Entrepreneurship is on the rise all over America. According to the US Census Bureau, Americans registered 4.3 million new businesses in 2021, a 24% increase from 2019.
This trend is not slowing down. In November 2021, Americans filed 432,034 trade applications. The message is clear: if you’ve always wanted to be your own boss, 2022 is the perfect time to grow your business.
Of course, starting a new business is not easy. But SCORE mentors can help. We continue to receive requests for assistance in starting a new business.
I’m going to share seven tips to help you turn a business idea into a thriving business. These were made by Zoe Devitto, content marketing strategist for SaaS brands like FollowUpBoss, Mention and others, and content partner with SCORE.
1. Be clear about your business objective
Your business purpose is your “why” or the driving force behind your business. Defining it is crucial because understanding your purpose will help you make goal-aligned decisions when facing challenges.
To define your goal, ask yourself:
- What will your business offer customers?
- What differentiates your business from your competitors (i.e. your “Unique Selling Proposition” or “USP”)?
- Who are your clients ?
- What do you want your company’s legacy to be?
- Why does the world need your business right now?
- What is your corporate social responsibility and how will you give back to your community?
2. Create a solid business plan
A business plan is a document that outlines your goals and how you will work to achieve them. Business plans typically include:
- A summary that describes the ideas and visions of your small business.
- A description of your business structure and operational plan.
- Research your target audience, competitors, and industry.
- Your management and staffing plans.
- Your financial plan, including financing plans, sales forecasts, profit and loss projections and cash flow projections.
There are many ways to write a business plan. If you already know what you want to include in your plan, you can use a business plan template. Or, if you prefer a lesson, try our “Building a Business Plan” course.
3. Sort out legal processes
Obtain a business license before opening your business to ensure you are operating legitimately. Depending on your plan, you can choose to register as a sole proprietor, general partnership, limited liability company (LLC), or as another structure (like an S corporation).
Once you are registered as a business, find out about your tax obligations so you can comply immediately. If you need advice, consider consulting a tax accountant.
You may also need to obtain a license if your business is undertaking an activity regulated by a federal or state agency. You can check the permits you need on the Small Business Administration website.
4. Design your marketing plan
Developing a marketing plan when you first open your business can help you grow your business quickly, as it will help you attract customers, build brand awareness, and make sales.
Consider including several forms of marketing in your plan, including email marketing, social media marketing, traditional marketing, pay-per-click (PPC) marketing, and content marketing. Diversifying your marketing efforts will help you reach a wider market, leverage online shopping, and build your brand’s public image.
5. Create sales projections
Sales projections are crucial because they give you something concrete to work towards and mark your progress. It’s also crucial to outline your sales projections if you have investors, as you can use projections to demonstrate why your business ideas will generate a strong return on investment (ROI).
For best results, create data-driven sales projections based on competitor performance and market research. You should also adjust these projections based on your initial trading performance.
6. Have a concrete financing plan
Unfortunately, inadequate funding leads to the collapse of many new businesses. Develop a concrete financing plan that covers how you will manage your cash flow, debt repayments, insurance, investments and ongoing business costs.
Your financing plan should also take into account changes in your performance, including:
- How you would handle a sudden drop in sales or revenue.
- How would you handle an unexpected disaster.
- How do you plan to account for inflation or rising costs.
- How you would keep your business afloat during a crisis like COVID-19. (COVID-19 has affected 76.2% of American businesses.)
7. Take it one day at a time
Finally, remember to approach each day as a new opportunity for your business. Many small business owners struggle to attract customers, make sales, and network effectively in the first few months.
Don’t get stuck in a negative mindset and instead focus on building a profitable business little by little each day.
Dean Swanson is a SCORE Certified Volunteer Mentor and past SCORE Chapter President, District Director and Regional Vice President for the North West Region.