Thinking of starting your own business?
Somewhere between scribbling your idea on a cocktail napkin and actually starting a business, there's a process you can follow to improve your chances of success.
Know yourself: Be sure you are ready to start a business. You need to plan, set goals, and above all, know yourself. What are your strengths? What are your weaknesses? How will these affect day-to-day operations? As you get started, your business will likely dominate your life so make sure that what you’re doing is stimulating and challenging, but not completely outside of your expertise. You’re going to be in it for the long-haul.
Know why small businesses fail: Thousands of businesses are both started and shut down yearly. While everyone starts out because of the prospect of building a successful business, 25% of those businesses that start up won’t make it past the first year. 50% of businesses fail within their first 5 years, and 75% fail within their first 10 years. Learn from others’ mistakes so you don’t make the same ones.
Validate your idea: Read these 8 tips to help you determine the probability of your idea succeeding.
Inventory your market: To determine how attractive your prospective market really is, conduct a market analysis. Doing this will help you learn your potential customers, their buying and shopping habits, their numbers, how much they are willing to spend, your competition, and their challenges and successes.
Inventory your industry: Everything in your industry that happens outside of your business will affect your company. The more you know about your industry, the more advantage and protection you will have.
High-level Business Plan: You’ll use your business plan to convince people that working with you — or investing in your company — is a smart choice. A traditional plan contains sections such as: an executive summary, a company overview, information about your products and/or services, your market analysis, list of major company milestones, information about each member of the management team and their role in the company, and details of your company’s financial plan
Marketing Plan: Your marketing plan helps you identify the marketing activities that have the highest return on investment. It can often be the difference between a small business that thrives and one that flounders. An effective marketing plan contains sections such as: how your marketing supports your business goals, mission statement, target market, competition, your unique selling proposition, pricing, promotional plans, marketing budget, and actions to attain marketing goals.
Sales Plan: A sales plan is closely tied to your business plan and marketing plan and should contain long-term and short-term objectives. A typical sales plan contains sections such as: target customers, revenue targets, strategies and tactics, pricing and promotions, deadlines and DRIs (Directly Responsible Individuals), team structure, and resources.
Funding your business: Your business plans will help you determine how much money you’ll need to start your business. If you don’t have that amount on hand, you’ll need to either raise or borrow the capital. Fortunately, there are a multitude of ways to find the capital you need.
Pick your business location: Choosing your business location is one of the most important decisions you’ll make. Whether you’re setting up a brick-and-mortar business, launching an online store, or doing a combination of both, the choices you make can affect your taxes, legal requirements, and revenue.
Choose a business structure: The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability.
Choose and register your business name: It’s not easy to pick the perfect name. You’ll want one that reflects your brand and captures your spirit. You’ll also want to make sure your business name isn’t already being used by someone else.
Register your business: Once you’ve picked your business name, it’s time to make it legal and protect your brand. If you’re doing business under a name different than your own, you’ll need to register with the federal government and maybe your state government, too.
Apply for licenses and permits: Keep your business running smoothly by staying legally compliant. The licenses and permits you need for your business will vary by industry, state, location, and other factors.
Open a business bank account: A small business checking account can help you handle legal, tax, and day-to-day issues. The good news is it’s easy to set one up if you have the right registrations and paperwork ready.
Collider supports our local entrepreneurs and small businesses with 1:1 ecosystem navigation, education, space, and storytelling to help foster an inclusive, diverse, and healthy entrepreneurial ecosystem.
Southeast Minnesota SCORE offers FREE business mentoring, low-cost or no-cost business training, and numerous templates and tools to help you start or grow a business.
Rochester Economic Development, Inc. (RAEDI) assists existing and potential businesses in the Rochester area secure the private and public resources needed to execute their growth plans.
Small Business Development Center offers at no cost, confidential consulting to help businesses in SE Minnesota identify, understand and overcome the challenges of starting a business, running a successful business, and developing exit strategies.