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How to start your own small business: from idea to success

Good for you! You’ve already taken a big, sinister step into the unknown by simply considering the option. Whether you have a good old trade diploma or do not see a marketing plan, if it would sting your nose, every young entrepreneur in the same company starts exactly in the same boat. You’ve never done it, you’re a little scared and everyone around you thinks you’re crazy.

Welcome to the club!

But knowing that you want to start your own small business does not necessarily mean that you know how to start your own small business. You have us for that! We present everything you need to know to start and run a successful and profitable small business that customers love.

Ok, so it’s obviously a lie. But we will definitely give you a strong lead!

(We also have a bonus infographic that puts it all into practice if you’re a visual student.) Have fun!

How to start your own small business: find this perfect idea
In our experience, there are usually two types of entrepreneurs.

First, there is the hesitant entrepreneur. Anyone who has come across a commercial idea is too perfect not to pursue, but who is a little less sure about “owning a business.” If you are, you go straight forward because you do not need this section. What luck do you have?

Then there is the other type of contractor. Who was born with this ambitious, independent and adventurous atmosphere that can not be contained? Who can barely work for a paycheck, but never have the shots, but who has no idea what a small business to start.

Do you know that? Continue reading, friends. If you answer these three questions, you can sell your creativity until you find the perfect idea.

What skills do you have?

Understanding how to run a small business is a pretty strong learning curve without having to acquire skills for a new job. So, instead of reinventing the wheel with a company in a totally different industry, start with what you already know.

Your answer could be a hobby or a passion, skills from a previous job, your university or a certain natural talent.

What resources are available to you?

Do you already have a garage with lawn equipment? Maybe you should start a landscaping company! Have you inherited a warehouse or sales floor? What kind of business opportunity could it offer? Or, if you have access to a multitude of contacts that could be your customer base in a particular area, this could also be a great source for new business ideas.

To be successful, starting your own small business is likely to require significant investment in resources. When you find out what you already have, you can find a business opportunity with maximum profitability.

What needs could you meet?

When you look around your small corner of the universe, what product, what service or what benefit do you miss? What needs do consumers have to meet? Many of the most successful business ideas come from identifying a problem and inventing the solution. So be the customer, then build the company you want, already on!

Well, what do you think? Did you open the sky? Is the magic answer suddenly clear? Hey, maybe not quite. But there is always hope!

If the questions above do not lead to a particular creative genius, take advantage of some of these great business ideas or get inspired by one of today’s most profitable industries. Remember, you do not have to reinvent the wheel!

To start your own small business: Write your business plan
Whichever business idea you choose, every successful small business starts with a solid business plan.

That’s right. Taking the time to sit down and write a business plan is probably one of the smartest and most important steps in starting your business, but it’s also the most overlooked step.

Let’s be honest. If you feel this entrepreneurial spirit, that you have found the best idea and are ready to run, nothing less fun seems to be than slowing down this momentum to write a thesis. Sheets? Pie? Statistical analyzes? No thanks!

But listen to us, because the truth is that bar charts and complex results are not what it’s all about. There are many online resources that can show you what to include in your business plan, and how to make it look good for investors, loan officers, or others who want to see it in the future. Plan is much more about the process than the result.

Basically, writing a business plan is about thinking and answering very difficult questions about your small business – questions that, once taken into account, will make you consider the purpose of your business, if not thought out, the market , If you did it right, the process of writing your business plan will make you turn your initial idea into something much more resilient and ultimately more fruitful than it would otherwise have been.

Let’s take a look at the top 10 questions that you need to answer as part of your business planning process.

1. What is your small business doing?

Can you see it? All this business planning does not have to be difficult! Once you have a business idea, just take the time to describe your company’s product or service.

Go on, write a long and short answer to this question, and then validate the short answer in memory. That’s what you call your pitch lift, and you continue to tell friends, family, customers, lenders, investors, and more.

2. For whom is your little business?

That’s what you call your target market – the group of people your company should serve. The more accurate you can answer this question, the better you can create products, services, and marketing campaigns that meet the needs of your demographic group. Consider creating customer profiles to create a mental image for yourself and your team members of people you want to do business with.

