Proper Planning Leads to Small Business Success
Small business success stories are often the result of hard work and careful planning. If you're thinking of starting this journey, it pays to set your business up correctly right from the start. You'll need to properly register your new company, draw up a strategic plan, and make important financial decisions. You'll also want to develop a trusting relationship with a business banker who can help guide you through the process.
Determine Your Vision
Daphne Davis, a KeyBank branch manager in retail — who is supported by a team of experts — likes to sit down with new customers to learn about the business they're starting. She'll ask clients about their overall vision for the company and find the best way to assist them. Understanding where you're starting from and where you want to be in five years helps you set both short- and long-term financial goals. Do you want to grow from a home-based business to a company with 20 or more employees? Or are you happy to stay small-scale and serve a niche audience?
Writing a Business Plan
Once you decide on the business you're most passionate about, be sure to have a formal business plan. Not only will it show that you've given thought as to how you'll run the business, but it'll also set you up for success. According to the Small Business Administration, the traditional plan looks at nine separate items, including a market analysis and financial projections. You can also write a brief version of the plan, especially if you don't have all of the information yet. Nonprofit business advocacy groups like SCORE can help you write up a business plan or you can use templates that are available online.
Register Your Business
If you're applying for a business loan or line of credit, be sure that your business is registered and that you obtain a separate Tax ID-number. You may also want to speak to a lawyer or tax advisor about the best way to structure your new company. Many options are available, and some may work better for you based on your company size, sales volume, and the type of business.
Find a Location
According to the SBA, home-based businesses account for approximately 50 percent of all businesses. If you do operate from your home, you'll still want to take steps to formally set up your business, such as renting a P.O. Box and clearing out a space to work. For retail establishments, the U.S. Census Bureau provides online tools, including a location evaluator which will tell you how many similar businesses are already in existence in your city or town.
Funding Your Business
Daphne Davis' number one tip for business owners is to separate their personal finances from the business as much as possible. This can be as simple as opening a separate bank account to pay business expenses and using a business credit card. You should also talk to your insurance agent about purchasing a separate business insurance policy.
If now is the time for you to start a business, don't hesitate to stop by your local banking branch and speak with a business banker. They're a great resource that can provide a wealth of insight into the process.