If you plan on owning a business someday, there are a few things you need to know. It’s no walk in the park. There’s a reason nearly half of all small businesses fail in the first five years.
However, statistics shouldn’t scare you away from going after your dreams. Just be sure to do your research and know what you’re getting into. For a start, check out this list of 10 things you’ll need for owning a business.
1. A Business Plan
Before you start collecting financing or throwing together resources for starting a business, you need to create a thorough, well-researched business plan. This plan needs to include a description of your business – what it is and why it will be successful. There needs to be a complete breakdown here of the services you’ll offer and who your business will cater to.
Next, you’ll want to present your market analysis based on all the research you’ve done. Is the industry growing or in decline? What’s the competition like in your area and how will you be different or better?
Then, you need to tell potential financers how you plan to be successful:
- Who will you have on your team?
- How will you market your business?
- What services and/or products do you offer?
- What are your growth projections?
To get started owning a business, you have to crush the business plan and convince lenders that you’ll be a good investment, which mostly rides on your business plan.
For any investor or lender who will take you seriously when applying for business funding, they’re going to want to see your business plan, as mentioned above. However, you have several options here when it comes to acquiring funds for starting and owning a business.
First, the most traditional route is applying for a business loan through a bank. These loans come with low, fixed interest rates. Additionally, no matter what happens with your business, the bank doesn’t have any ownership or equity in it, only the loan itself.
However, bank loans can be difficult to obtain if you have little or poor credit. They’re also often secured against assets (such as your home). Finally, even if you get approved for a bank loan, it may not be for the full amount you request.
You also have the option of private investors or investor groups. A private investor can be a friend or family member or someone who just really believes in your business idea. Investor groups consist of affluent people or organizations who will take a chance on startup companies if they see value or potential in them.
The downside of using investors is that they often invest in exchange for equity in the company. If your business goes on to make millions of dollars, they’ll always have a claim to their percentage.
3. Legal Advice
Owning a business makes you slightly more vulnerable to the law. There are a lot of laws, rules, policies, and legal standards you must abide by. This includes everything from hiring employees to paying your taxes.
It may not be a bad idea to have an attorney on standby to run things by in terms of employee rights, legal contracts with other businesses or private contractors, and/or protection against lawsuits.
Additionally, if your business doesn’t take off as quickly as you expected, you may have trouble paying your SBA loan, which may leave you vulnerable to SBA lawsuits and wage garnishments. We recommend trying to find an SBA protection law group as soon as you start to struggle to make payments.
4. Licenses, Permits, and Insurance
When owning a business, you need to make sure you’re operating 100 percent legitimately. This means acquiring a business license to operate a business in your city, as well as any permits or certifications you might need for your particular type of work.
Lastly, you need to ensure you and your business are completely covered through insurance. At the very least, you need liability insurance which will protect you in the event that a third party is somehow harmed by you, your employees, your building, products, or services.
However, be sure to look into all the types of insurance you might need based on your particular business and operations.
5. A Team
Owning a business isn’t easy. You may not want to do it alone. We recommend finding a team of trustworthy individuals who can help you propel your business to success.
This can be anything from a small board of advisors who help you brainstorm and solve problems for a whole host of employees. This could also mean bringing on a business partner to help share the load.
6. A Memorable Brand
Every business needs an image that consumers can recognize and grow to love. Your business name, logo, and general image in the eyes of the public are what make up your brand. The products or services you offer, how you treat customers, and the quality of your business are what people remember.
It also helps to create a unique logo, have a solid marketing strategy, and actively engage with consumers.
7. A Marketing Strategy
Speaking of marketing, the difference in owning a business and owning a successful business largely comes down to your advertising tactics. Do some research and experimenting to see what works and what doesn’t. What does your target audience respond to the best?
Here are some quick marketing suggestions:
- TV and radio advertising
- Social media marketing
- Pay per click marketing
- SEO marketing
- Content marketing
- Email marketing
- Landing page marketing
- Influencer marketing
8. A Formidable Online Presence
Much of the above-listed suggestions were digital marketing tactics. There’s a reason for that – roughly 92 percent of consumers shop online. If you don’t have a substantial online presence, you’re leaving money sitting on the table.
Make sure people can find you online, through your website and various social media platform. Learn how to use SEO to your benefit, even if it means hiring out the work to a specialist.
9. An Accountant and/or Financial Advisor
Owning a business requires having a strong understanding of finances and budgeting. While many business owners attempt to do themselves, very few of them do it well.
Consider hiring an accountant to do your bookkeeping, help with taxes, and do the majority of the hands-on work to manage your finances. If you feel like you need extra help creating a budget or long-term financial plan, we recommend hiring a financial advisor, who can help you with your personal and professional finances.
10. Incredible Work Ethic
Finally, owning a business demands no small amount of time, effort, and dedication. If you want to be a business owner, it means committing to putting in a lot of hours (typically, without an immediate payoff). You must hold yourself to a high standard of unwavering work ethic.
Want More Advice on Owning a Business?
If you plan on owning a business someday or already do, be sure to check out the rest of our articles for more advice and information. We have articles on everything from leadership and success to financial and personal growth.