3. Who are your competitors?

Many of the world’s most successful entrepreneurs will tell you that you do not have to worry about your competitors. That’s what you do.

This is good advice if you are at the heart of your business. After all, you can not live your life by responding to everything your competitors do. But when you start, it’s important to know at least who your main competitors are and how their activities are similar and different than yours.

Research to identify the main competitor of your company. This saves you from creating a business model that reflects an already established alternative.

4. What is your unique value contribution?

Do not be put off by sophisticated terminology. Your unique value contribution essentially differentiates your company from the competition. What makes your customers decide on your business? Potential unique value propositions may include the location of your business, a unique product feature, a commitment to quality, or even your price.

5. How do your customers find you?

Your answer to this question will form the basis of your company’s marketing strategy. Do you want to generate business mainly through word of mouth? Would you like to continue paid advertising, and if so, by what means? How does your website, social media or other online presence interact with your customers? These and other questions will help you define how to turn your target market into a loyal and repeat customer base.

6. Which resources do you need?

As they say, you need money to earn money. What do you need to build your product or service? Do you need production equipment? Computer and software? Sales area? Do you have to hire external employees or contractors?

Now take the time to list all the one-time and recurring expenses you may incur in your activities. If you need other non-cash expenses, such as: For example, if you already own devices or have business contacts from a friend or family member, include them as well.

7. How will your small business make money?

You may have a good idea to offer a product or service that customers will love, but that does not necessarily mean that your business idea will bring you a profit. Your business model determines how your business generates revenue, covers expenses, and ultimately earns more money than it spends. In the end, many popular companies fail due to a flaw in their business model. It is therefore important to learn from your predecessors by taking the time to pinpoint the benefits of your business.

8. How long does it take to make a profit?

It is common for new companies to suffer losses at the beginning, especially in the first year, as they invest in the resources they need, work on acquiring clients and eliminating the difficulties of the business model. But in the long run, we assume you went into business to make money! Use revenue forecasting to determine the time it takes to restore initial investment, profitability, and profitable business management.

9. Which values ​​will you never endanger?

When it gets difficult, it’s important to know what you stand for to make the best decision on every corner. What are the most important values ​​for you personally and as a company? What are your non-negotiable ones?

By putting the core values ​​of your company on paper right from the start, you can make the right choice and choose the direction for a critical problem.

10. What is your final?

Are you building a business that you want to sell? Or are you working for a long-term, sustainable family business that you might one day pass on to your children or grandchildren?

Knowing where you want to meet when helps you to consider many of your company’s decisions. Now take the time to describe your long-term endgame and the steps you need to take to achieve it.

How to start your own little business: make some official
Now that you’ve done the overall plan, it’s time to get down to business. When you first start, you will experience more paperwork and legal procedures than at any other time in your organization.

I know that this part is not funny, but persevering! Taking the time to set up your new business right from the start will save you a lot of headaches (and possibly more important consequences).

Here are the key steps you need to take to legally establish your business with federal, state, and local governments.

Register your company name

If you want to use a unique name for your business, send it to your state agency. Even if you later decide to change your legal structure, premature filing of your DTA will prevent you from losing your idea of ​​a smart name to a co-entrepreneur.

Choose your legal structure
When you’re ready, the next “official” task of your new to-do list is to choose a legal structure for the companies. The chosen structure influences how you influence federal and state taxes, the roles of different team members, and how you can be held accountable.

Due to the long-term and potentially significant impact of your business structure, it is advisable to consult a lawyer to help you make that choice. Nevertheless, we give you a quick overview of the different business structures that you can choose.

one-man business

This is the most basic form of business structure in which you are the sole owner of the business and responsible for the associated liability. If you consider running a service company and do not accept capital or hiring employees, a sole proprietorship could be the ideal structure for you.

