The COVID pandemic has had a dramatic effect on people’s lives. There are many people who are reevaluating their working situations and are considering starting their own business or possibly purchasing a business.
Government statistics show that applications for new business startups have increased significantly over the last 17 months, from 3.5 million in 2019, to 4.5 million in 2020 to an annualized number of 5.4 million in 2021.
So you may be considering starting your own business. Good for you. Maybe you have an idea that is worth pursuing. However, before you make the plunge and forge ahead, there are some key steps you need to take first.
There are 10 things you need to do before you proceed. These steps are suggestions from Hal Shelton, a business consultant and a SCORE mentor.
- Develop a powerful message. What customer problem are you solving that potential customers are willing to pay for?
- Fully understand the market and the customer you are trying to reach. Research the demographics of your potential customer base and understand their buying habits. Watch competitors, talk with similar businesses, browse your competitor’s website and understand what their customers are saying about them on social media.
- Start small and grow. If possible, self-fund your idea and then pursue outside financing after you have created a growth story.
- Understand your own strengths, skills and time available. This step is absolutely critical and involves self-evaluation on your part. If you are currently or have worked for a company or organization, you need to consider that there is a huge difference between being an employee and a business owner.
- Surround yourself with a team of professional advisors. Launching and growing a business is difficult and over half will fail within the first 5 years. No one person can have all of the knowledge and experience to handle every business situation. Gain from the skill and experience of others.
- Find a mentor. If you are not sure where to find a mentor, SCORE is a great place to start. Just visit the Tip of the Mitt chapter Find a Mentor page at to learn more about our local SCORE chapter and sign up for a mentoring session. The site also includes information on free workshops and webinars and many articles that are all focused on helping entrepreneurs successfully start and grow a business.
- Write a business plan. Writing a business plan gives you the opportunity to carefully think through every step of starting your business so you can better prepare and handle any challenges that arise. While a through business plan is essential of you are going to need outside financing, it can be helpful even if financing is not required. You can find a template for a business plan at www.score.org/resource/business-plan-template-startup-business.
- Know your numbers. Have a good grasp on the numbers that will tell you how the business is doing and what to expect. These include start-up costs, sales, projected profits and cash flow.
- Understand there are no entitlements. Don’t underestimate this one. You will work hard for all of your achievements. Being a small business owner is one of the hardest jobs around. It can also be one of the most rewarding.
- Have a passion for what you are doing. Being a small business owner can be very lonely and time consuming. There will be times when you find that there are not enough hours in a day to accomplish everything that needs to be done. From big successes to large letdowns, your job becomes that much harder if you are not fueled by a passion for what you are doing.
Just because you are taking your ideas and turning them into reality does not mean that you need to figure everything out on your own. Remember that there are numerous resources available to help you think through the process. This will be one of the most important decisions you will make and you want to make sure that you have all of the information that is available to you to make an informed decision.