By: Marc Prosser | Fit Small Business
The startup world is an exciting one. It’s fast-paced, competitive, and incredibly satisfying as you watch your longstanding dreams become realities. However, just getting a business off the ground requires countless details to be in order – details that are easy to overlook if you’re not organized and prepared. We’ve assembled five of these base-level essentials that need to be in place before your business can flourish, so read on and you’ll be fully equipped for the adventure ahead.*
Know Your Target Market
When you’re first setting out to start your business, you need to be well acquainted with your target market. After all, it’s nearly impossible to sell a product if you don’t know whom you’re selling to!
Start by looking into some statistics and industry reports that will help you form a picture of the types of people that are interested in your product. Then, take a look at your competitors’ markets. This can make your job a little easier since they have already done the footwork to find their demographic.
Don’t be afraid to dig into social media; by checking out brands similar to your own on Facebook and Twitter, you’ll be able to see easily who follows which products and what other interests they share in common. All of your marketing is hinged on you knowing your target market thoroughly, so never stop learning about your potential buyers.
Finding Finance Options
Bringing your brainchild to life requires capital, and unless you’re independently wealthy, this means you’ll need to get financed. Thankfully, there are a host of options available to help get you the cash you need.
If your credit score is good, you may be able to qualify for an SBA startup loan, which can give you a considerable amount of capital for relatively low interest rates. If you don’t have a super high credit score, you can always go with a nontraditional online lender. Though you may not receive quite as much in the loan, it will at least give you the initial boost you need to get started.
One unique way to fund your business is crowdsourcing. This method involves asking the general population (via social media) to offer donations, in exchange for free gifts or other perks once you’ve gotten off the ground. The best part about crowdsourcing is that the funds are akin to a grant and you typically won’t have to pay the money back.
Create a Business Proposal
Even if you’re not getting funded by a traditional lender, every small business still needs a business proposal. You need to be able to show people at a glance what you’re about, who your target market is, how you plan to operate your business, and all the other minutiae that will make you a successful business. Without this plan, you can set yourself up for failure. It helps define your goals and keep you on track, and encompasses every aspect of the startup so that no stone goes unturned. It’s as much for your own benefit as it is for potential investors, as it allows you to define and measure your success.
Choose a Business Structure
One of the many legal/financial hoops you’ll have to jump through is determining your business structure. If you are the only one involved in the business, you can start a sole proprietorship fairly easily (or a general partnership if you will be running the business with other partners). However, with this structure you may be held personally responsible for any of the business’s financial obligations.
If you are a larger startup and need more flexibility, you can form a corporation or LLC. This also generally exempts you from certain financial liability for the business, so that if anything should happen with the business your own credit will come through unscathed. This is just a few of the different business formation options that are out there. It is best, of course, to discuss the various business formation options and the pros and cons of each with a legal and accounting professional.
Insure Your Business
Once you’ve set up your business structure and financing, you now have to protect your assets by insuring them. A lawsuit, theft, or accident can cause serious financial detriment to your business, so it’s best to head off this situation entirely by purchasing insurance that will cover potential issues you may face.
The type of insurance needed varies depending on the business, so think about any possible troubles that may arise and plan accordingly. At the very least you likely need property insurance (to cover equipment and the physical location of the business) and liability coverage (which deals with accidents, injuries, etc.). Discuss all the variables with your insurance agent, and you’ll come out with a package that will keep your business running smoothly and safely.
Starting a business is a huge step, but by carefully organizing the process you can save yourself time, stress, and hassle. Tackle these five essentials and your startup will be up and running before you know it.
About Marc Prosser: Marc Prosser is the co-founder and managing partner of Fit Small Business, a site that provides reviews and articles for small business owners. Prior to starting Fit Small Business, Marc was the CMO of FXCM for ten years. He joined as FXCM's first employee and grew the company to more than 700 employees.
*This article has been prepared for general information purposes only. The information presented is not legal, financial, tax or accounting advice, is not to be acted on as such, and is subject to change without notice. Credit approval is subject to LoanMe's credit standards, and actual terms (including actual loan amount) may vary by applicant. LoanMe requires certain supporting documentation with each new application. If you have any questions regarding this, call us at 844-311–2274. California loans are made pursuant to LoanMe's California Department of Business Oversight Finance Lenders Law License #603K061. LoanMe also offers loans in certain other states which may have higher minimum loan amounts. Copyright © 2017 LoanMe, Inc. All rights reserved.