Starting a small business can be an overwhelming venture. Once you have developed a great idea for an innovative product or service, it may be difficult to define your next step. There are some important things that you will need to put together prior to launching your business. These items are crucial to starting a successful and profitable small business.
Break-even Analysis
Before you can begin your small business enterprise, you must determine that you can indeed make money from this venture. The Complete Idiot's Guide to Starting Your Own Business defines a break-even analysis as a "technique used to determine the quantity of an item that must be produced or sold to cover the fixed expenses associated with the time period in question." In layman's terms, this means that you must determine if your service or product will still generate income after you have paid for all of the supplies, labor and other expenses associated with producing it. The break-even analysis is crucial to proving to investors and lenders that your business will be profitable.
Business Plan
Your business plan will explain your product or service and outline the details of the business, the cost of production, and facts and figures about the first few years of operation. The business plan should also include a cash flow analysis. The purpose of the business plan is to provide lenders and partners with a snapshot of what you plan to do and how it will be successful. Keep the business plan short and focused, highlighting the most important information.
Money
Unless you have extensive funds of your own, your small business will need some outside investors to provide the capital for start-up. You will need enough funding to cover rent and maintenance for your new place of business, equipment and supplies for producing your product or providing your service, and a salary for those on your payroll. A bank may be able to provide you with a small business loan to cover these costs. Other options include signing on a business partner or seeking out investors.
When you're pitching your idea, stick to business and avoid trying to "guilt" others into helping you. A solid business plan combined with your personal enthusiasm and knowledge about the project should be enough to sell others on the idea.
Marketing Plan
As you are getting your small business off the ground, you will need a solid marketing plan to draw in new customers and clients. You can hire a professional marketing agency to help you get the word out in the most effective way possible, but keep in mind that this will be an expensive project. You can also create your own advertising in print, online, on the radio or through a television ad. The most cost-effective method for promoting your new business is through word of mouth, so you should enlist friends and family to spread the word as much as possible. Keep in mind that a simple marketing plan will help to keep your start-up costs down.
Internet Presence
Many people search online for a product or service before they leave their home to conduct research in person. This makes an Internet presence absolutely essential for most small businesses. A well-created and maintained web page will give a written and visual reference to those who are interested in your company. Website providers such as Godaddy.com offer domain names and web page hosting for as little as $10 a year. A website like this will give your company an excellent promotional tool for everything from mailing lists to online coupons while providing an excellent point of reference for anyone interested in learning more about your company.
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