How do I Start a Small Business?

It is easy to start a small business. It is not so easy to make it profitable. Starting a small business requires that you wear every hat imaginable, and that you work far more hours than you would at a typical job. Still, for those with the desire, motivation, and energy, starting a small business can bring a lifetime of fulfillment.

The prospective small business owner should first have a firm grasp of the type of enterprise he wishes to create. Prior expertise in your field of endeavor is crucial. The most successful small businessperson is the one who opens his doors not just to earn a living, but because he loves what he does. Without a high degree of enthusiasm, the worries, headaches, and demanding pace inherent to operating a small business can soon lead to exhaustion and failure.

To start a small business, you should first write a business plan. This does not have to be a massive tome covering every theoretical aspect of your business, but it should at least outline your estimated costs, expenses, and goals for the first three years. The business plan should serve as a guideline, with plenty of room for improvisation along the way. Such a plan will allow you to have a reasonable idea of potential obstacles, and will provide a rough idea of the revenue needed to remain in operation.

A business plan should also identify your primary competitors, the general economic conditions of the area in which your business will be located, and likely demographic trends. Once the plan is completed, you should have a reasonable idea of how much money you need to start your business. This brings up the next stage of your start-up, which is acquiring your initial funding.

Some people have the resources to start a small business on their own, but most require some sort of financing. Check with your local financial institutions as to the possibility of a Small Business Administration (SBA) loan. Better yet, if your idea seems innovative, you might be able to entice private investors to back your enterprise. The least desirable course is to borrow money from friends and family. They might be willing to help, but if your business fails to succeed then your familial relationships may fail with it.

Having ample capital is the make or break factor if you seek to start a small business. Most small businesses that fail do so not because of bad management, because they are under-capitalized. A financial cushion is needed during slow times, and unexpected expenses are inevitable. Be prepared at any time for increases in leases and insurance premiums, equipment breakdowns, staffing problems, and costs associated with the never-ending licensing fees and regulatory mandates of governmental agencies.

Starting a small business is not for everyone, and in truth it can be either a dream or a nightmare. For those who seek to be their own boss, and to pursue the vocation of their choosing, it is a taste of freedom. The greatest chance of success lies in advance preparation, and in possessing an attitude that places the pursuit of happiness over large profits.