What Should I Consider Before Starting a Small Business?

Malcolm Tatum
Malcolm Tatum

Many people have the dream of taking control of their lives and starting a small business. While becoming a small business owner has many rewards, the task is not for the faint of heart. Before putting your plans into motion, here are some issues you must consider and resolve before creating your own business.

Researching IRS rules for small businesses before you start can save you headaches and money later.
Researching IRS rules for small businesses before you start can save you headaches and money later.

One of your first tasks is to assess the state of your finances. This includes reviewing your tangible assets, especially cash on hand, and the total amount of outstanding debt you currently carry. During the first months or even years of your small business venture, there is a good chance you will not be able to depend on the business to provide a personal income. Having resources to keep afloat until the company can become profitable is absolutely necessary if you are serious about starting a small business.

Determining a niche market is an important aspect of starting a small business.
Determining a niche market is an important aspect of starting a small business.

Determining the nature of your business venture is also important. Presumably, your reason for starting a small business is to make money. This means creating a business that will meet the needs of consumers, can be competitive in the marketplace, and has the potential to last for many years. Do research into what niche markets you can tap into, and decide if those markets are strong enough to allow your business to turn a consistent profit.

Evaluating potential competitors is important before starting a small business.
Evaluating potential competitors is important before starting a small business.

With an idea of what type of business you want to start, begin to develop a business plan. While there are many models of this type of plan, the basics involve defining the mission and goals of your business and creating a logical and realistic process to reach those goals. Depending on the situation, your business plan may be relatively simplistic or highly detailed. Taking the time to create this document is very important, regardless of the type or size of business you envision.

It's important to decide if a business can be sustained from the owner's home or if a storefront is needed.
It's important to decide if a business can be sustained from the owner's home or if a storefront is needed.

Small business owners also know that it is often necessary to borrow funds to get a business going. You will want to look into all possibilities for financing your business venture, including small business grants and loans. Many communities have at least one lender who will extended a small business loan to individuals and partners who are starting a small business, provided they have excellent credit and a viable business plan in place.

A person interested in starting a small business should first write a business plan.
A person interested in starting a small business should first write a business plan.

Keep in mind that starting a small business means functioning in a number of different capacities. You must learn how to attract and retain customers, initiate and maintain proper accounting records, learn to operate your business on a budget. If you do not already possess the basic skills needed for these functions, audit some classes at a local college. The investment of your time will pay off significantly once your business is up and running.

Location should be considered before opening certain small businesses.
Location should be considered before opening certain small businesses.
A small business owner must have the financial resources to keep the company going until it becomes profitable.
A small business owner must have the financial resources to keep the company going until it becomes profitable.
Small businesses owners need to consider the popular payment methods that customers might use.
Small businesses owners need to consider the popular payment methods that customers might use.
Small businesses often pursue loans.
Small businesses often pursue loans.
Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

You might also Like

Readers Also Love

Discuss this Article

Post your comments
Login:
Forgot password?
Register: