08 Sep, 2017

Starting Your Own Small Business

There are many reasons that would make someone want to start their own business. Some of these include: the need to be your own boss(independence),having a talent that you want to exploit e g if you are good at making crafts, the need for an extra income, lack of alternative work/ formal employment etc. There are some points that someone needs to consider before opening a small business: Decide what product or service you would like to sell- while this may sound obvious, study after study proves that it is much easier to succeed when dealing in a product that one has a passion for and understands well. It is therefore advisable to deal with a product/service that reinforces your strengths. For instance you should not start a music tutoring service if you have only average skills playing the piano. Instead you might do better at golf if you are a pro at it. Determine the location of your business- the location of your business is mainly determined by the availability of the target client in that particular area as well as the type of business that you intend to start e g a senior care medical facility would ideally be situated in a quiet neighborhood while the ideal location for a car wash business would be a busy street. Determine the sources of funds/capital for your business- small businesses generally do not require much capital to start. In some cases, your personal savings might suffice. Online businesses that are home based might only require a PC and an internet connection and possibly a couple of hundred bucks for subscription fees. However if you need to expand your business in the future, you need to consider other sources of capital. Additional sources of funding are SBA (Small Business Administration) backed loans, bank loans, funds from venture capitalists (especially if you have a unique idea with potential for good returns), loans from friends etc. Bank loans tend to have more competitive rates than other types of loans. Get the necessary legal documentation in place- The legal documentation such as business permits and licenses required will vary according to the type of business you intend to start and also the state you operate in. Identify your suppliers and establish a good business relation with them. You might need to consult other people with similar businesses for advice. Establish your financial structures such as your method of payment for your suppliers, credit limits for your customers, tax returns filing etc.