According to the 2018 US Small Business Profile issued by the Small Business Administration (SBA), there are approximately 30.2 million small businesses in the United States employing 58.9 million employees.
Businesses begin an as idea, and while many people have good ideas… not everyone has the characteristics to help them succeed in their venture. Fifty-percent of small businesses fail within the first five years, according to the Bureau of Labor Statistics. These include characteristics such as education or work experience in their chosen industry, strong work ethic, effective time management skills, willingness to ask for help and advice from others, self-motivated, responsible, resourceful, persistent, decisive, and most importantly good health (since health = wealth).
Assuming that at a minimum you have these, as well as start-up costs, what options do you have as far as starting your own business? You can choose to start a business based on your own idea; getting to decide your own company name, logo, business direction. You can purchase an existing business, a franchise, start a non-profit organization, an e-Commerce store. You decide, but know that especially in the beginning you’ll be wearing many hats, from that of administration, accounting, HR, marketing, sales, customer service, to IT, and possibly more.
When starting your own small business, educate yourself of the following:
- Legal business structure — will the business be established as a sole proprietorship, a partnership, a C corporation, an S corporation, or a Limited Liability Company?
- Rules and regulations regarding your industry.
- Purchasing business insurance — consult an insurance broker to determine what insurance you may need.
Let’s assume that you’ve decided to start your business. You should define a market need, examine your personal background for suitability, research your industry, consider your target market as well as your competition. From there, you’ll need a business plan, a mission statement, as well as your unique selling proposition (USP).
Your business plan doesn’t have to be extravagant since it should grow as your business does and should include the following sections:
- The executive summary should include a brief description of the business, whether you’ll seek a loan or investors, how much money you’ll need.
- The business overview should describe your business, its products or services, an assessment of the competition, how you will utilize funds. Ask yourself how much you should sell at what price to how many customers over a period of time.
- Ideally, your financial forecast should include projected income and expenses, sources and uses of funds (cash flow), as well as a break even calculation.
Your mission statement is your reason for being in business and helps you position your company. Take the time to identify yours. Feel free to refer to “Establishing Values for Your Small Business (Complimentary Assessment)“ for additional information.
Unique Selling Proposition
Along with creating your business plan, determining your mission statement, it’s advisable to identify your unique selling proposition. What makes your company, product or service different from every other company’s product or service?
To increase the likelyhood that your small business isn’t part of the 50% that fail within the first 5 years, who will be a part of your team?
- Who’s your business mentor?
- Who’s your accountant?
- Who’s your insurance agent?
- Who’s your lawyer?
- Who’s your banker?
With these questions, I leave you to ponder this week. Until next time.
Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.
If you enjoyed this post, feel free to also read “9 Steps to Starting a Business in the State of Florida”, “10 South Florida Incubators that Support Small Businesses & Startups“, and “13 Essential Digital Marketing Resources for Small Business Owners“. You can also contact me for a complimentary consult.