It goes like this—you have a winner of an idea and you believe you have what it takes to start a successful small business. But as you begin engaging in the process, you realize that there is more than meets the eye to get your ideas off the ground. You didn’t think it would be this hard to start a small business. Why is it this complicated?
Starting a small business can be more difficult than people expect. The U.S. Bureau of Labor and Statistics estimates that about 1 in 5 small businesses survive their first year. Even though starting a small business can be risky, it is a worthy pursuit when done well.
Bethel professor of business Mauvalyn Bowen has extensive experience in entrepreneurship as a consultant, professor, and textbook author on the subject. We spoke with Bowen to get her take on how to start a small business.
Here are four tips Bowen suggests for future small business owners as they embark on their journey to success.
Research the market
Feasibility studies are what prudent future small business owners carry out to see if their business ideas are feasible. This can sometimes be perceived as the boring part of starting a small business, but Bowen states that this step is crucial. “Find out if there is an actual market for your product or service,” Bowen says.
Future small business owners typically consider questions on operations such as the nature and location of the business. “Will you be a small business online or in a physical location? This is a good question to ask in the planning phase,” Bowen says. They also research their competition to see what the climate for the services they want to provide are like.
Create a business plan
Once a future small business owner has scoped out the market and competition, now they can come up with a business plan for their small business. Bowen says that a solid business plan includes goals, as well as operational and financial projections.
One of the best tools in a future small business owner’s toolbox is flexibility. “Sometimes things happen that are outside of your control,” she says. Even the most meticulous plans can change and small business owners who are not prepare for this easily lose confidence and feel overwhelmed. To avoid this, Bowen advises aspiring small business owners to set goals that are SMART: specific, measurable, attainable, realistic and timely.
Be in compliance with the law
Another aspect of running a business is maintaining compliance with federal, state, and county laws. Future small business owners will need to ensure that there is a legal structure in place for their business. Whether it is registering for sole proprietorship or a limited liability company (LLC), small business owners will need to apply for the required permits and licensing. “Never slack on the legality aspect of running a business,” Bowen says. “It will catch up with you eventually, so make sure to get it right the first time.” Asking for help is a great way a future small business owner can ensure that all their bases are covered.
Get out and make connections
Never underestimate the power of networking. Funding and capital are very important elements to ensure that a small business can weather any financial challenges of the first year. “Meet new people and talk about your small business,” Bowen says. Getting the word out helps others with similar interest discover your small business. Networking events at college alumni gatherings and local chambers of commerce are a great place to speak with potential investors, as well as drum up support for your new small business.
Everything is going to be alright
Sometimes the fear of things going wrong deters aspiring small business owners from taking risks. Bowen believes that aspiring small business owners can overcome fear of failure by shifting their mindset. Failure is a natural part of the process, and it takes grit to turn a failure into an opportunity. Staying informed and taking small, calculated risks can help aspiring small business owners build confidence.
Finally, an aspiring small business owner should engage in appropriate selfcare. Eating well, getting enough sleep, and exercising are all good ways to reduce stress and keep a clear mind while navigating the process of starting a small business.
Becoming business savvy does not have to be a difficult process. At Bethel University, you can grow in your entrepreneurship journey under the guidance of experienced professors. Explore the intersection of business and your values, develop your talents, and learn to use the tools of business to make a difference in your communities and our world. Explore Bethel’s undergrad business degrees, adult undergrad options, and MBA program.