So you want to be an entrepreneur in 2016?
You are not alone in this goal. According to the SBA, the small-business sector continues to grow. The number of small businesses in the United States has increased 49 percent since 1982. Since 1990, as big business eliminated four million jobs, small businesses added eight million new jobs. But taking that leap requires some planning. Here are some tips to help you understand where you are in the startup process.
Consider your personal life
Starting a business takes more than a great idea — it takes time, commitment, and energy. Before you get started, ask yourself several questions, including why you want to start a business and how it may affect you and your loved ones, especially if your family will be involved. It also helps to look at your past experience: Are there any skill gaps you need to fill before you begin running a business? Also, make sure you have a support system in place: advisers, an attorney, an accountant, and a good relationship with your bank can be helpful when establishing a business.
Figure out the basics
Crossing these steps off your business startup checklist will put you one step closer to turning your idea into a reality:
- Name and type of location: Choose a name that’s available, and decide if you want to conduct business in a physical or virtual space. Also, think about any permits you may need or any copyrights you may have to work around.
- Products and services: Consider how will you price your product or service. While your product may be unique, researching similar products and services already on the market will help.
- Competition: Evaluate your competitors and their customers. Knowing the competitive marketplace can help refine your business strategy.
- Marketing: Determine how you’ll reach potential customers and market your products . Consider the value of creating an online presence like a website or social media profile.
Next, begin working on a business plan — it will help you estimate the cost of starting your business and do financial projections. Also, research as many sources of startup funding as possible and choose the ones that fit your financial needs and circumstances.
Analyze your finances
Taking a close look at your financial situation before you start a business is crucial to long-term success. You’ll also need your financial information to be clear and concise when talking to potential lenders and investors. Order a copy of your personal credit report and score to see what potential lenders will see. It’s also a good idea to determine exactly how much credit your business will need and what those funds will be used for. And, above all, get a clear sense of whether you can afford to quit your current job or reduce your hours, and if you have enough money to live on for a few months after starting the business.
If you begin the startup process by addressing some of these key points, you’ll make a smooth transition into your new role as a business owner, and you’ll ensure long-term success for your business in the future.
For more education tips, visit WellsFargo.com.