6 Steps Plan to Start a Small Business
A small big company always starts as an idea, but you have to transform that concept into action. That is where many people can begin to feel overwhelmed. It is understandable to freeze in the face of the avalanche of things that need to be done to start a business , but in reality it is easier than you think.
Like any big goal, if you start by dividing it into smaller tasks, you will be able to tackle enough actions needed to get started. Here are six ways to break down the process and simplify the start of your own small business.
1. Write a one-page business plan
The key to a successful small business, especially in the startup phase, is to keep things simple and costs low. This not only means your monetary costs, but also your time.
Many potential small business owners fall into the trap of trying to create the largest and most solid business plan in the world. You will only need something more robust if you are looking for investment or financing, and even if you want to get any of those things in the future, I always recommend that small business owners start testing their ideas before investing a lot of time and money (own and alien).
So, to begin with, create your own one-page business plan that is a high-level overview of the small business you’re about to start.
- Define your vision What will be the final result of your business?
- Define your mission Unlike a vision, your mission should explain the reason why your company exists.
- Define your goals What are you going to do, what are your goals, which will lead you to the fulfillment of your mission and your vision?
- Scheme of your basic strategies. How are you going to achieve the goals you just set?
- Write a simple action plan. Write down the actions oriented to smaller tasks that are required to achieve your established objectives.
That is all. It may be longer than a page, but it will surely be more organized and shorter than a complete business plan, which could take weeks to write.
If you need more information about the business plan of a page, or if you want to write a business plan focused on finances, you can consult the book that I co-wrote with my brother that has a solid explanation of both: Small Business, Big Vision: Lessons on How to Dominate Your Market From Self-Made Entrepreneurs Who did it Right.
2. Determine a budget
While I recommend that you keep your costs as low as possible, you should still determine a budget and know how much you can spend to start trading. If you are self-financing, you must be realistic with the numbers and the expenses you anticipate. I discovered that saving an additional 20 percent for unforeseen expenses is a realistic surplus amount to keep a company afloat in what you start selling.
This is known as burn rate , and it is the amount of cash you are spending every month with the operation of your business. It is an important number that you should know to know how long you can remain operating your company in what you get a real gain.
You must configure your business taking into account the profitability of the first 30 to 90 days. But have a budget reserve so you can survive if things go slower than expected.
3. Choose a legal entity
The mercantile companies refer to a legal person whose purpose is to perform acts of commerce subject to commercial law. There are six types of mercantile companies, from the Company in the collective name, to the cooperative.
4. Take care of the money
Regardless of the business entity you decide to establish, the first thing you should do is separate the funds from your business from your personal accounts. This is a big mistake that makes taxes and finances so confusing.
NEVER mix your family’s money with your business’s money.
5. Build your website
Regardless of whether your business is a traditional model or online, you will need a website, and that means setting aside a URL. Popular domain sites like HostGator and GoDaddy will allow you to search for the domain address of the website of your choice.
If you are starting an online business, you can link your domain to an online shopping cart such as Shopify for a low monthly fee, or you can create a basic website yourself with tools like WordPress or Wix.
6. Make sales tests
Since you have a sufficient base, you can start to try some sales. Try to spread your offer cheaply and creatively.
If you have a service-based business, connect immediately with your local chamber of commerce and ask what resources are available to speak, present or share information about your business. If you have a product-based business, test the viability of your offer at local exchange meetings, farmers’ markets or other community events to see what the public really thinks (and if they would buy) of your products.
Direct traffic to your website through simple Facebook ads with limited budgets or set up a basic Google AdWords account.
You can follow these six steps for yourself with little money. It is a fantastic way to test the viability of your small business before devoting all your time and money to an unproven idea.