure and management of your business so choose wisely. Companies like Imperial Advance, among a variety of small business working capital solutions, we offer business term loans, revenue-based financing, lines of credit and merchant cash advance options to our clients. The business term loan, for example, allows a business owner to leverage up to 250% of their monthly revenue.
Select your business location – Your business location dictates the taxes, zoning laws, and regulations that your business will be accountable for. When selecting your business location, remember to keep in mind that costs (minimum wage laws, property values, rental rates, business insurance rates, utilities, and government licenses and fees) vary. Consequently, you’ll need to assess which state, city, and neighborhood would be most beneficial for your business in terms of costs.
Choose your business name – Your company name should be creative, unique and aligned with your brand image. Once you’ve selected a name, it is recommended to protect it by registering via the legal entities like: entity name (protects you at state level), trademark (protects you at a federal level), Doing Business As (doesn’t give legal protection but can be legally required) and domain name (protects your business website address).