There are few things in life that present the same highs and lows as running your own business. The joy of seeing your vision come to life is quickly followed by the struggle of figuring out how to pay for the next batch of inventory. If you have a business idea but don’t know how to run and manage it successfully, this guide is for you.
Running and managing a small business isn’t easy, but with the right knowledge, support network, and strategy, you can make it work. From accounting to zoning regulations, starting and operating a business involves many details. This guide will give you everything you need to launch your own company — from registering your business to coming up with a killer marketing plan.
What is a small business?
A small business is a company that’s independently owned and operated, with less than 500 employees. In fact, the U.S. Small Business Administration (SBA) defines small businesses as those having fewer than 20 employees. But in reality, “small” is really up to your own discretion. Depending on the type of business, you may want to keep things very small and hands-on, or you may want to expand the company to be a major player in its field.
What’s more, you don’t have to be a single person to run a successful small business. While there’s no official rule on how many people can run a single company, you’ll likely need a few employees to help you get things off the ground.
Know your costs before you start
One of the biggest mistakes new entrepreneurs make is not budgeting for all their costs. If you don’t know what your monthly overhead is, you won’t be able to plan for the future. You’ll be flying blind, trying to make decisions without any data or information.
This can be incredibly stressful, and it impedes growth. All of a sudden, your business isn’t just about being profitable. It’s about staying afloat. You need to know exactly where your money is going so you can make smart, strategic decisions.
When you have your budget set up, you can track your progress. This will help you know if you’re meeting your goals. It’s also a great way to track your progress if you apply for financing.
Set up shop: Legal and administrative tasks
- Business name: If you want to be taken seriously, you’ll want to pick a name that’s easy to spell and understand. In addition, you want something that matches your brand (we’ll get to that later). If you don’t, you’ll find it difficult to get people to remember your name and trust your business. You also don’t want it to be too similar to a competitor’s name. Check to see if the name is available online. You can also run it through your state’s business registry or check with your local chamber of commerce to see if it’s been taken.
- Business structure: You may have heard that startups should be bootstrapped — meaning they should be run on a shoestring budget and use as few outside resources as possible. But as soon as you start generating revenue, you should consider adopting a business structure: These are just a few of the many legal and administrative tasks you’ll need to tackle when you start your business.
Don’t forget about marketing
Entrepreneurs are natural salespeople. Unfortunately, they often forget to include marketing in the budget. This is a big mistake. Without a marketing strategy in place, you won’t sell anything. Period. You might make sales here and there, but you won’t be able to scale your business without marketing.
- What is marketing? – Marketing is everything you do to get your product or service in front of people. This includes everything from setting up consultations and providing free samples to developing a website and social media strategy. Marketing isn’t just the stuff your company does. It’s also what your clients and customers do. This includes word-of-mouth advertising, referrals, and reviews.
- Where do you start? – Before you can begin marketing, you first need to determine who your target audience is. Use these questions as a guide:
Stay continually vigilant for fraud
As a business owner, you’re more likely to be targeted by scammers than the average person. Why? Because you’re a decision-maker with assets of your own — and fraudsters want to take advantage of that. With that being said, you don’t want to let your guard down. If you’re not constantly on the lookout for fraudulent activity, you put your company in a bad position.
In fact, being too lax when it comes to fraud could result in serious ramifications, such as fines and even being shut down. There are many different types of fraud you need to be aware of, including:
By the way, don’t call your worker an “employee”
This may seem like a small detail, but it’s actually a big mistake that many small business owners make. You may be tempted to call your first hire an “employee,” but keep in mind that this word comes with very specific rules and regulations.
If you call your first hire an “employee,” you may be missing out on crucial tax deductions that are available to independent contractors. Before you decide on what title to give your first hire, talk to a lawyer and accountant. They can help you navigate the rules and regulations surrounding what you can and can’t do.
Running a small business is challenging and rewarding, but it’s also full of unique pressures and obstacles. To succeed, you have to be prepared to navigate a wide range of issues, from marketing and branding to managing finances and keeping fraud at bay. With the right knowledge, support network, and strategy, you can make it work.