And the best news? You do not have to take any formal steps to start a sole proprietorship! If you work under your own name, you can just go straight to the store. And if you have a good idea for a company name, your “do business as” deposit (see above) is all you need.

partnership

This structure defines a single company in which two or more people own. You can choose from multiple partnership structures, including a partnership, a limited partnership, or a joint venture. The most experienced entrepreneurs do not recommend partnerships as a business structure because they do not provide a high level of liability.

It is also important to remember that a partnership is a bit of a marriage, as long as you work closely with your business partner and are financially and legally related to it. Make sure you choose a partner with whom you can work well in the long term, and set clear terms and expectations from the outset, detailing the roles and responsibilities of each party.

Companies

A business is a more complex business structure, usually reserved for large companies or those that are particularly demanding in the field of insulation research. If you expect your company to employ many people or need a complicated legal structure, it may be worthwhile starting a business now.

However, it is important to remember that establishing a company requires a board of directors and senior executives, and that the requirements for tax reporting are more complex. Most small businesses can start out without logging in as a business.

S Corporation

This corporate structure is very similar to an ordinary C company … With one notable exception: S companies are taxed at the level of each business owner rather than being taxed by the business. If you think that you need the structure of a business, but do not want to spoil the complex dividend deposits, a company S can be an excellent compromise for you.

Company with limited liability

The Limited Liability Company (LLC) provides a company’s liability protection and the flexibility and tax-payability of a sole proprietorship or partnership and is a “best of both worlds” corporate structure whose popularity has grown significantly in recent years. Entrepreneurs who choose an LLC structure can choose between a sole proprietorship, a partnership or a limited liability company.

Again, choosing a structure for your business is one area in which you should consult a lawyer for personal advice. This is an important decision that will affect your approach in the long term. Do your research and make sure you understand the implications of the structure you choose.

Obtain a tax identification number

This number is also referred to as your employer’s identification number (abbreviated to EIN) and helps the IRS track your business for tax purposes. Think of it as a social security number for your business.

Although not all companies need an employer identification number, you may need to deposit an EIN even if you do not hold any employees, especially if your business is a business or a partnership. Read here to see if your business needs an EIN.

You can get an employer identification number by applying online to the IRS website.

Register for local and state taxes

In most US states and territories, in addition to federal trade tax, you must pay income and employment taxes for your business. Some states have additional tax requirements, such as state-mandated employee compensation and unemployment insurance.

Registration, requirements and registration procedures vary considerably from state to state. Click here to access the tax information specific to your business.

Registration for trademarks or patents

Is your company a new invention or does it depend heavily on a specific brand? If this is the case, you may need to register a trademark or file to obtain a federal patent to protect your intellectual property. The process of obtaining a patent or official mark from the US government can take months, even years. If you think this is important to your business, start and send your applications faster.

How To Start Your Own Small Business: Manage Your Finances
Some small business owners are experts in finance and management. You have a business degree, private sector experience and sound financial management knowledge of small businesses.

But if you read this guide, we assume that you are the other entrepreneur. The one with this unwavering spirit and an idea one desperately wants to pursue, but who knows almost nothing about the dollars and the feeling of running a business.

If the idea of ​​managing the finances of your new small business gives you heart palpitations, do not panic! It’s not as difficult as it sounds – we promise.

Here’s a guide for beginners that you need to know about managing your new business finances:

Configure basic accounting documents

Running a small business requires a lot of paperwork. You need accounting records to file your tax returns, apply for funding for your business, and track your revenue, expenses and profitability internally.

Every small business owner should regularly manage at least these three basic accounting documents:

1. Balance sheet

The balance sheet is essentially an overview of the financial situation of your company at a given time. It lists the assets, liabilities and equity that your company owns at a given time and is used to calculate the net worth of your business.

Maintaining a “balanced” balance sheet in which total assets (everything your company owns) is equal to liabilities and equity is the basic principle of the land registry.

If you do not know how to create a balance sheet for your business, you will find a free downloadable balance sheet template here.

2. Income statement

Sometimes referred to as a profit and loss account, your income statement summarizes your company’s income and expenses in one year so that you can calculate your final result for that year. Accurate performance is critical to determining the profitability of your new business and measuring profitability over time.

