We are a country of dreamers. Great ideas (and lots of not so great ideas) are abundant. Have you ever watched an episode of Shark Tank? So how many of these “great ideas” actually succeed as a business in the long-run? Not many. In fact, only one out of every 10 startups will succeed. That number is bleak and could be discouraging to some bright entrepreneurs, but it’s important to know the statistics and learn from other people’s failures. And while 90% of businesses fail for a whole spectrum of reasons out of their control, we’ve compiled some simple steps to launch a small business to get your closer to that successful 10%.
Write a one-page business plan.
Unless you’re seeking investors or financing, a simple one-page aerial shot of your business will do. This should include your vision, your mission, your objectives, basic strategies, and a simple action plan. That’s it. It might be a little longer than one-page, but truly answering these questions is half the battle. You’d be surprised how many businesses flop because they fail to root themselves in a mission statement.
Decide on a budget.
While it’s important to keep costs low in the beginning, you will need to spend some money to make money. Decide what that number is for you. Then, aim to start earning a profit in the first 30 to 90 days. Keep in mind that it’ll likely end up being 20 percent more for incidentals and overages.
Decide on a business entity.
This is where some legal counsel can be of service. Whether you are a sole proprietor, LLC, S Corp, or C Corp, we can walk you through the pros and cons of each entity. Then, we can decide what makes sense for your startup and for your short- and long-term goals. Filing this paperwork in your state costs money, and depending on where you live, it can sometimes be a lot of money. Do some research to determine the fees involved.
Find a place for the money.
Whatever entity you decide on, always keep your business funds separate from your personal funds. Not only is this just wise as a small business owner, but it keeps tax time and your finances less confusing. You don’t have to open accounts or have a credit line just yet; just find a logical holding place for your money to keep the lines less blurred.
Get your website.
In this day and age, securing a URL is definitely one of the necessary first steps. You might even consider doing this while brainstorming business names. Purchasing the domain address can cost as little $9.99. If you’re an online shop, you can easily link it to an online shopping cart and storefront for pretty low maintenance fees. If you are looking to become a brick and mortar, your expenses will obviously be there.
Over the next 30 to 90 days is where the rubber meets the road. Don’t get overwhelmed in the “launch,” but do find some creative and inexpensive ways to spread the word of your new business venture. Consider Facebook ads or set up a simple Google AdWords account to test if traffic is going to your site (both with daily capped budgets). However, don’t put all of your eggs in the online basket. Depending on what you’re selling, consider joining your local chamber of commerce, attend networking events, sign-up for farmer’s markets and other community events to see what buyers think of you and your product.
In the beginning, these six steps may take some time and brain power (and can seem tedious to enthusiastic entrepreneurs), but fortunately they don’t require a lot of upfront money and come with a very high ROI. It’s a fantastic way to test the viability of your small business before throwing all your blood, sweat, and tears into an unproven idea.