How to Start a Small Business in 2020
Starting a small business is a big undertaking. But with careful planning and execution, it can be a very rewarding experience. If you're thinking of starting a small business in 2020, here are a few things you should keep in mind.
Next, you'll need to finance your small business. This can involve identifying your funding needs, securing debt financing, and raising equity financing. Once you have the necessary funding in place, you can register your business. This includes choosing your business structure and registering your business name. Finally, you'll need to build your team by hiring employees and independent contractors and building an advisory board.
If you follow these steps carefully, you'll be well on your way to starting a successful small business in 2020!
Defining Your Business Idea.
The first step in starting a small business is to brainstorm potential business ideas. To do this, you can use a variety of methods, including mind mapping, listing, and freewriting.
When brainstorming potential business ideas, it's important to consider your strengths and weaknesses, as well as your interests and passions. For example, if you're passionate about fashion, you could start a clothing line; if you're good at cooking, you could start a catering company. Once you've brainstormed a list of potential business ideas, it's time to conduct market research to see if there's a demand for your product or service.
Conducting Market Research.
Conducting market research is an important step in starting a small business. This will help you determine whether there's a demand for your product or service, as well as who your target market is. To conduct market research, you can use a variety of methods, including surveys, interviews, and focus groups.
Once you've conducted your market research and determined that there is indeed a demand for your product or service, it's time to assess the feasibility of your business idea.
Assessing the Feasibility of Your Business Idea.
There are several factors you need to consider when assessing the feasibility of your business idea:
-Can you realistically generate enough revenue to make your business profitable?
-Do you have the necessary skills and experience to run your own business?
-Are there any regulatory hurdles you need to clear before starting your business?
-Is there enough interest in your product or service to sustain long-term growth?
If after assessing the feasibility of your business idea you decide that it is indeed feasible, then it's time to start developing your business plan!
Developing Your Business Plan.
The first step in developing your business plan is to define your business goals and objectives. These will serve as the foundation for the rest of your business plan, so it's important that you take the time to carefully consider what you want your business to achieve.
Some questions to ask yourself when defining your business goals and objectives include:
-What products or services do my business offer?
-Who is my target market?
-What are my long-term goals for my business?
-What are my short-term goals for my business?
-How will I measure the success of my business?
Outlining Your Business Strategy.
Once you have defined your goals and objectives, you can begin outlining your business strategy. This should include an overview of how you plan on achieving your goals, as well as a detailed marketing plan and sales strategy. You should also include information on your target market, pricing strategy, and any competitive advantages that you may have.
Structuring Your Business.
The next step in developing your business plan is to decide on the structure of your business. This includes choosing the legal structure of your business, as well as deciding on its name, registered address, and contact information. You will also need to obtain any necessary licenses and permits before you can begin operating.
Creating Your Marketing Plan.
After you have chosen the structure of your business, you can start working on your marketing plan. This should include a detailed analysis of your target market, as well as a description of your marketing strategies and tactics. You should also include a timeline for implementing your marketing activities, as well as a budget for each activity.
Financing Your Small Business.
Before you can start searching for financing, you need to have a good understanding of how much money your small business will need to get off the ground and grow. There are a few key factors to consider when estimating your funding needs:
-The amount of money you need to cover your startup costs, including any equipment or inventory purchases, leasehold improvements, and initial marketing and advertising expenses
-The amount of working capital you'll need to keep your business running smoothly until it becomes profitable
-The amount of money you'll need to finance your growth plans, such as expanding into new markets or adding new products or services
Once you have a good idea of how much money you'll need to raise, you can start exploring different financing options.
Securing Debt Financing.
One option for financing your small business is to take on debt. This could include taking out a small business loan from a bank or other financial institution, borrowing from friends or family, or using credit cards. If you go this route, it's important to make sure that you understand the terms of the loan and can afford the monthly payments. Also, be aware that taking on debt can put your personal assets at risk if your business is unable to repay the loan.
Raising Equity Financing.
Another option for financing your small business is equity financing, which involves selling a portion of ownership in your company in exchange for investment capital. This could involve bringing on investors such as venture capitalists or angel investors, or selling shares of stock to the public through an initial public offering (IPO). Equity financing can be a great way to raise capital, but it also comes with some risks - most notably, giving up partial ownership and control of your company.
Registering Your Business.
The first step in registering your business is to choose the legal structure that best suits your company. The most common business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each type of business has its own advantages and disadvantages, so it's important to understand the difference before you decide which one is right for you.
Sole Proprietorship: A sole proprietorship is the simplest and most common type of business structure. It is owned and operated by one person, and there is no legal distinction between the owner and the business. This means that the owner is personally liable for all debts and liabilities incurred by the business.
Partnership: A partnership is a business owned by two or more people. Partners share equally in the profits and losses of the business, and each partner has unlimited personal liability for debts incurred by the partnership.
Limited Liability Company (LLC): An LLC is a hybrid between a sole proprietorship/partnership and a corporation. Like a sole proprietorship or partnership, an LLC is owned by one or more individuals who are personally liable for its debts. But like a corporation, an LLC offers its owners limited liability protection from lawsuits and other creditors' claims.
Corporation: A corporation is a legally separate entity from its owners, meaning that shareholders have limited personal liability for the debts and liabilities of the corporation. Corporations can be either privately held or publicly-traded on stock exchanges.
Registering Your Business Name.
After you've chosen your business structure, you will need to register your business name with the state government. This is typically done through the Secretary of State's office. The process and fees for registering a business name vary from state to state, so it's important to check with your local government office for specific requirements.
In most states, you can register your business online, by mail, or in person. You will need to provide the following information:
-The legal name of your business
-The type of business structure you have chosen
-The names and addresses of the owners
-The registered agent for your business
-The address of your principal place of business
Obtaining the Necessary Business Licenses and Permits.
Depending on the type of business you are starting, you may need to obtain certain licenses and permits from state and local governments. For example, businesses that sell food or alcohol will need to obtain a license from the health department; businesses that sell firearms will need a license from the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and businesses that operate vehicles for hire (taxis, limousines, etc.) will need a license from the Department of Motor Vehicles.
It's important to research what licenses and permits are required for your specific type of business before you start operating. Failure to obtain the necessary licenses and permits can result in fines or even shutdowns by government agencies.
Building Your Business Team.
The first step in building your business team is hiring employees. When hiring employees, it is important to consider the skills and experience that they can bring to your business. You will also want to consider the cost of hiring and training employees. There are a number of ways to find qualified employees, including online job boards, networking, and referrals from friends and family.
Working with Independent Contractors.
Another option for building your business team is working with independent contractors. Independent contractors can be a great way to get started because they can provide the services you need without the commitment of a full-time employee. However, it is important to make sure that you have a written agreement in place that outlines the scope of work and compensation for the contractor.
Building Your Advisory Board.
Another way to build your business team is by creating an advisory board. An advisory board is made up of individuals who can provide advice and guidance on a variety of topics related to your business. This can be an invaluable resource for small businesses, particularly those that are just starting out. When choosing members for your advisory board, look for people who have experience in the industry you are entering as well as people who have successfully started their own businesses.
Conclusion
Starting a small business can be a daunting task, but with careful planning and execution, it can be a successful endeavor. In this blog post, we've outlined some key steps to take when starting a small business in 2020. From defining your business idea and conducting market research to developing your business plan and raising financing, to registering your business and building your team - following these steps will help you set your business up for success. So if you're thinking about starting a small business in 2020, don't wait - start planning today!