Business is booming. But, if you’re ready to become one of the millions of business owners in the United States, go in with a plan and know the wealth of resources at your fingertips.
The business ownership journey can play out in any number of ways, but what is almost always certain is that there will be uncertainty. I have spent much of my career focused on helping others achieve the American dream by gaining economic freedom through entrepreneurship. Whether it was during my time at the Latino Coalition or running my own business, I have had the opportunity to work with small business owners to ensure they gained access to valuable resources that would help them succeed. I am excited for the continued opportunity to provide education and guide small businesses.
1. Lay the foundation
As associate administrator of the Small Business Association’s (SBA) Office of Entrepreneurial Development, my goal is to help more people have the opportunity to live the American dream. That dream often begins with the basics of deciding the best legal structure to operate your business; ensuring you have the right licenses and permits at local, state and federal levels; and, making sure that you have adequate amounts and types of insurance (and possibly bonding) to protect you and your venture from liability. Once you have decided the legal structure of your business, it’s time to move on to your business plan.
2. Build a business model
Business plans come in all shapes and sizes, but one thing is clear: business owners who methodically plan — and plan in a way that they are able to change course quickly if things don’t go well — are much more likely to succeed. A tried and true comprehensive business plan, which takes you through the process of conducting market research, analyzing competitors, developing financial projections, etc., is the path most traveled for business owners.
Alternatively, a new approach used by many tech-based businesses (one that is spreading to Main Street ventures) is the use of a business model canvas, which is a tool that provokes the entrepreneur to produce a minimally viable product rooted in insight developed from talking to potential customers. No matter which business plan you go with, always remember that planning makes kings.
3. Determine viability
One of your biggest hurdles in the early stages of your business, especially during the first year, is to validate that you have a viable business model. A key tool to determine viability is a break even analysis, which is available on www.SBA.gov. Additionally, you may find help walking through the analysis at one of several community resource centers based around the country such as SCORE — a network of volunteer mentors who provide expert assistance; the Small Business Development Center (SBDC) — offices usually run by universities or community colleges that offer free business counseling and training; or the Women’s Business Center (WBC) — a center which offers services designed for the unique obstacles faced by women entrepreneurs. Do a break even analysis as early as possible, and update it regularly in your first year of operation.
4. Calculate capital needs
Additionally, startups often fail to understand their full capital needs. This can result in the entrepreneur running up personal debt as opposed to business debt. There are a variety of financing options available, so the entrepreneur should understand the various funding options before running up personal debt. SCORE, SBDCs and WBCs offer free advice to help the entrepreneur make well informed decisions on financing the business.
5. Reach out for help
To help your business launch, sustain, and scale, the SBA has a variety of in-person and virtual training and counselling resources available at no cost to entrepreneurs. In addition to our 68 district offices, staffed with specialists to help you achieve success, the SBA — through our Resource Partner Network — has more than 1,300 locations that provide support to business owners. The best way to navigate in-person resources is on www.SBA.gov. There you can find your nearest SCORE chapter, SBDC or WBC.
6. Revisit your roadmap
Business ownership is a journey, and the first year of operating a venture is full of challenges, road blocks, and the potential need to change course. Regularly visiting your roadmap in the first year and making key course corrections based on how the business is doing is of utmost importance.
One of our goals is to ensure that small business owners are aware of the counseling and training resources and other technical assistance provided for free or a low cost to business owners. My hope is that more people will have the confidence, skills, and resources they need to succeed as small business owners, and we can continue to revitalize a spirit of entrepreneurship in our country.