Do you see yourself working at an office eight hours a day, five days a week, until retirement?
For some, the answer is a simple yes, but many others dream of being their own boss.
According to the Small Business Administration, thousands of new businesses are established annually, but the harsh reality is that thousands of businesses also close each year. So, it goes without saying that starting a business, and keeping it running, isn’t easy.
Whatever product or service you plan to offer, getting a business off the ground requires research, sacrifice, discipline, and hard work. There are so many factors to take into consideration and challenges that you need to overcome along the way. That being said, turning your business idea into a reality is both rewarding and fulfilling.
It’s also never been easier to start a business on your own. There’s a huge amount of information out there to help you with everything from the structure of your business, the licenses you have to obtain, tips around the best tech tools that can make you more efficient, and advice about how you can protect your business with commercial insurance.
Before you hand in your two-weeks notice, here are several steps on how to successfully start your own business:
1. Know what you’re passionate about
A business idea should be something that you love and believe in. Unlike your office job, being a small business owner will require much more of your time, so make sure it’s something you enjoy.
If you already know what you’re passionate about, that’s great, but don’t quit your job just yet. You need to do some solid market research to determine if your idea can be turned into a successful business. Ask yourself:
- How can my product or service help my audience?
- Is my product/service fulfilling a need in the industry?
- Who is the competition in the industry?
- What marketing strategies can I use to promote my products or services?
2. Make a list of goals
Being an entrepreneur may mean struggling to make ends meet. It could be months or even years before your business makes a profit, so before you cut off a steady source of income, set realistic goals for yourself.
Before venturing out on your own, save as much as you can. If you have any credit card or student loan debt try your best to pay it off in full. And, if you’re currently renting an apartment you should ideally have six months’ worth of rent set aside. Don’t forget to buy health insurance, without it you’ll be stuck paying out-of-pocket with money that could have gone into your business.
3. Write a comprehensive business plan
Any business without a solid plan is doomed to fail. After conducting market research, it’s time to lay everything down and create a business plan that’s solid enough to prepare you for the challenges ahead and pique the interest of potential investors.
What should be included in the business plan? The document should start with an overview and a summary of your goals – why you’re starting a business. It also includes the company description and significant data about the industry your company will operate in. The business plan also gives details about your marketing strategies to introduce and promote your products or services to your target market. This document also provides information about how you will operate the company.
4. Make your business legitimate
Decide what type your business is going to be. Is it a sole proprietorship? a corporation? partnership? Are you looking to start a Limited Liability Company (LLC)? Whatever structure you choose, you need to register it with the appropriate agencies or government bodies. Bear in mind that when making it official, several factors come into play. These include business licenses and permits, tax returns, and capital.
Bonus tip for small business owners: you can enjoy several tax deductions once you make your business official. Make sure you know how to fill out a 1099 form.
5. Purchase commercial insurance
When starting a small business, commercial insurance might not be at the top of your to-do list. It may feel like an additional cost on a long list of expenses.
However, insurance should be a priority when you start your own business. You need adequate protection that will enable you to keep your operations going in case something unfortunate happens. Besides, some insurance policies are required by state regulators or are necessary when filing for business loans or licenses.
Here are some basic policies you should know about:
- General Liability: This is the most basic type of coverage for business owners, regardless of size or industry. It protects your business against claims of third-party damage to property or bodily injury. For example, say a customer comes into your store and slips on the floor breaking their leg. General Liability would cover the claim.
- Commercial Property: As the name suggests, this policy will protect your office and business assets should an accident happen, like a fire. Even if you plan on operating out of your home, it may be necessary to purchase this policy as your homeowner’s or renter’s policies may not cover property that’s used for commercial purposes. (Pro tip: You can actually bundle General Liability and Commercial Property together into a Business Owners Policy (BOP), which could save you money compared to purchasing the policies separately.
- Workers Compensation: This policy is often a legal requirement once you put an employee on your payroll. It covers employees who are injured on the job or become sick as a result of working. The policy will pay for medical expenses and lost wages.
- Professional Liability: If your business includes offering advice to clients, you should consider this policy in the event that your guidance or services result in a financial loss to your client.
6. Promote your products or services
As a newcomer in the industry, you need the right marketing strategy to introduce your company to your target market. In this digital age, you cannot go wrong with establishing a strong presence on social media. More and more people turn to social media not only to stay connected with their peers but also to buy or sell items, look for information, and keep up-to-date about their favorite brands.
Another solid strategy includes maintaining an email list. Email marketing is easy and cost-effective, which is always helpful for small business owners. Many email marketing platforms can also double as customer relationship management (CRM) tools to help you attract new customers.
Another simple marketing channel to start with is blogging. A blog will help you introduce and promote your company through articles that provide relevant information to your audience, increasing brand visibility and credibility. The key here is to publish great content. Eventually, you’ll have a following that can turn into customers.
7. Leave your job on good terms
Now that you’re ready to quit your day job and start your business, it’s important you leave on a positive note. Make sure you complete all your projects and, if possible, train your replacement. Say goodbye to your boss and colleagues properly. Starting a business is a risky endeavor, and you will want all the positivity and support that you can get to achieve success. Who knows – your previous co-workers or even your boss may soon be your customers.
Running a business is challenging but the rewards are worth it. Be fully prepared, work hard, and stay motivated. If at first you don’t succeed, you can always try again and learn from your mistakes.
Emily is the Content Marketing Specialist at CoverWallet, a tech company that makes it easy for businesses to understand, buy and manage commercial insurance online. She has written for several outlets including Inc., Ooma, and Fundera covering small business news and advice.