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10 Tips for Starting a Small Business

10 Tips for Starting a Small Business

Each year millions of Americans choose small business ownership over traditional employment. Although advancements in technology have made the leap into entrepreneurship attractive, starting a business is not for the faint of heart. To assist new entrepreneurs, we put together 10 tips for starting a small business.

  1. Evaluation – Conduct a self-evaluation to determine if business ownership is right for you. Ask yourself, “Why do I want to start a business?” “Do I want to invest the time and effort?” No matter how great your idea or how well you understand the industry, it will take time to start and grow your venture. In the 2015 Bank of America Small Business Owner Report, 55 percent of the small business owners surveyed indicated they work 50 hours a week.
  2. Develop and cultivate your idea – Take the time to thoroughly develop your idea, product or service. You should be able to clearly define the need for it. What issue will it solve for your potential customers? Cultivate it from start to finish.
  3. Research your idea along with your market – Enough cannot be said about research. Part of bringing your product or service to the market is first understanding the market. Start conducting research to determine if a present market exists for your product or service and if so, continue researching the current competition. This will also help you determine your target audience.
  4. Write a business plan – Every business must have a solid business plan. As discussed in a previous Kabbage article, the purpose of a business plan is to set specific objectives and to provide a roadmap for your business. Some key elements that must go into a business plan include:
  • Executive Summary
  • Business Section
  • Market Analysis
  • Financing Section
  1. Write a marketing plan – The creation and implementation of a marketing plan is key to starting and growing a successful business operation. The components of the marketing plan should include:
  • Clear description of your target market
  • Description of your services
  • Unique selling proposition of your company. This will include the “why” – the thing that sets you apart from your competition.
  • Pricing and positioning strategy. Explain your position in the market and your pricing.
  • Identify your competition
  • What channels will your customers use to buy from you? For example, will your customers buy directly from your website or will you have a brick-and-mortar location where they can walk in and purchase goods and services directly from you?

 

  1. Establish a budget – Operating a business requires proper financial planning. Begin by mapping out specific costs while setting some funds aside for emergencies.
  2. Fund your new business – You know that you need capital – now it’s time to figure out how to access it. Navigating through all of your funding options can be scary, but it doesn’t have to be. Begin by carefully researching all available options. Some funding sources include: platform lenders like Kabbage, traditional bank loans, angel investors, crowdfunding and lines of credit.
  3. Naming your business – A few tips to consider when giving your business a name are:
  • Start with your brand in mind.
  • Choose grammatically correct words that can be pronounced and spelled.
  • Test the name with friends and family.
  • Stay away from niche names. Think longevity.
  1. Determine your corporate structure – One of the most important decisions that you will have to make as a business owner is selecting the type of legal structure for your company. You will have to decide if you wish to remain a sole proprietor or incorporate your business as a corporation or limited liability company (LLC). Some advantages to forming a corporation or LLC for your business include:
  • Asset Protection – Incorporation provides asset protection because your personal assets become separate from your business assets. The advantage of this is that if there is ever any litigation against your business, in most cases your personal assets are protected.
  • Name Protection – The process of forming a corporation or an LLC includes name protection at the state level. This means that no other company can use your business name.
  • Credibility – Establishing a legal entity for your business will bring credibility to your company, which is especially important if you plan to seek funding.
  • Tax Benefits – There are additional tax benefits that are afforded to incorporated entities that sole proprietors do not receive.
  1. Obtain licenses and permits – Depending on the type of business that you are starting, you may be required to obtain additional licenses and permits. Check with your local government agencies to find out if you need additional licenses or permits.

Starting a business can be one of the most fun and rewarding experiences that you will ever do. While at times it may seem intimidating, there are tons of resources at your disposal. Kabbage small business loans for instance can help you with the finances you need to grow today, having to wait many weeks to find out if you have been approved.

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Kabbage Team

The Kabbage Team is here to not only fund the small business loans you need, but to help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.

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