Small Business
Business INSIGHTS e-News for Professional Services
What Do You Really Need to Start a Business?

If you're thinking about launching your own company, you'll need these three key ingredients.

Venturing out on your own - whether to continue in your current profession or try something entirely different - can be both exciting and frightening. With only seven out of 10 new businesses surviving two years or more, according to the Small Business Administration (SBA), it's important to make sure you're properly prepared to take the leap.

Time
Being your own boss often means trading in your 9-to-5 grind for an even longer workday. Before starting a business, assess whether your lifestyle can support the time commitment. Consult your spouse, your friends and your family to be sure they'll support your focus on the business, especially during the startup phase.

Money 
Although you can start some home-based businesses on a shoestring, the median startup capital for a new business is between $25,000 and $50,000, the SBA reports. Allocate a portion of this budget to marketing and advertising. Even if you plan to use low-cost social media to get the word out, you'll still likely need website design services and business cards.

Starting a business is like remodeling your home. It almost always costs more than you anticipate. During the startup phase, when you may feel flush with cash from savings or loans, it's easy to overspend. Keep overhead as low as possible during startup and be as miserly as makes good business sense.

A Plan 
When Benjamin Franklin said, "By failing to prepare, you are preparing to fail," he could have been talking about starting a business. Create a business plan that outlines your business goals, how you will make money and how you will market your services. One of the most important parts of the plan identifies the size of the market willing to pay for your product or services. You can download business plan templates online to make the writing process easier.

Additional Resources

  • The SBA provides information on a wide variety of topics, including funding with loans and grants, marketing and writing a business plan: www.sba.gov
  • The Internal Revenue Service Small Business and Self-Employed Tax Center provides basic tax information and lists free, live and online small business workshops: www.irs.gov
  • The more than 13,000 volunteers with SCORE offer entrepreneurs free and confidential business counseling services: www.score.org
  • Your local Chamber of Commerce may also be able to provide information and contacts.

 


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