Many aspiring business owners fall into the trap of trying to create a big and robust business plan. This is only a requirement if one is seeking investment or financing. Small business owners should start by testing out their ideas to determine if they are viable before going ahead and investing tons of money and time on it. So to get started one needs to:
– Define the vision. What will be the end result?
– Define the mission. This should explain the reason for your company’s existence.
– Define your objectives. What are the goals that will lead to the accomplishment of the vision and mission?
– Outline the basic strategies. How do you intend to achieve the objectives set out?
– Write a simple course of action. Start with the small task oriented actions required to set the objectives in motion.
This will be shorter than a full business plan, which may take weeks to write, but it will get things into action.
2. Decide on a budget.
Despite the fact that one needs to keep costs low, one needs to work on a budget to determine how much they will be able to spend. One should be realistic with the budget, especially if they are self-funding. One’s burn rate is how much money that is being spent each month. This is an important figure as it helps one determine the amount of month’s they can stay in business without turning a profit. One should set up a business with profitability in mind within the first thirty to ninety days. It is achievable. One should also have a budget reserve to keep them going in case things take longer than expected.
3. Decide on a legal entity.
Filing paperwork to start a business is costly. One needs to account for licensing, either from the municipality or city, state incorporation or business entity fee. Research is necessary before starting the business to determine how much will be needed to cover these costs. In the business test phase one should consider starting as a sole proprietor, this ensures less paperwork and upfront expenses. This can also help one save cash as they determine the viability of the business. After this, one can file for a business entity after determining that the business is viable and sustainable within the first couple of months.
4. Take care of the money.
It is important for one to keep business accounts separate from personal accounts. It is quite easy to set up a business checking account with the local bank or credit union. All that is required is sole proprietor licensing information and an initial deposit to set up the account. It is important not to get into any credit lines yet, but to remember this is a basic holding account to keep money separate from personal accounts.
5. Get a website.
Regardless of the type of business, one will need a website, which means securing a URL. Popular domain sites allow one to search for a website domain address of their choice and buy it for as little as $9.99. If the business is online, one can tie the website to an online shopping cart and store front like Shopify for a low monthly fee. One also has the option of building a basic website for themselves using website builders found online.
6. Test sales.
With that as a foundation, one can start testing some sales. One has to try and spread the word in an inexpensive and creative way. If the business is service based, one should get involved with a local small business chapter or chamber of commerce and get information on what resources are available to speak, present or share knowledge about your business. If the business is product based, one can test product viability at local swap meets, farmers markets or community events. This helps gauge the community’s reaction towards your product. An aspiring small business owner can also drive traffic towards the site through the use of simple ads on social media pages like Facebook and twitter.
This is a great way of testing the viability of a small business without putting a lot of money and time into it.
Featured Image: DepositPhotos/ peshkova
