Small Business 101 – The Basics of Starting Your Small Business

Small business ownership offers entrepreneurs the opportunity to be their own boss and excel at their craft. After you have verified the demand for your idea, implement the following steps on your path to small business success.

A business plan records the details about your company, serves as an aid during funding solicitations and prevents failure due to lack of planning. In your business plan, explain details related to the production, sale and profit margin of your small business venture. Include financing sources, the expected customer demographic and marketing strategies. Consult a business mentor or local Small Business Association for further assistance in writing a complete plan for your specific business.

Solicit funding in advance of opening your new business. Use personal savings or ask friends and family to invest. Obtain a business loan from your bank or credit union. Ask your mentors and local investors for cash. Use your financial resources to purchase supplies and materials, pay for advertising and give yourself a paycheck.

Obtain applicable licenses from the state and local governments. File a fictitious name application, and obtain a federal tax number. Contact the local Small Business Association to determine other licensing requirements for your state and your specific business.

Organize your company as a sole proprietorship or a corporation. Both options carry tax and legal advantages, and your accountant can advise you on the best choice. Establish adequate insurance and payroll for any employees you decide to hire.

Choose a location for your office. Purchase a building if funds allow or rent a space. Investigate the possibilities of shared space or working from home.

Purchase or repurpose office furniture and supplies. To start, your small business only needs a telephone, voicemail, fax, computer, filing cabinet and basic office supplies. As the business grows, expand the technology or upgrade the equipment.

Invest in adequate advertising. Consider distributing business cards or flyers, and hang posters or a banner to advertise your business. A website can be relatively inexpensive if you barter services with a web designer. Draw traffic to your small business by claiming profiles on free online directories.

Invest in an insurance policy that covers loss, theft or damage to supplies and equipment. Add insurance for the building if you own it or if specified by the lease.

Plan your business carefully and thoroughly. Write a business plan, secure funding, obtain licenses and purchase advertising. Consult with professional mentors for additional ideas, and confidently start your business.

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