In today’s economy, having your own business means you can’t be laid off, and your future depends on your own hard work—not the whims of a manager or a market that’s struggling.
Many people who are self-employed wouldn’t have it any other way, and they enjoy the benefits of making the decisions.
If this sounds intriguing to you, here are four steps to take before making the transition.
Step 1: Research and Read All You Can
Many free resources exist for prospective small business owners to learn about entrepreneurship and the ins and outs of small business. Here are a few to get you started.
- Internal Revenue Service. The IRS provides invaluable information to properly set up your business. In addition, make sure you register your business with the Secretary of State’s office in the state in which you’ll be doing business.
- Local library. Your local library has a wide selection of business start-up, business finance, marketing, and industry resources available.
- Small Business Administration. The SBA is an independent government agency that offers guidance of all kinds to small business owners. It offers a wealth of tools, including information on financing your business, getting proper licensing, and marketing your business.
- U.S. Chamber of Commerce Small Business Center. This site offers a large online library of resources for small business owners, including a several toolkits that cover insurance, finance, tax, and other issues.
Step 2: Get Your Hands Dirty
Before you launch a business, get some experience under your belt in the industry or area you’re considering. Here are some options to explore:
- Try it out. Get a part-time job in a similar business for priceless firsthand knowledge.
- Take a class. Community colleges offer inexpensive courses that will help you in your quest. Check out classes about marketing, sales, and other business areas.
- Network. Join a networking group or your local Chamber of Commerce to meet other small business owners. Learn from their experience.
Step 3: Create a Business Plan
A business plan captures and explains everything about your new enterprise. The resources listed in Step 1 have tips to create a solid business plan that helps you anticipate the road ahead and plan for success. Even the smallest business should have a business plan, and it’s essential if you’re planning to find investors or take loans to fund the start-up of your business. Your business plan should include:
- Executive summary — describes your business, including your mission statement (what you plan to accomplish), why you believe you’ll succeed, and what experience you have to put behind your business.
- Market analysis — explains who your target customers will be and why your business will find success in the current market climate.
- Financing — illustrates how much money you’ll need to get started and how you plan to spend the money.
Step 4: Ask For Help
Successful small business owners have a team of advisors. Create your own team of experts, including the following:
- Accountants: Find an accountant who is savvy about small business tax issues. The American Institute of Certified Public Accountants provides a search engine to find an accountant in your area.
- Attorneys: The American Bar Association offers a search engine to locate an attorney with small business expertise.
- The Service Corps of Retirees (SCORE): SCORE is a nonprofit organization of former businesspeople that offers free assistance to entrepreneurs and business owners. You can find a mentor, attend workshops, and read about issues relevant to your new venture.
This material is provided by SmartAboutMoney.org, a site from the National Endowment for Financial Education (NEFE) that helps people make sound decisions throughout all of life’s financial challenges.
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