It takes a huge effort to get a new small business off the ground – and it take an even bigger one to keep it going.
As a new small business owner, one thing is guaranteed – you’ll have more daily tasks than any one person can complete in a day. As a result, prioritization is key. We’ve compiled this list to help you focus on the core steps you can take to ensure your success.
1. You Need a Business Plan
The failure rate of new small business is soberingly high, with 60 percent closing their doors inside three years. If you want to avoid being a statistic, you need to write a business plan. The core of this plan should answer the following questions:
- What Will You Sell? Why is it Appealing to Your Customers?
- How Do You Intend to Acquire Those Customers?
- Where Will You Source Your Products? And At What Cost?
- What Key Metrics Will You Track to Judge Success?
Every business is different but these four questions will form the basis of any successful business plan.
2) You Need The Right Location
It’s almost impossible to overstate the importance of the right location for your small business. The wrong space will hobble your business before you’ve even gotten started, so it’s important to thoroughly research your options.
Choosing the right location isn’t just about understanding the obvious factors, such as foot traffic and parking. It’s about gaining a deeper insight about your target customers’ habits and behaviors. The right location will blend seamlessly into their lives and daily/weekly routines.
3) You Need Money – You Need Lots of Money
One of the main reasons businesses fail is a lack of working capital. Everyone’s heard the expression, ‘It takes money to earn money’. Well, broadly speaking, that’s true. You’ll need capital for your commercial lease, for staff, for inventory, and for equipment (among many other expenses). These costs will keep coming, so make sure you have considered your capital needs, and created a detail cash-flow statement for at least the next six months (but preferably the next two years).
In this post-recession world, banks are tighter than ever with their loans criteria, so you’ll want to consider alternatives to the bank-loan, including giving up an equity stake in your business and bringing on a partner.
4) You Need the Law on Your Side
The first months of running a business can pass incredibly quickly, with a huge range of responsibilities. As such, it’s very easy to allow things like officially registering your business name or choosing an official legal structure to fall by the wayside. Unfortunately, a failure to apply for the appropriate paperwork can have long-term repercussions, so you’ll want to get this stuff right from the outset.
The right corporate structure can minimize your financial risk and legal liability in the event things take a wrong turn. Don’t ignore this part of your business.
5) The Tax Stuff
They say that nothing in life is certain except death and taxes. Now that Google has set it’s mind to achieving eternal life, I hold some hope out for changing the former but the latter is just not going to go away anytime soon.
Get a Tax Identification Number (TIN), register for State and Local Taxes, and get yourself a good accountant who knows how to optimize your situation as a small business owner.