There are approximately 23 million small businesses in the country and they bring in 54% of sales in the US, according to the SBA. Have you ever wanted to get in on the action? Here are some tips and guidelines you need to think about before jumping in.
Offer what people want, not what you want to sell.
A lot of people launch businesses built around a product or service they think will be successful rather than one with a proven market or successful history. It’s important to understand that having a small slice of a successful business model in a proven market has less risk vs a new business model that’s completely unproven. Too many people get discouraged when they see someone has already launched their “dream idea.” Investors prefer to see competition in business plans; it validates your concept and business model for them.
Make a Plan
You have to have a plan in place before you jump in headfirst. It should clearly outline your goals for success in the next 12-24 months. You should also have an executive summary, a company description, a market analysis, and a drill-down of your products and services. This is basic information that all lenders and/or investors are going to want to see.
Know Your Target Audience
After your business plan is flawless, it’s important to understand your target market for your product or service. These are your potential customers, and they hold the key to making your business a success. You need to ensure that you understand their needs and pain-points well and that you have a marketing plan in place that will target them directly through a number of marketing channels.
You should have a good idea of the amount of revenue your business should bring in each year. It should be enough to cover all expenses while also having a good chance at eventually becoming profitable.
Talk to Your CPA
Small businesses are on the rise. In fact, the number of US small businesses has increased 49% since 1982. Your CPA can advise you on the main issues in addition to answer of all your financial questions and concerns.