VIEWPOINT: How to get your small business running
Starting a business can be one of the most exciting and fulfilling experiences in life. It can also be one of the most daunting.
There will be challenges along the way, pitfalls you’ll want to avoid. It’s easy for eager entrepreneurs to make mistakes when it’s their first time starting a business, and they’re not carefully considering all their options. You need a great support system and thoughtful guidance along your journey.
As you consider how to get started, here are six tips — what to do and what to not do — to put you on the path to success.
3 things to do
Conduct market research
There’s so much excitement that comes from that eureka moment, the instant you know what your next big idea is. Then comes the hard part: Understanding the intricacies of the problem you’re solving for a potential customer, who that potential customer is, and what the market looks like.
Research your competitors — their strengths and weaknesses — and how your product or service will differentiate from theirs. Evaluate the size of the market and determine how much of it is accessible to you. Stay on top of industry trends and understand the local and global business climate. This will help you to make informed decisions that will set your business apart.
Write a business plan
Your business plan is your roadmap. It outlines your mission, goals, strategies, and tactics for success. Writing a business plan will help you gain a better understanding of how your business should operate. The insights you glean and the help you get crafting a business plan can lead to important relationships and resources. A well-written business plan shows potential investors you are serious and have a solid plan for growth.
Identify funding sources
Any funding option you choose will rely on your personal credit to start, an important consideration as you create business credit. Family and friends may want first dibs on funding your business as a way of showing their support.
U.S. Small Business Administration (SBA) programs can be a great start. Many entrepreneurs are misguided to believe they need to be up and running for two years to qualify, but that’s not true. Another misconception is that all banks are alike — there’s no blacklist among them. If you get turned down from capital at one bank, ask for feedback and try somewhere else because you may qualify there.
Be sure to explore incubators and accelerators that provide funding and guidance to entrepreneurs. Determine if you are open to debt or equity financing, crowdfunding, or pitch competitions — all are viable funding options that have a range of benefits and drawbacks.
Research grant opportunities that are specific to your industry and situation. Having a clear understanding of your funding options will help you make informed decisions about how to finance your business.
It can be easy to get overwhelmed by all there is to do in starting your business. You want to get everything right, control each aspect to your own liking, and chart a positive course. Sometimes finding success is about the decisions you don’t make.
3 things not to do
Don’t quit your day job just yet
Despite the commitment you’re making as an entrepreneur, do not quit your day job until you have a proven business model. Starting a business takes time and money, and you need to have a clear understanding of your potential revenue streams before you discount your current income source. Speak with others who have successfully run similar businesses and learn from their experiences. Develop a plan for how you will manage your finances during the startup phase and be prepared for the possibility that your business may not generate revenue for some time.
Don’t build for a small audience
Starting a business based solely on your personal preferences or the preferences of your family and friends is not a sound strategy. You need to build a business that solves a shared problem that many people have. This will ensure that you have a larger audience that will continue to buy your product or service. Focus on identifying a real problem and providing a solution that meets that need.
Don’t go it alone
There’s so much work that goes into constructing a successful business. Seek out experienced mentors who can offer guidance and support. Join business networks and organizations that provide resources and connections to other entrepreneurs. There are plenty of people and organizations that can help you build and grow your business. By leveraging the knowledge and expertise of others, you will be better equipped to handle the challenges you’ll face.
Careful planning and execution are required to make your business a success. Your journey will likely be a roller coaster of ups and downs, but by understanding some common experiences you can be better prepared for what’s coming. Don’t be afraid to take that next step as an entrepreneur and write the first chapter of your business story.
Pablo Velazquez serves as the M&T Bank’s business banking team leader for Delaware.
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