Small businesses are thriving in the U.S. Today, there are nearly 30 million small businesses supporting and driving our economy. With more funding than ever available, and new tax reform laws in place, small business owners are optimistic about the future.
In fact, one study projects that 12 million more small businesses will be part of the U.S. landscape by 2026, for a total of 42 million. And maybe you intend to be one of them.
The harsh reality is that 20% of small businesses don’t last past the first year, and 50% will fizzle out before year five. Why? Lack of funding (or profitability). But with a bit of legwork, you can lay a solid foundation that can help ensure your success.
So whether you’re in the early brainstorming stages of your business, or ready to turn your garage dreams into a thriving company, there are some vital steps you should take to get your business moving forward and upward.
Get a lay of the land
Knowing how your industry is faring, and what it will look like in the near- and long-term is vital. If the industry has taken some hits lately, or it’s a saturated market, it might be a difficult time to get started—unless you have some major differentiator. But the good news is that a lot of industries, from auto repair shops and assisted living facilities to dental offices and self-storage businesses (and a lot more!) are booming.
Write a business plan
You’ll never get where you’re going if you don’t know where that is. A solid business plan can give you the upper hand as you navigate the ins and outs of a new business because it lays out every step (and contingency) for the road ahead. This will help keep you on track when the going gets tough, and give you a firm foundation as you seek to secure funding.
Know your financing options
While some people choose to bootstrap their way to the top, it’s not the easiest way by far. If you can’t envision spending the next few years sleeping on a couch and eating ramen to slowly fund your business, check out what types of loans are available for your industry. While banks have traditionally been hard on small businesses, the Small Business Association (SBA) offers loans specifically dedicated to small business owners and community development.
Connect with a lender who knows your industry
Once you begin exploring the financial landscape, connect with professionals who understand lending within your specific industry. Look for a track record of successes and referrals.
Apply for a Federal Employer Identification Number
Every business must have this 9-digit number, similar to a social security number, to identify their business to the IRS. It will also be used for tax reporting and administration purposes.
Set up shop
Purchase or lease your building, and outfit it for success. Purchase furniture and equipment and obtain whatever licenses or permits you may need to legally run your business. Some loans can help cover these costs.
Hire your team
Unless you’re running a one-man (or woman) show, you’re going to need an amazing team behind you. The right team can make or break your business, so make sure to hire people who believe in your vision and are passionate about executing it whether or not you’re standing there.
There’s no denying that the small business world is an exciting place to be. And with new technologies taking shape, and new policies that keep business owners in mind, launching a business (with the right foundation) just makes sense.