Check out our free download income statement to get started recording your small business’s revenue and expenses.

3. Cash flow statement

Having enough money to cover expenses can affect a company’s financial health. In fact, this question is so important that there is an accounting document dedicated to monitoring cash flows.

Your cash flow statement reflects the inflow of revenue and expenditure outflows from all your business activities over a period of time, usually in a financial month or quarter. The inflow will come from the sale of goods and the receipt of payments on invoices, while outflows will come from the purchase of warehousing, labor and marketing costs and other overheads.

Need help to track the cash flow of your business? We have a free downloadable cash flow template that will get you started right away.

Choose the best accounting software for you

If you try to manage your accounts manually, managing the above documents can quickly become difficult. Fortunately, there are several excellent accounting software options that eliminate the uncertainties of your accounting and automatically generate these accounting documents.

Take a look at our favorite cloud accounting options for small business owners to find the program that fits your needs.

QuickBooks

QuickBooks is considered the gold standard of most small business accounting software and offers everything for every small business – from restaurants to retailers, consultants and more.

If you’re looking to develop a mid to big business with multiple revenue sources, QuickBooks is the best choice for maximum functionality. But if you keep it small and are moderately technophobic, consider a simpler option.

FreshBooks

Does the idea of ​​accounting software cause hyperventilation? If so, Freshbooks could be the best option for your needs. It offers an accessible look with all the features small businesses need without complicated additions.

In addition, Freshbooks’ premium support team helps you manage your easy-to-configure accounting system, making it an ideal service for new entrepreneurs.

wave

If you are just looking for simple, simple accounting functions and tight budgets, Wave could be the perfect solution. As long as your bookkeeping experience does not bother you, Wave’s simplest cloud-based program is free. Your paid service also offers additional features that serve as an intermediate between Quickbooks Online and Freshbooks.

Hire an accountant or an accountant

While the right software can do wonders to assist you in managing your small business finances, some areas of small business accounting are about the average owner of a small business.

Check with your lawyer, bankers, and other business owners to get a CPA and immediately build a relationship with your new CPA. It is important to choose a person whose personality fits your personality, who is available to answer your questions, and who can deal with less experienced financial areas.

But no matter who you choose as an accountant or which responsibilities you entrust to, it is important that you personally be involved in your finances for small businesses and that you have control mechanisms to prevent theft or fraud. Be careful and remember that you are responsible for the finances of your business!

Follow the tax obligations of companies

Understanding and complying with tax regulations should be a top priority in your company’s financial management, as well as proper bookkeeping. The consequences of failure to comply with your tax returns are difficult because you may lose your business and even have criminal consequences. Although dealing with the IRS can intimidate, it is not something that you can ignore.

Let us break down the most important corporate tax obligations that you must adhere to:

income tax

All businesses must submit annual tax returns and make payments based on their income. The exact form of taxation you use to make your tax payments depends on the structure of your business: sole proprietorship, partnership, corporation, limited liability company or limited liability company (LLC).

Tax on self-employment

Individuals who work for themselves (including small business owners) must pay social security and health insurance taxes through a self-employment tax. This tax is similar to taxes withheld by most employees.

estimated tax

Both income tax and self-employment are considered “taxes”. You must submit quarterly documents that estimate the taxes you owe in these categories and make the payments accordingly. Click here for forms and more information on estimated quarterly tax payments.

income tax

If you have employees who work for your company, you have additional tax obligations related to these employees, including social security and health insurance taxes, federal tax deductions, and federal unemployment benefits. Click here for specific information on submitting income taxes to your company.

excise

These taxes do not affect all companies. Excise taxes are most common for companies that consume a lot of fuel, but also for companies such as tanning salons, manufacturers of sheetfed equipment and so on. Click here to see if you need to file a federal tax return for your business.

Are you worried about collecting quarterly taxes and fulfilling your tax obligations as a company? Here is a detailed description of the steps and what you need to know.

