What do you need to know to start a small business?

Small Business: What you need to know to start one?

Small businesses include companies with 500 or fewer employees, but "small" doesn't mean small. Small businesses make up 99.9% of all businesses in the United States, and there are an estimated 33 million single-owner businesses in the country.

If you dream of joining the ranks of small business owners, you're probably already spending a lot of time thinking about what kind of business to open. Before you decide, ask yourself the following questions. The answers to them will tell you if you're on the right track.

What are your interests and hobbies?

Evaluate your interests and hobbies. Is there anything you would do even if you weren't getting paid for it? Of course you need to make a living, but it's hard to stay passionate about something you don't love. Think about your natural talents and see if they can help you start a business.

Is there a demand in the market?

Do some market research to identify business opportunities, such as the demand for the product or service you want to sell. Is there an opportunity to grow your business by grabbing on to a new trend or niche?

Consider what skills are most in demand: can you fix electronics blindfolded, are you good with kids, can you write? Choosing a small business that matches your skills will automatically give you a competitive advantage.

How much are you willing to invest?

Starting a new business usually requires an initial investment. Think about your personal finances and the resources you have at your disposal. Do you have enough money to start your business or should you consider financing options? If you will need a loan to grow your business, how much debt can you afford?

An honest assessment of whether you're willing to go into a new business with debt will help you determine what kind of business you're most interested in. For example, buying a franchise can cost upwards of $100,000, while opening a cleaning service can cost an average of about $3,500.

How will you handle the workload?

Different businesses require different amounts of time, and some have irregular hours. For example, you might be a plumber. You might be called out at night or on a holiday weekend when someone's basement floods. If you need a clear schedule, keep this in mind when choosing the industry that best suits you.

Once you decide what you want to do, don't be afraid to ask for advice from a mentor or other entrepreneurs to avoid the pitfalls startups can face. The Small Business Administration (SBA) is a good place to start. The SBA has a program called SCORE that offers free mentoring through 300 offices nationwide and online video chat. Mentors are volunteers and have a wealth of experience.

Programs like SCORE can't promise you a million dollars in your bank account a year after you start your business, but they can give you a small boost to success. When you can choose a business that brings you joy, provides financial support, and meets the needs of others, it's a win-win situation.

Where to find like-minded people?

Having a business is important to have a community of like-minded people who will help and guide you in times of crisis and share their experience, so don't hesitate to make new acquaintances and ask those who already have experience and knowledge. Go to networking events, forums and trainings, be where there are businessmen of the same or higher level, so that you are always motivated to grow and find new solutions for your business.

Growth or profit?

Business growth is important for the company's well-being in the long run. Therefore, you need to identify and implement solid business growth strategies early on. Growth not only demonstrates your company's success, but also helps attract investors, funds, and talented employees.

Profit and growth go hand in hand when it comes to important areas of any company. In the growth stage of a small business, profits may be low, but growth rates are high. Although the company's profits may not be that high, a fast growth rate indicates that the company is on the road to profitability. This will help the company attract the attention of investors, which in turn will only accelerate the company's growth and its path to profitability. This once again proves that growth should be the top priority for small businesses and startups.

How to start a small business?

The best business growth strategies

There is no single business growth strategy, and the successful growth of a company depends on specific circumstances. Here are just a few small business development strategies that may interest you.

Market Penetration

Market penetration is a strategy aimed at increasing market share. This can be achieved in a number of ways, particularly through discounting a product or service, increasing the amount of advertising, or creating package deals. This helps to gain an edge over competitors and attract new customers without having to create a new product.

Market Expansion

This strategy involves entering new markets. For example, if a bakery adds corporate catering to its services, it is tapping into a new type of business in this area. This strategy is popular among many companies, even those that are already well-established. A successful business is always looking to evolve and grow, so even if you are quite comfortable in your current market, you should always be looking for new opportunities and ways to increase your profits.

Switch to new channels

Omnichannelization is the modern approach to marketing and sales. If you rely only on physical locations to make sales, your business may grow at a much slower rate than competitors who have opted for omnichannel. Utilize as many channels as possible for customers to find and interact with your company. A modern company should have an online store, social media channels, email channels and, if available, retail stores. In addition, the physical point of sale should not just be a store, but an extension of all other channels. This means you can't offer a product or service in an online store that you can't offer in a regular store. If you're exclusively online and don't know what direction to take next, consider setting up temporary outlets or selling through local stores.

Segment your market

Analyze your current customers and try to double down on the target group you want to interact with the most. Choices can be based on customer location, age, habits, or the industry you serve. Analysis and metrics are crucial in this area. Gaining insights and quick access to data is key, as it gives you a real insight into your business and where to put your energy. For example, if you operate in a city with a large student population, but aren't attracting as many students as you had hoped, try offering a student discount. Similarly, if your point of sale is located in a high-traffic location that regularly uses local transportation, consider something like a loyalty card to attract potential customers and keep their attention in the long run.

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