5 Things to Know Before Starting a Small Business

5 Things to Know Before Starting a Small Business

One of the few easy parts about starting a small business is finding advice on how to go about doing so. If you’re lucky and you know veteran business owners, their knowledge is perhaps your best resource.

If not, you always have Google.

And you have this blog, too!

Here is a list of things you should know before starting a small business:

  1. Know Why You Are Doing It

Is it because you’ve always wanted to start a business?

Is it because you need the money?

Will it be full-time or part-time?

Usually, a business will suck up more time, effort, and resources than you initially thought.

So, if your reason for starting a small business doesn’t commit you 100% to the venture, it may be best not to go ahead.

There is no overall wrong reason to start a small business, but there are case-specific scenarios where perhaps it’s not a great idea. In other words, you really have to know yourself, your limits, and your level of commitment to figure out if you can really afford (and not just financially) to start a business.

  1. Have a Business Plan, but Don’t be Afraid to be Flexible

“Remember: once you’re in the trenches, it is harder to look objectively because you’re focused on the business and what’s happening there and now. Having a business plan allows you to step back and see if things are going the way you want them to and analyze objectively.”

Now, having said that, you must also be flexible.

Things will inevitably change, and veteran business owners know the value of being able to adapt to changes and still direct your efforts towards your goals.

Now, having said that…

  1. Plan for Financing

If you’re taking a loan, paying it back is obviously a priority, but it may take some time to be profitable.

So, whether it’s having enough for 6 months of operation, taking out a loan, or internal financing, choosing the right financing option is paramount to planning your business.

A large part of this planning is deciding your lease. There’s always tension between choosing a long term or short term lease. Long term usually means lower rates, but you’re in it for that amount of time, no matter what.

If you are a brand new business, you’ll probably have to personally guarantee a lease, which is understandable, but you have to realize that it’s a personal risk.

So, make sure you take the time to plan every aspect of finances from rent to equipment to projected profitability ahead of time. It is also always worth having extra money available in case you have an emergency or any other type of costly situation.

  1. Find the right partners

Small businesses are definitely more work than you think, so it’s always good to have more than one person. Different perspectives, backgrounds, and expertise make for a better overall team.

Sometimes, the person who has the skills to deal with the city is entirely different from the one who deals with the customers or the one who deals with the business’ finances, and that’s fine.

The key to finding the right partner is thinking about what you are good at and what you are not. Look for a person who fills in the holes that are missing in your skill set so you can focus on your strengths and your partner can concentrate on your weaknesses, and vice-versa.

  1. Gain the support of your neighbors

Your neighbors are extremely important, and not just your commercial neighbors but also your residential neighbors. In the end, the city works for the people, and if you do not have the support of your community, your business will not survive.

For example, any time you are brought before the city, one of the first things they will ask is if you have the support of your community.

This support can make or break your business, as residents can block things you want to do like open an hour later or acquire a liquor license, etc.

You can gain support of your community in several ways, like holding contests that capture the community characteristics, claims-to-fame, or eccentricities, for example.

On that note, you should join a local business organization. There are several out there, and they exist to help you!

Zohaib Akhlaq
He is the founder of HowEntrepreneur.com where he teach entrepreneurs and startup owners something new daily.
Zohaib Akhlaq

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