How To Start Your Own Small Business: Finance Your Small Business
At some point in your organization’s financial development, you might be wondering how to finance a business, whether to deal with short-term cash flow problems or to finance your business growth.

Entrepreneurs choose to finance their business in a number of ways. You may be able to talk with friends and family, seek debt financing in the form of a commercial loan, or even work with an investor! Below we will examine the basics of various financing options that you can consider.

Loans for small businesses

One of the most common ways for small business owners is to borrow money from a bank or other lender. The growth of the alternative credit market has produced a variety of credit products that meet the needs of entrepreneurs, each with different costs, payment structures and application processes.

If you believe that you may need credit to fund your business goals, take the time to review this quick breakdown of the most common types of loans desired by small business owners:

Term loan

Probablement la première chose à la source vous pensez lorsque vous imaginez des prêts aux entreprises, les prêts à terme offrent un délai de remboursement défini, un nombre défini de paiements et un taux d’intérêt fixe ou variable.

En fonction des besoins de votre entreprise, de votre cote de solvabilité et d’autres facteurs, de nombreux propriétaires de petites entreprises, tant de banques traditionnelle que de prêteurs alternatifs non bancaires, offrent un largeéé éventail de prêts à terme et des échéances d ‘ un an avec paiements quotidiens. jusqu’à 5 ans avec des paiements mensuels et tout le reste.

Prêts SBA

En raison de la nature risquée des prêts aux petites entreprises, de nombreux prêteurs commerciaux ont par le passé hésité à prêter de l’argent aux propriétaires de petites entreprises. En guise de solution, l’administration des petites entreprises a commencé à garantir jusqu’à 80% du principal du prêt pour les prêts à terme agreementis par les établissements de crédit participants.

La SBA offre une variété de program de prêt pour répondre à une variété de données démographiques et de besoins différents. Si vous envisagez un prêt SBA pour votre petite entreprise, consultez notre aide-mémoire téléchargeable pour connaître tous les programs de prêts proposés par la SBA.

Gardez à l’esprit que si cette garantie peut inciter certains prêteurs à considérer les demandeurs qui ne respecté pas leurs critères de prêt stricts, demander un prêt SBA implique toujours de longs documents, et le processus peut prendre plusieurs mois.

Financing d’équipement

Si vous avez spécifiquement besoin de liquidité pour faire un gros achat d’équipement (pensez aux ordinateurs, aux machines, aux véhicules, etc.) pour votre entreprise, le financement d’équipement pourrait être le bon choix pour vous.

Ce produit de financement fonctionne de manière très similaire à un prêt automobile, avec le montant que vous pouvez emprunter en fonction du prix et du type d’équipement que vous empruntez. Et parce que l’équipement lui-même sert de garantie, il ne vous sera probablement pas demandé de fournir des garanties supplémentaires.

Les conditions de financement des équipements fonctionnent généralement à un taux d’intérêt fixe, généralement entre 8% et 30%, avec une durée déterminée. Vos paiements seront donc les mêmes d’un mois à l’autre.

Financement de factures

Aussi connu sous le nom de financement des comptes clients, le financement par facture est un système dans lequel les entreprises achètent vos comptes clients grâce à un prêt rapide d’environ 80% de la valeur de vos factures. Par la suite, vous recevrez la plupart des 20% supplémentaires que vous devez, proportionnellement au montant de vos factures effectivement remboursées.

Si les retards de paiement des clients mettent gravement en péril votre trésorerie, le financement sur facture est une excellente option pour remettre vos créances sur les rails.

Emprunt de courte durée

Pour les entreprises ayant des besoins de financement plus petits et immédiats, les prêts à court terme peuvent sauver des vies. Ces prêts fonctionnent de la même manière que les prêts à terme traditionnels, mais couvrent des montants compris entre 2 500 et 250 000 dollars, avec des durées comprises entre 3 et 18 mois.

Avec des taux d’intérêt aussi bas que 14%, les fournisseurs de prêts à court terme peuvent souvent vous faire gagner de l’argent en deux jours seulement, ce qui vous permet de payer le loyer, la masse salariale ou les frais généraux immédiats.

