How To Begin Setting Up Your Small Business Efficiently

Did you know there are about 30.7 million small businesses in the USA, which accounts for more than 99% of the businesses in the country? 

To add to this, these small ventures create 1.5 million jobs annually which account for 64 percent of the new jobs created in America. 

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When you think of the most popular reasons to quit your 9-5 job and start a new venture, there are plenty of reasons to lure you including an idea that can change life, working to achieve financial independence, not having a regular stand-up and sitting through those boring presentations where they talk about data and figures that don’t make much sense, etc. 

But at the same time, you must also know that every small enterprise is not set up for success. Only two-thirds of these small enterprises with employees are barely able to survive and about half of them are able to continue for more than five years. 

Again, that should not be the reason why you shouldn’t be taking the plunge. According to Harriett Jackson Brown Jr., the American author who is best known for his inspirational book, Life's Little Instruction Book, “Nothing is more expensive than a missed opportunity.” 

You may then ask what is the secret sauce to succeed with a small business. 

Let’s figure that out.

10 Steps to Set Up Your Small Business For Success 

There are several steps in the process to set up a successful small business. But it is recommended to take one step at a time and not rush through things. Once the stage is set, you’ll find it easier to navigate through the remaining steps. 

With that said, here is a detailed step list that’ll be easier for you to follow. 

1. Do your homework

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According to Glenn Gutek, the CEO of Awake Consulting and Coaching, "It is good to know why you are launching your business.” 

Do the required research about the companies that already operate in that space and what they are doing in that space. This will help you to refine your ideas and offer something better than what is already there in the market. 

This process of understanding the ‘why’ also makes it clear whether you're serving a personal need or a marketplace need. When you’re focusing on a marketplace need, the scope of your business will be larger than that of a business which caters to a personal need. 

For example, If you’re starting a product line, you may want to consider a jtbd template to understand the needs of your customer. This will help you to design the products that actually cater to their needs. 

2. Create a business plan

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This is the foundational step for your business. You cannot move ahead without having a rock solid business plan in place. It kind of helps you navigate through every stage of your business. 

The kind of questions you can consider answering through your business plan are: 

• What’s the purpose for me to set up this business? 
• Who will be the end users?
• What challenge does my product or service solve? 
• Is there any substitute in the market?
• Who is my competition in the market?
• What is the USP of my product?
• How do I price my products or services?

3. Estimate the finances

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It’s true that starting a small business doesn’t require a very heavy investment. However, the fact that you’ll require a minimum sum to cover the daily operational expenses before reaping in profits will definitely require you to plan your finances well. 

You can consider putting together an Excel sheet which will list down all the one-time expenses (for example, permits and licenses, branding, leasing a property, market research, trademarking, etc.) as well as the recurring expenses, such as rent, salaries, marketing, daily supplies, travel expenses, your own salary, and so on. 

You can also fund your business by opting for small business loans, grants, crowdfunding, and other financing options available. 

4. Register the name of your business

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It’s very important to register the name of your business. And while doing so, you may want to keep in mind all the future implications of this name and hence be very careful about choosing the right name that will be appropriate for your business. 

Once you zero in on a name, you need to make sure that the name is not trademarked or currently being used by someone else. When you’re done with selecting the name for your business, make sure to register a domain with the same name. If the domain name is already in use, you may consider using an abbreviation or check if the domain name is up for sale. 

5. Get in place the required licenses and permits 

When you start a small business, paperwork is an integral part of it. There are a variety of permits and business licenses that you need to take care of before you can actually launch your business. 

The paperwork also depends on the kind of business you plan to launch and the location of your business. You’ll also need to do thorough research on what paperwork will apply for your small business and then get a broker to do it or do it yourself. 

6. Create a budget and manage it

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To run your small business effectively, you’ll definitely need an accounting system in place. This accounting system will help you create and manage your finances, set a rate for your products or services, do business with customers, file taxes, and so on. 

If you’ve the means, you can set up the accounting system yourself or you can always hire an accountant to help you in setting it up. In case you decide to do it yourself, you can consider choosing a robust accounting software that’ll somewhat make the job easier for you. 

7. Choose your business location

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Zeroing in on your business location is one of the most important steps as it is from where you’ll operate. It could be your home office, a retail space, or a shared space. 

Irrespective of your location, you will need to think about the overall setup and what equipment you’ll need to operate from there. It’s also important to consider when you’ll buy a commercial space or just lease it. 

8. Purchase an insurance policy

It can obviously slip your mind but you’ll eventually need to get around it and consider purchasing the necessary insurance policies for your business to protect your company and yourself from any financial loss due to a crisis or an accident. 

There are several kinds of business insurance but you’ll mostly need to consider those that a small business can benefit from. For example, if you plan to hire a team to work for you, you’ll need to purchase unemployment insurance and workers’ compensation insurance. Many of the small businesses are also recommended to purchase General Liability (GL) insurance which covers any damage to the property, personal or bodily injury, etc. 

9. Hire a team

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When you set up a business, you wish for everything to work exactly as planned. And in the process, you often stress yourselves and overlook the important business functions while getting involved in every detail that may not be important. This is exactly where a team comes to the rescue. 

While you’re hiring a team for your small business, you need to outline all the positions you wish to fill and also make sure that you have the detailed roles and responsibilities highlighted for each of the positions. You’ll also need to give access to all the tools that your team will need to complete their projects. This will keep you stress-free and help you focus on the important functions while you let the experts handle what they do the best. 

10. Promote your venture 

Setting up your business is not the end of the game. You will need to start with your promotion activities to attract potential customers and generate revenue. First, you need a solid marketing plan to establish your Unique Selling Proposition (USP). For example, if you own an interior design consultancy business, you can definitely talk about your team’s expertise in using the latest interior design software that will help them achieve their design goals. 

The marketing plan should highlight how you will reach your target audience by implementing various marketing strategies. Some of the ideas include but not limited to revisiting your market research, conducting a focus group, refining your niche and target audience, creating or updating your business website and marketing collaterals, and so on. 

Conclusion 

According to Investopedia, only 25 percent of the new small businesses make it to more than 15 years. If you want to be one of those 25 percent, then it’s a must for you to pay careful attention to the 10 steps listed above. 

Success will not come overnight. You will need to put in consistent efforts to meet your goals. 

Once you’ve completed setting up your business, you’ll be able to make peace with yourself and put all your focus in growing your small business venture.