Small businesses are the backbone of the U.S economy. In fact, without small business there would be no economy! It’s said that a business starts small and grows large. This isn’t quite so simple though. It takes time to grow a business into a successful entity that produces money.
To begin with, you need to have a clear idea of what type of small business you want to be. It could be a restaurant, deli, cafe, bookstore, hardware store, cleaning service or garage sale. These are all broad categories of small businesses. However, the key is to narrow it down to the specific type of business that interests you. Here are some things to consider:
Your capital – You need to figure in your capital (money) for your small business. There are several ways to do this. You can include your personal savings, stock funds or other investments, and you can use bank loans, equipment and supplies, or purchase commercial real estate. The capital needed will depend on your goals and financial situation, but you should think carefully about how much you can afford to spend on your ventures.
Employee numbers – You must carefully consider the number of employees you intend to have working for you. If you want to start a cafe, there are obviously going to be some cafe workers, but there may also need to be wait staff, salesman, etc. Some people start small businesses with just a few employees, such as dog walking, house sitting and laundry. If you want to be self-employed, then you must be prepared to list every job you have performed for the last three years on your business application. For many small business owners, tax benefits become available when they reach a certain percentage of employees.
Employees vs. Financing – There are several things to consider when determining the size standards for starting a small business, both financially and technically. Employees are necessary because you cannot operate a business without them. They help promote your products and services, which will lead to more revenue. Financing is necessary because you will not be able to buy all the equipment and supplies on your own. Depending on how large your goal is, you may have to finance only a portion of what it will cost to start and run your business.
Selection of the selected characteristics should be based on the evaluation of the factual information that each characteristic can provide. For example, business location is one important characteristic to select because a small business needs to be located in an area where it will be seen by customers and clients. Customer service, on the other hand, is a vital characteristic because good customer service creates a positive image of the small business. It also creates a favorable impression on future customers. Together, these two selections provide information to the decision-maker about the nature of your business and the kind of people you want to operate it.
Industry Publications – Many business magazines and publications exist today that focus on the small business sector. Some even go so far as to outline small business employment opportunities. However, it is often difficult to locate these publications near you, unless you live in a large metropolitan area, and even then, it may not be easy to find the ones that focus on small businesses. You should check with a local library to see if there are industry publications available that focus on small businesses.
Business Growth Potential – Not all small businesses succeed. There are many factors involved in determining the success of a small business, such as profitability, market penetration, and growth potential. These two factors, along with the other selections previously mentioned, are based on factual information about the profitability of the small business’s industry. A financial statement, a business plan, and business projections are just a few tools that are used to determine the health of the industry. If you have questions, you can contact a local book store or small business consultant. They will be able to help you determine your business’s profitability and growth potential.