Lignes de crédit

Peut-être la forme de financement d’entreprise la plus flexible disponible, une ligne de crédit d’entreprise vous permet de mobiliser des capitaux pour répondre à divers besoins commerciaux. Une fois établie, vous pouvez utiliser votre ligne de crédit comme vous le feriez pour une carte de crédit personnelle ou professionnelle: obtenir plus de fonds de roulement, acheter des stocks, gérer des flux de trésorerie saisonniers, rembourser d’autres dettes ou répondre à presque tous les autres besoins.

Si vous envisagez de faire une demande de prêt pour une petite entreprise à l’avenir, assurez-vous d’examiner régulièrement vos rapports de crédit personnels et professionnels, et de faire ce que vous pouvez améliorer. Outre vos revenus annuels, votre temps d’affaires et votre solde bancaire moyen, vos notes de crédit personnelles et professionnelles sont le facteur le plus important qui déterminera votre capacité à obtenir un prêt pour petite entreprise.

Solutions de financement d’entreprise

Les prêts aux petites entreprises ne sont pas le seul moyen de financer votre petite entreprise. Voici quelques-unes des solutions envisageables pour couvrir les coûts initiaux de votre dernière entreprise:

Investisseurs providentiels

Chaque jour, des milliers d’investisseurs apportent à la fois des ressources financières et de l’expertise à ce qu’ils considèrent comme la «prochaine grande chose».

Les investisseurs providentiels sont des individus de moyens – souvent des entrepreneurs prospères eux-mêmes – qui choisissent d’investir personnellement dans une grande variété de start-ups pour accroître leurs revenus et redonner à d’autres entrepreneurs leurs ressources et leur expertise.

En échange de leurs fonds et de leur expertise, non seulement vous leur donnerez des actions de participation dans votre entreprise, mais dans de nombreux cas, ils obtiendront également un certain pouvoir de décision. Donc, avant de remettre les clés de votre entreprise à un investisseur providentiel, assurez-vous de vous engager dans la même direction.

Entreprise de risques capitaux

Similar to angel investors, venture capital firms are more organized, established organizations that fund larger scale business ventures by purchasing a percentage of the business in a startup’s “round” of funding.

Funding your business through a venture capital firm can be highly competitive and has a certain barrier to entry that not all small business owners are able to meet. Most venture capital firms make minimum investments in the million dollar range, so consider this option only if you’re on the hunt for large scale funding.

Friends and Family

If your family and friends seem supportive of your business venture, they might be willing to invest funds to help your business succeed. Of course, accepting funds from friends or family comes with its own set of challenges. Even when everyone has the best of intentions, loss of income from a failed business deal can ruin relationships.

Should you choose to go this route, do everything you can to keep it professional. Offer a well thought-out and professional-quality investment proposal as you would to any other investor, and set the exact terms of the investment in writing. The more negotiated up front, the less risk you’ll have of dealing with miscommunications or relational challenges with those closest to you down the line.

crowdfunding

Platforms like Kickstarter or IndieGoGo are great for smaller ventures looking to offer product or other goodies in exchange for a contribution. Larger scale ventures might consider equity crowdfunding platforms like EquityNet that sell company equity to capital investors in a crowdfunding format.

Don’t underestimate the value of a few hundred $50, $20, or even $10 pledges towards your overall fundraising goal. That money adds up fast. And if your campaign goes viral—catching the attention of folks outside your immediate network—the possibilities grow even further.

How to Start Your Own Small Business: Ready, Set, Go!
There you have it, friends. That’s everything you need to know to launch a successful business!

Ha! Funny, right?

The truth is, no article on the internet could ever encompass all that you need to know to launch and successfully grow a strong, healthy small business. Being an entrepreneur is truly not for the faint of heart: owning your own business is a never-ending, 24/7 adventure.

The learning curve will be constant. Google will be your best friend. And the challenges and questions that come up for each business owner will vary as widely as the different types of businesses out there.

Even so, we hope that this brief guide answered some important questions and gave you a preview of things to come. Good luck!

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