You can obtain a small business by taking it over from a family member or purchasing an existing business, or by creating a first time startup business.
But, in order to be successful, you must have some beginning small business startup tips.
The first time startup business is one you startup completely from scratch, no clients, no office space, no employees, no funding. But, you have enough education and experience in the field that makes you feel as though you could pull off a successful business venture in the next 3-5 years.
It takes at least that much time for a small business to grow to a decent amount of profitability. I have compiled a list of small business tips for you to get started.
With a brand new business, you are starting up everything for the first time in order for the business to get up and running. The totally new business is by far the most rewarding, but also the most risky of business ventures.
The failure rate of new start up business is very high, because most people don’t know the 500 small business startup tips you should know before starting.
They go into business with a hope and a prayer instead of; 1) Knowledge of the field, 2) Knowledge of running a business, including, city, state, and federal regulations, 3) Extensive experience working in the field 4)Business accounting principles 5) Plenty of money to last before you are profitable 6) Have the ability to deal only with facts
If you are diligent and take things slowly it could work out. But you must be patient, and willing to work concentrated long hours to get started.
Also included in a new startup venture are these small business startup tips:
Obtaining A Mentor
1. Talk to many, many people who are already in the field to get the big picture. Ask them to be completely honest when they answer your questions. Tell them you need to know all of the good and bad about the business. If you don’t know anyone in the field you may not be ready.
Get the Experience First
2. Preferably, you should have worked in the field for a few years to see if it is a viable business. Your experience in your chosen field should be deep and through, no guessing games. The amount of time and money that goes into a small business is too demanding to be a guess game. If you fail the recovery could take years, if not decades.
Research is Essential
3. Do research, lots of research about the field. Find out if regulatory agencies are getting a lot of complaints about the type of business you are considering. There is research everywhere now. You can do small business research at the small business website or sba.gov. Go to your trade association or professional website.
Know Quality Financing
4. Be careful about financing, if you can’t get a bank loan for the business that may be a hint that you are high risk, and may have a high rate of failure. There are many predatory places of financing.
Most of these offer high-interest loans or balloon payment loans. It is best to wait until you raise your credit score, save substantial down payment, and have a high grasp of business techniques.
Venture Capital Funding
5. Consider venture capital funding for the business. This is very difficult, but possible. You should have a mentor who can guide you through the process. There is a complicated web of business plans and contacts within the industry that you need to access.
6. Consider starting out as a non-profit venture and getting a grant to run your business. Be careful, you could be jailed if you can’t account for every single penny of the money within your business. Running a non-profit also includes first getting a 5013C. Hiring a grant writer to write grants for your non-profit business is a good idea. Writing a grant takes skill and experience.
The Right Accountant
7. You must have a close relationship with a good CPA (Accountant), and a good bank, and a good business attorney. Your knowledge of small business accounting should be through, so you can choose a competant accountant. The wrong or missing accounting could damage your business for life.
8. You must understand the different types of business leases there are, and that you could loose all of your personal property (home etc.), if you default on a business lease. Research the types of leases, they are: 1) Net, 2) Net, Net, 3) Net, Net, Net.
Many people sign Net-Net-Net leases with a 5 or 10 year commitment without knowing what it means. Business leases is an area that causes many small businesses to fail, understanding a lease is complicated.
Obtain a good real estate attorney to advise you on the different types of leases and negotiate one you can afford as a new business. You may consider starting with a month-to-month lease if you are using your own money, instead of bank financing, and you don’t have to do leasehold improvements.
Your Bank Loan Tied to Your Lease
If you have a 5 or 10 year loan, or if you expensive leasehold improvements and you are on a month to month rental. You could be asked to leave any time. The best way to start a small business is from home if that is
possible. Running a business from home also posses many risk.
There are also leases on business equipment. These are especially tricky, no all the ins and outs before you consider one.
I have signed two 5-year leases with a previous business I owned, I feel this makes me fairly competant to discuss business leases.