Starting A Small Business in 2019: A Step-by-Step Guide
Thinking about taking the plunge and ditching your day job to become a business owner in 2019?
Before you dip your toes into starting a small business, it is necessary to note only two-thirds of businesses with employees survive at least two years while about a half survive five. But the rewards of starting a business — such as flexibility, financial independence and self-investment — far outweigh the risks. It is also important to note there are more than 28 million businesses in the United States, which compromise 99.7% of all US businesses.
Starting a business from scratch is only the start of the real challenge itself, but it defines how your business will succeed. So how will we know if starting a small business will not mean losses in money, capital, time and energy?
How to Start a Small Business
While businesses are breaking tradition more radically than ever, there is still a tried-and-tested methodical process to starting a business. While your business will have to adapt to how fast the world is moving now in terms of technological advancement, it pays to take it slow and to plan your small business step-by-step.
1. Starting a Business with Research
You were inspired by a business idea which made you contemplate about dropping the stability of your day job. Whether the business idea is the idealistic kind such as an app developer and photographer or the more practical one such as aquarium maintenance or dog waste removing, the theory is nothing without practice. Starting a business requires a validation process measuring the idea against reality and the current need of the market.
How to start a business validation process? The most basic questions to ask are whether there is a need for your desired products or services and if anyone would buy it. This is where identifying a target market comes into play. In starting a business, you need to know your ideal customer — age, gender, education level, income and location. You need to be very clear on the kind of market your small business will be attracting.
Afterwards, you will have to conduct a market analysis to determine the size of your market, the motivations into the purchases they make, and how your small business will reach them. It is always important to note the perceived market in mind must not be too broad or too narrow. Too broad makes you lose customers within your intended market; too narrow makes you lose potential customers outside your intended market. You will need data for this process.
Another factor is your small business’ competition, whether it is a big company or right across your street. Observing their dynamics and what you have that they don’t and vice-versa gives you more insight into what your customers want. In 2019, such information is crucial. This gives you the chance to tweak your product or service to your market, through your unique selling proposition.
2. Starting a Business Plan
Now that the theory has a realistic framework, it is important to establish a business plan which guides your small business from its start-up phase up to its growth.
A business plan is a document outlining the basics of the business’ perceived products and services and the business’ goals. Another two of the plans needed are the marketing plan and the financial plan, which a business plan should incorporate together into one blueprint.
How to start a business plan? There is a business plan for every business idea. Small businesses usually go for the traditional business plans as it is conducive for financial support from an investor or institution. However, writing a traditional plan could be overwhelming.
A traditional business plan should have its:
A highlight of the most important information in your plan, such as business name, location, business description, management team, and mission statement
An insight giving potential lenders and partners an accurate impression of your small business through your vision, mission, location and company size
Products or Services
With importance on the value that your small business intends to provide your customers or clients
A detailed overview of the industry your small business falls under, and the target market and competition
How you will price, promote, and sell your product or service
Business structure and management
Finances presently needed by your small companies and for its future growth, as well as an estimate of your ongoing operating expense
3. Starting a Business with Funds
While starting a small business does not require a hefty amount of money, there are start-up costs to the business which include:
- Licenses and permits
- Legal fees
- Market research
- Grand opening events,
- Property leases
For your small business to keep running for another year, calculating these expenses are important.
- Marketing and advertising
- Travel expenses
- Employee salaries
- Your own salary
How to start a business with the rough estimate? There are different ways to fund your small business, such as:
- Small business loans
- Small business grants
- Angel investors
4. Starting a Business Structure
The business entity you choose — varying from sole proprietorship, partnership, limited liability, company, or a corporation — will impact your small business from its name to the filing of taxes.
It is a big decision that may be best discussed with an attorney or CPA, but business structures may change through time depending on need and changes — which 2019 surely has a lot of, following market trends over the years.
5. Starting a Business Name
Starting a business name determines almost every aspect of your business, which means you have to put a lot of thought.
Apart from the creative and playful aspect to it, there are legalities surrounding your preferred business title, such as registering your domain name.
Afterwards, your business name is ready to be in paperwork.
6. Starting a Business Accounting System
One of the most important systems for a small business is an accounting system, necessary to create and manage your budget, set your rates and prices, conduct business with others, and file your taxes. Hiring an accountant is the best option, but going solo requires you to choose the best accounting software.
7. Starting a Business Office Set-Up
It is important for the location, equipment, and overall setup to be compatible to your small businesses. This is especially true for 2019, with customers motivated to sit in coffee shops or resorts for social media content.
There are options whether to have a home office, a shared or private office space, or a retail location. One decision you may face is whether to buy or lease your commercial space.
8. Starting a Business Team
No man is an island. Even if you plan to go solo, you will still need a support team comprised of a mentor, small business coach, or even your family. A business built on a lone man is bound to fail no matter how independent the person is.
In hiring employees, there is a need to outline the positions to fill and the job role and description under them. If you are outsourcing work to independent contractors, you will have to work with an attorney for the independent contractor agreement to get you and your team started. Both require a thorough understanding of the:
- Pay periods
- Compensation plan for holiday, vacation and leaves
- Payroll taxes as needed on quarterly and annual basis
- Social Security taxes
- Workers’ Compensation
- Disability Insurance
- Leave benefits
- Unemployment insurance
- Stock options
- Flex time
- Wellness programs,
- Corporate memberships
- Company events
- Child labor
- People with disabilities
9. Starting a Business and Promoting It
The last and most exciting part of the start-up process is getting out there. In 2019 and the past years, traditional forms of media have been overshadowed by social media — which is a double-edged sword depending on how you advertise online. But one advantage is that advertising is cheaper, more interactive and more creative than before. With your unique selling proposition and marketing plan, you are a step ahead.
Starting a small business is in itself a double-edged sword. It may become a phenomenal success worthy of your rags-to-riches story or strip you of your security and money. It also requires a lot of patience to tend to your small business before it grows. But with these tips on how to start a business, you are now ready to start one in 2019.