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Essential Requirements for Starting a Small Business

“The journey doesn’t end. It’s marked by milestones.”
-Michael Ventura

This holds true when you embark on the journey of establishing a small enterprise.

Remember, you’re not alone – as per the Small Business Administration, there are close to 31 million small enterprises in the United States alone – which implies there are approximately 31 million individuals like you, striving to set up a business!

How do we define a Small Business?

Before we delve into the basics of setting up a small enterprise, it’s crucial to comprehend what we mean by “small business.” The definition varies based on the industry and location, but the Small Business Administration characterizes a small business as one with less than 500 employees.

Here’s perhaps the most valuable insight in this entire article – I often say this and for a valid reason:

What individuals must comprehend is that “the objective of any enterprise is to offer a product or service that is so irresistible – that when your potential customers see it, they decide they must purchase it from you, so they can address their perceived issue.”

Comprehending What a Small Business Requires to Start – and How To Proceed

Initiating a business is a thrilling and rewarding experience, but it’s not for everyone. It demands a lot of effort, commitment, and resources.

People often inquire: “How many hours per week should I have to dedicate to building/starting my new small business?” and the response is somewhat stern:  The answer is “As many as possible, really.”

If you can’t find a way to work on your new business a minimum of 20 hours per week, I’m not sure it’s even worth starting. Ideally, 30-40 hours per week would be much better.

Where does one find the extra hours needed to begin a small business?

Your answer lies in something called “nights and weekends”. Start waking up a couple of hours earlier, or going to bed a couple of hours later. Those weekends are packed with family, chores, and friends, but carve out a couple of hours or so each day on weekends.  Now you’ve picked up an extra 20 hours hopefully.

With a bit of luck, you’ll start to see your progress and you’ll magically find additional time to work on the business because you’re so excited about it.

Understanding what a small business needs to start can help you evaluate whether entrepreneurship is right for you and increase your chances of success.

By understanding the essential components of starting a small business, you can create a solid plan and take the necessary steps to turn your idea into a reality.

The high level steps you’ll need to take are these we will dig into the additional details and sub-steps in other articles on StartABusiness.Center site:

  1. Identifying your business idea
  2. Developing a business plan
  3. Understanding legal requirements
  4. Securing funding
  5. Creating a marketing and branding strategy
  6. Setting up operations
  7. Managing your business effectively.

What’s Next?

  • In the following section, we’ll delve into the significance of having a robust business idea and factors to consider when choosing a business idea.

Your Business Idea!

One of the most critical components of starting a small business is having a robust business idea. Your business idea should be something you’re passionate about and that solves a problem or fulfills a need in the market.

When choosing a business idea, it’s essential to consider the following factors:

  • Market demand: Is there a demand for the product or service you’re offering?
  • Competition: Who are your competitors, and what makes your product or service unique?
  • Profitability: Can you make a profit from your business idea?
  • Skills and expertise: Do you have the necessary skills and expertise to bring your business idea to life?
  • Can this business idea meet your personal needs, financially and otherwise? If you want to make money, and it won’t help you make enough, then do you really have the right idea?

Business Plan: What they are good for, and what NOT to do with your business plan

Once you have a robust business idea, the next step is to develop a business plan. A business plan is a roadmap for your small business and outlines your goals, strategies, and how you’ll achieve them.

A business plan typically includes the following elements:

  • Executive summary: A brief overview of your business plan.
  • Company description: A description of your company, including its mission, vision, and values.
  • Market analysis: A detailed analysis of the market, including competitors, customers, and industry trends.
  • Products and services: A description of the products or services you’ll offer.
  • Marketing and sales: Your marketing and sales strategies, including how you’ll reach your target audience and generate revenue.
  • Financial projections: Your financial projections, including revenue, expenses, and profit and loss statements.

A business plan is essential for securing funding, attracting investors, and guiding your business’s growth and success.

What is a business plan good for?

A business plan is an excellent way for the founder to get in touch with all of the components that the business will need – and how it stacks up against the competition, what kind of financing will be needed, what sort of personnel or help will be needed, and what the forecast for profitability looks like just to mention a few things.

The business plan is normally the first time the founder actually puts down in writing what their actual plan is, what the business will do, how it will do it, etc to see exactly how feasible it really looks.  The business starts to become REAL once you write it all down in this format. Until you have done so, the business is just a concept in the ether.

I strongly encourage all founders to complete a mid-sized 10-12 page business plan, if not a longer form 20-30 page plan. Doing so is enormously beneficial to your understanding of where you are and what will be coming.

What not to do with a business plan

A business plan should not be considered an immutable concrete plan that you must stick to.

It should be considered a flexible document that will lead the way as you go down the path toward building your business – but you need to understand that it is likely some parts of your original plan will shift and change so be open to those changes should they present themselves.

What’s Next?

  • In the next section, we’ll delve into the legal requirements for starting a small business.

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