In spite of tough economic times, many people still choose to start up small businesses.
The draw of owning and operating one’s own business, and succeeding against all odds, is testament that the entrepreneurial spirit is alive and well.
For those considering the idea of opening a small business, file away a few tips, among which include:
1. Write the plan: Whether it’s a formal or an informal written business plan and/or financial plan, it is essential to provide a big picture view of the proposed business; it is also important to have the plan in hand when requesting funding.
2. Research and obtain funding: Most startup businesses require funding; research available funding options and follow directions to apply (see next section for some ideas of funding sources).
3. Make it legal: Take care of all legal requirements, including choosing the appropriate location zoned for business; determining the business structure [sole proprietorship, partnership, Limited Liability Company (LLC/ Ltd), corporation, S corporation, non-profit or cooperative]; registering the business name and obtaining a tax identification number; and obtaining all required business licenses and permits.
4. Create marketing strategies: Identify the target market, and then determine what are the most appropriate marketing methods to reach the prospective customers.
5. Grow and work hard: Take advantage of business training services, business counseling, and related services for professional development as a business owner. Work hard, maintain a strong work ethic, and establish a good reputation.
One of the primary sources for funding small business startups is, of course, the Small Business Administration (SBA). The SBA offers the following types of funding to qualifying businesses:
* SBA secured business loans: Based on collateral and assets; includes a variety of funding options, such as special purpose loans; export loans; rural business loans; micro-loans; and loans for specific groups of individuals, including women, minorities, veterans, and “encore entrepreneurs” (individuals aged 50 and over).
* SBA unsecured business loans: No collateral monetary loans; may include business credit cards.
* SBA government loans: Typically offered in partnership with banks and credit unions.
Other funding sources may include the following, depending upon the nature of the business, in the form of grants, loans, or investors:
* Non-profit organizations: Many local and state non-profit organizations provide various types of financial assistance to promote small business ownership and entrepreneurship.
* Local, state, and federal agencies: On all levels, these agencies don’t typically simply hand out money; however, they do often provide financial-assistance programs, low-interest loans, and specific funding for businesses that meet designated criteria.
* Gender/minority-specific grants: Some organizations or causes provide grants to women and minority entrepreneurs and small business owners.
* Grant competitions: Some organizations host grant competitions, relying on input from employees, customers, vendors, and others, to provide recognition and reward in the form of grants.
* Angel investors: Much like the benevolent beings indicated by the term angels, these individuals or companies with money to invest become benefactors for businesses selected to receive funding.
Mistakes to Avoid in 2013
Individuals wanting to start up small businesses in 2013 should avoid several key mistakes:
* Don’t omit or skimp on the business plan.
* Don’t underestimate the importance of experience and expertise.
* Don’t fail to value the reach of marketing through social media.
* Don’t overspend—it takes money to make money, but spending all the money before making any is lethal to the business getting off the ground.
* Don’t ignore criticism and feedback.
* Don’t fail to understand tax laws and other business-related laws.
Get Started, Keep Going
Once a prospective business owner makes the decision to open a small business, and gets it up and running, the next challenge is to keep it going.
The small business owner who does his or her part to establish a good reputation in the business world, and builds a solid customer base, certainly takes a step in the right direction toward succeeding.
Is 2013 the year you kick off a new small business?
About the Author:
As a prolific freelance writer with more than 20 years of experience,K’Lee Banks has covered a variety of business topics, including how small business owners and entrepreneurs may need to call on small business reputation management over time.