You’ve got a great small business idea, one that is sure to be a success. You probably can’t wait to get started. However, you might want to slow down just a bit.
Enthusiasm is important when launching a small business, but you also need to be practical. There are many things to consider before you can serve your first customer. This planning might seem like it’s getting in the way of your brilliant idea, but it will help create a solid foundation for your small business to start from.
Here are five tips for starting a successful small business:
1. Write a business plan with room to grow
A business plan is a written document that helps define your business goals and how you will achieve them. It is a roadmap that helps keep you on track in all aspects of your business, including finances, operations, and marketing.
When you first sit down to write a business plan, it may help to think of the big picture. A simple outline might be enough to get you started. Then, as you get closer to opening day, you can start to fill in more details as they are worked out.
It might also be helpful to think of your business plan as a living document. It should grow and change as your business grows and changes. You may need to revise parts every year or create a whole new plan in the future.
2. Understand your target customers and the market
Your business idea may be great, but you might be in the wrong area to launch it. An idea that works well in a densely populated neighborhood may not have enough customers to support it in a more rural setting. Understanding the market and your target customers could help you match your idea to the perfect location.
Get to know the market by researching your industry and the area where you want to start your business. Is there a need for the product or service you are offering? What do your competitors look like? How can you do the job better than them? Creating customer personas—fictional representations of your ideal customers—can help you figure out who you will be selling to.
3. Protect your dream with business insurance
Many new small business owners put off getting insurance because it’s “too hard” or “too complicated”. Business insurance can provide a safety net to help protect what you are building. Regardless of how motivated or knowledgeable you are about getting coverage, you may eventually need to tick different policies off your list.
There are many types of business insurance available to small business owners. Some common policies may even be required to do business:
- Workers’ Compensation insurance provides protection for employers if an employee suffers a work-related illness or injury. It is mandatory for most businesses in every state (except Texas).
- Professional Liability, otherwise known as E&O insurance, protects your business against claims of negligence, misrepresentation or mistake, as well as document or paperwork errors. It may be required by professional associations in order to acquire and renew certain licenses.
- General Liability insurance protects businesses against the risk of customer injury and property damage. Commercial landlords and other businesses may require it to rent their premises or work with them.
An insurance agent can help you understand the small business insurance requirements in your area.
4. Know when to ask for help
When you are starting a small business, you may feel pressure to do everything yourself. It can be hard to hand over part of your “baby” over to someone else, or you may feel like you can’t afford it. However, knowing when to ask for help could help save your sanity and money.
It’s rare for a small business owner to know everything about starting, running, and growing a business. Like anyone, you have strengths and weaknesses when it comes to your skillset. Learning a new skill is great, but you may not have the time or ability to learn everything it takes to run a business.
Hiring or asking professionals for assistance could help you avoid expensive mistakes down the track. This might include hiring an accountant to file business taxes, talking to an insurance agent about small business insurance requirements, or having a lawyer on retainer to review contracts.
5. Never stop trying new things
Business is all about innovation, no matter what industry you’re in. Even if business is booming, there might be something new out there that could bring you even more success. This could be a new technology that streamlines part of your work, a new advertising campaign that brings in customers, or identifying a new way you can help your current clients.
The point is—don’t fall into a rut! Take time to regularly review your business plan, the market, your customers, and how your business is performing. There may be an opportunity waiting for you to try.
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