5 Secrets to Small Business Success
Are the perks of being one of the 30.2 million small business owners in the United States too good to pass up?
You can be your own boss, set your own hours, and increase your earnings. But the rewards come with risk, and success often takes years. The first step is listening to the right advice, so here are five tips to help you get started:
Develop a Business Plan
As you might expect, starting a small business will require a lot of time, money, and hard work. But you can use that time and money more efficiently with proper planning. A business plan can help you set goals and develop a strategy to achieve those goals. Typically, business owners set goals for the first three to five years of operation. Just remember that things don’t always go according to plan, so you should be prepared to adjust your plans along the way. Your plan should include a description of your business, an overview of your products/services, research about the marketplace, sales and marketing strategy, organizational structure, and financial data and projections. These are also good ideas to consider when developing an online presence.
Assemble a Team of Trusted Advisors
First, find a good business mentor to provide you with honest and unbiased advice. Look for someone who has been successful in the same or related industry. Share your business plan with him or her. Experience in the industry is a powerful advantage when you present your business plans. Next, look for an attorney who can help set up a corporation and complete all the necessary legal documents to protect yourself and your new company. Also, consider hiring an accountant to help you understand and set up your chart of accounts and file the financial statements specific to your industry.
Secure Adequate Capital
Your new business is likely to experience slow sales months in the beginning. How will you handle expenses during these slow periods? How will you pay for equipment and the lease? You may be able to secure business financing, such as a loan or line of credit, to help you cover income fluctuations, meet customer demands, or manage unexpected expenses. Remember that your lender wants to see you are committed to the business and have shouldered a significant amount of the financial startup costs. As a result, start-up loans will often require you to have experience and demonstrate that you have invested 30-50% of the initial costs in your business venture. Other opportunities may be available to you; such as personal assets that can be used as collateral, a home equity loan or other personal financing. Even if you never need to use it, having this money available in case of an emergency is good insurance and will provide you with peace of mind.
Take Care of Your Money
Regardless of what the business entity is, keep your business funds and personal accounts separate. In addition to streamlining your finances, separate accounts and bookkeeping make it easier to take full advantage of tax breaks. From home office space and office supplies to miles driven, you can write off business-related expenses. Start by opening a business checking account–just bring in your business documentation, and we’ll take care of the rest.
Prepare to Make Sacrifices
As most business owners have discovered, success does not come without sacrifice. Expect to work long hours, live on less income, and deal with uncertainty. Even the most well-prepared and well-disciplined small business owners face adversity. The key is getting up more times than you fall down and keep moving forward with the belief that your success will be worth the sacrifice.
Our Business Banking Services can be a great resource.
All materials contained herein are for general informational purposes only and do not constitute tax or legal advice.