There are many benefits to being your own boss. You can set your own schedule, hire employees of your choosing, and don’t have to report to anyone other than yourself. If you are interested in transitioning from working for a company to working for yourself, follow these steps to open a small business.
Conduct Market Research
Before taking concrete steps to set up your business, take steps to ensure that your business model has potential for success. Questions that you should address include the potential demand for the service or product that you plan to offer, the size of your potential customer base, the socioeconomic status of your target market, and the prices that you may plan to charge. This information can be gleaned from sources such as the U.S. Census Bureau, the Bureau of Economic Analysis, and the Consumer Price Index.
Secure Funding
There are a variety of costs that go into setting up a business from scratch. Depending on the type of business that you will open, these costs include (but are not limited to) renting or buying office space or a storefront, purchasing inventory, and hiring employees. Depending on your financial situation, you may want to consider borrowing money. Make sure to do your research and read up on your options, since there are a variety of banks and companies that are able to provide small business loans.
Choose a Location
Where will you set up shop? This decision will affect your mortgage and property taxes (if you choose to purchase the space) or your monthly rent (if you choose to rent the space). Other factors include crime rates in the area, foot traffic, whether potential competitors will be nearby, and your daily commute. It is important to see several potential spaces before making a decision. You should also check your location’s zoning laws to ensure that your business would be compliant.
Set Up a Bank Account
Owning and operating a business involves a significant amount of cash flow. To keep your personal and business finances separated, protect yourself from tax filing issues, and avoid any other potential liabilities, you will need to open a bank account that is dedicated to your business. When choosing a bank and the type of account you wish to open, considerations include monthly transaction fees, incentives for maintaining a certain balance, and any potential maintenance fees.
There are many other steps that you will need to take before opening your business. These include writing a business plan, registering with state and local governments, and marketing your business both online and offline. Consider consulting a lawyer, accountant, or other professional for help and advice. Good luck with your business!
