6 things to think about before starting a small business

March 26, 2012

If you’ve been mulling over the idea of starting a new business in the New Year, now is your time to get started! Before you dive head first into getting up and running, learn about these six must know tips before starting a small business in 2015.

It doesn’t matter what kind of small business you’re thinking of starting – there are a few essential steps you need to follow before taking the leap.

1. Determine if there is a market for your small business idea Everyone who wants to start a small business thinks they have a great idea. But there’s a big difference between thinking it and knowing it. The first question to answer is: If it’s such a great idea, why hasn’t somebody else thought of it already? You need to ask yourself some basic questions: Do people want what you’re offering? Is there space in the existing market? Who’s your ideal customer? You need to be confident you’ve got the answers before even considering setting up your small business. Many start-ups fail because they couldn’t carve out a niche in the existing market or their target audience simply didn’t exist.

2. Make an actionable year-long plan to accomplish In the beginning of the New Year, you have the opportunity to plan how you will want to executive your small business idea for the next 365 days. First, your small business plan should answer all the questions listed above. Second, know how much money you’ll need to start up your business and where it will come from. Your plan should set out what your product will cost, how many you’re likely to be able to sell in the first year and what your expenses will be. Then set some longer-term targets for you to navigate towards. Don’t forget to update it regularly – there’s no point in having a business plan that’s outdated. Be mindful – once you get the ball rolling, you may have to consider refocusing your goals in order for them to be achievable and realistic.

3. Be flexible with your small business plan Once your new business idea starts to turn into a reality, it is essential to understand you’re your concepts may begin to morph. Instead of fighting this in order to keep your original idea intact, be flexible and understand why and how potential changes may be necessary. Don’t be afraid to tear up your business plan and rewrite it in light of your market experience.

4. Get your small business protected Once you’re sure your business idea is a potential winner, think about what could prevent it from succeeding. Look for a small business liability insurance policy that suits your needs. Also no start-up should be without general liability insurance and professional liability insurance coverage. Many aspects of starting up a business are uncertain, but by insuring it properly you can concentrate on making it a success.

5. Know that friendship and business rarely mix You may have made it loud and clear to your friends that your New Year’s resolution is to start a small business, and some of them may be really interested in joining this journey with you. However, don’t feel pressured to do so. Friends will understand and support you, but you don’t have to go into business with them. You want a business partner who’s your opposite, who thinks differently, has different skills and a different outlook. You want someone who’ll challenge you, rather than agreeing with you. It might be infuriating and uncomfortable, but your business will benefit from the creative tension.

6. Clearly define what you want from your business Starting the New Year on the right foot with your small business is vital to its success. Right from the beginning, you need to be clear in your mind as to what you want from the business. Do you want to build it up and pass it on to your kids? Or do you want to sell it and move on to something else within a few years? These questions will alter how you set your business up in the first place, your strategy for it and how you run it.

Tell us! What industry are you planning on starting a small business for in 2015?