11 Jun, 2018

Opening a Business in Alabama

 

Starting a business is always exciting, but can also terrifying at times. Even for experienced entrepreneurs, the process can be challenging and quite difficult. Regardless of the type of business’s niche, there are a few important steps that every future business owner should take into consideration. But before we learn more details in that sense we should acknowledge the importance of location.

If you are an entrepreneur located in the state of Alabama, there are a few statistics that might interest you. When it comes to its economy, in 2015, it grew at an annual rate of 2.2% which was faster than the overall US growth rate of 1.9%. According to the U.S. Small Business Administration, in 2013 Alabama small businesses employed 765,293 people, or 47.7% of the private workforce, while in 2015 small businesses created 5,734 new jobs.

The most successful industries in the state of Alabama are retail, services, health care, construction, wholesale trade and manufacturing.

 

But is Alabama a good choice when it comes to starting a business? Well, although the living costs are quite low, this doesn’t put the state among the best states to start a business in. Factors that undermine it include poor productivity and poor startup activity. Also possessing the 5^th lowest GDP per capita in the United States, Alabama is definitely not an entrepreneur’s first choice.

 

However, if you are determined to start an enterprise that has a lot of potential you shouldn’t feel discouraged by forming it in Alabama. These are a few characteristics that make an individual excellent for entrepreneurship:

Persuasive – having the right attitude in front of your customers and employees may be a game-changer when it comes to the potential success of your business. Perseverance and ambition should also be traits that define you as a business owner.

Willing to take risks – lack of courage when it comes to starting a business can really get in the way of proper growth and development. Taking risks at the right time can have an immense impact on the future of your business.

Creative – Coming up with great ideas to solve different problems that your future business will face is essential. Creativity should a characteristic that an entrepreneur should always possess. Knowing how to take advantage of the right situations and circumstances also means that you are a creative person, who will most likely be able to be a successful business owner.

 

The first step in starting a business is to have a well-written checklist that should include the following:

·         A business plan that includes financial statements

·         Decide on a business structure (sole proprietorship, LLC, corporation or partnerships)

·         Make sure you have a reliable source of financing

·         Choose a great location

·         Hire the right team

·         Get necessary licenses and permits

·         Obtain a tax ID number

·         Open a business bank account

·         Arrange for utilities, telephone and other services

·         Get insurance

 

Before starting a business, the following areas should be considered:

·         Legality

·         Safety

·         Environmental impact

·         Market needs

·         Product visibility

·         Service

·         Competition

·         Feasibility

·         Marketing research

·         Profitability

·         Research and development

·         Investment costs

·         Development

·         Promotion

·         Price

·         Customer/User compatibility

·         Protection

·         Demand

 

Get the right experience

Informing yourself about the market and the niche is essential especially if you don’t have previous experience in the industry. Ask yourself if you have the necessary background or if you can assimilate all the needed information in order to succeed as a business owner. You can even try working for at least for a short while at a company that similar to your proposed business.

Another great idea is to read management and technical publications issued by the Small Business Administration in order to assist future entrepreneurs. Additionally, there is Guide to Government Contracting for Alabama Small Businesses that is meant to help small businesses in Alabama win government contracts.

 

How to write a business plan

A business plan will help you set clear objectives and foresee an exact trajectory. You will also be able to manage your business easier and measure your success. Last, but not least, a well-made business plan will help you obtain funds for forming your company, as banks usually analyze every detail (the nature of your business, the purpose and amount of your loan, the ability to repay the loan, your management skills).

All in all, the business plan should include:

·         An executive summary (which is usually a Brief Statement of the Business Plan Objectives)

·         The business

1.      Description of the business

2.      The target market

3.      Competitors

4.      Location

5.      Management

6.      Investment

·         The financial plan

·         Documents

 

Financing your future business

Putting the funds together to form a business can be quite challenging especially if you don’t have any substantial personal savings or don’t have wealthy friends and family willing to invest in your idea. But that’s no reason to feel discouraged. There have never been as many options as today.

Besides bank loans, lines of credit and business grants that can be a little difficult to obtain, there are some methods that could suit your future business perfectly:

Angel investors – are usually wealthy individuals who are interested in investing consistent capital in a great business idea, in exchange for convertible debt or ownership equity. You can find out more information by researching a few angel groups or angel networks.

 

Crowdfunding – it has gained a lot of popularity in the last 5 years. There are a lot of crowdfunding platforms where individuals can create campaigns either for businesses or different creative ideas and people all over the world can invest different sums of money. According to a worldwide estimate in 2015 over US$34 billion was raised by crowdfunding.

Some of the most popular platforms are Kickstarter, Indiegogo, Crowdfunder, RocketHub, Crowdrise and many more. For more information about how to create a crowdfunding campaign check out our recent article: http://successfulownership.com/posts/how-to-create-a-crowdfunding-campaign

 

Starting a business will be a great journey that may lead you to tremendous success if you know how to use the right tools. An excellent advice is to never stop learning by doing tons of research and improving the way you do business even after you prove to be successful. Always take advantage of the ever-changing technology that is booming in our era because it will help you more than you think. Using the right kind of advertising through technology can even save you money and help your brand become more popular.