Starting a small business is a complex process that requires significant resources, not only money and materials but also time, energy and commitment. While becoming an entrepreneur is the dream of many people, it takes hard work, a team of professionals ready to assist, and the support of friends and family to make that dream come true.
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Small businesses need an infusion of capital in order to operate until the business starts making a profit. Usually, the business owners make a capital contribution to capitalize the business -- or start with nothing and bootstrap their business with hard work and tight belts until it begins generating income. Loans from friends and family, bank financing, and grants or loans from non-profit organizations or the U.S. Small Business Administration are other common ways that entrepreneurs secure startup capital to launch their small businesses. Like most other aspects of starting a small business, securing capital requires superb communication skills, strong commitment and the dedication to continue seeking alternative funding sources if you are turned down by those you approached first.
No small business owner can start up and succeed without a support team that includes expertise in law, finance and marketing. A sharp accountant can save you money and make sure you avoid trouble with taxes, while a savvy business attorney can help make sure you secure valuable rights in your products and marketing materials. A mentor can provide the invaluable wisdom of experience. Mentors and connections to people with small business marketing savvy can often be found through SCORE, a national non-profit associated with the U.S. Small Business Administration, or through state or local non-profit small business development centers. Workshops and social gatherings through these nonprofits help put you in touch with other small business owners who can share their resource of experience.
Management and Plan
A successful small business starts with a business plan. The business plan establishes a road map for moving your small business forward. Writing the business plan allows you to assess your capabilities for managing the growing business. A startup small business typically needs a person who is dedicated to running the business on a daily basis and for long hours, including on weekends. While a new business owner with substantial resources may be able to hire managerial assistance, the person working the 80 to 100 hour weeks in most startup small businesses is the owner. This commitment requires not only time, but the support of friends and family.
A startup small business needs a marketable product or service. The small business owner must acquire the expertise as well as any professional licenses required for many service businesses, from cosmetologist to attorney. Developing a new product requires capital for purchasing inventory or raw materials, as well as acquisition of skills in packaging and marketing, production at the scale necessary for profit, and safety considerations, especially for products like food. Test-marketing and producing samples to entice wholesalers into picking up the product may be necessary, depending on the type of business. Time and money must usually be spent on market research, discerning consumer's needs or wishes and creating a unique product or service that fills the market niche.
References & Resources
- Inc.: How To Raise Start-Up Capital
- Entrepreneur: The Four People You Need On Your Team
- SCORE: Our Mission
- Silicon Valley Small Business Development Center: About the Silicon Valley SBDC
- University of Georgia Small Business Development Center: Startup Basics
- U.S. Small Business Administration: How to Write a Business Plan
- USA Today: Starting a Business: What it Takes
- Pacific Community College: Getting Your Recipe to Market
- U.S. Chamber of Commerce: Importance of New Products
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