If you’ve considered opening a small business, we’ve got a good feeling that 2024 is your year. Despite worries over inflation and high-interest rates, the U.S. economy continues to grow.
And while entrepreneurs are concerned with inflation (78%), interest rates (65%), and commodities prices (63%), there’s still good news to be had. Sixty-six per cent of small businesses in the U.S. are currently profitable, and 76% feel that they’ll continue to stay open and profitable through the current socio-economic situation. If that’s the inspiration you’ve been looking for, well, you’ve come to the right place.
Starting a successful business in 2024 is about starting on the right foot. With the seven steps we’re sharing, you’ll have everything you need to get your business off the ground and on its way to becoming profitable.
What’s a good small business to start in 2024?
When you’re thinking about what kind of business to start, you need to consider about two main factors:
If you can solve a problem for people while doing something that you enjoy, you’ve found the perfect recipe for a successful business. Of course, having a great idea and passion for your business is the ideal place to start—but where do you go from there?
What do you need to start a small business?
Whether you’re opening a brick-and-mortar retail store or a service-based business, all businesses need to start at the same place. Taking time at the beginning to get all of your ducks in a row is the best way to build a solid foundation and will help you ensure your business will survive long term.
No matter what kind of business you’re thinking of, when you’re starting out, there are some basic things you’ll need to get started.
Important things to think about:
How to start your small business in 7 steps
Every business is different, that’s for sure. But there are some things that every business will need to do to get started. These seven actionable steps will help you start your next small business.
Step 1: Clarify your business idea
If you’ve decided you want to start a new business, but you still need to figure out what that business should be, brainstorming business ideas is the best place to start.
As mentioned above, finding something you’re passionate about that also fills a need in the market is a great starting point for any business. The final element is something that you can monetize. You may be passionate about books but aren’t a great writer. So, you pivot to opening a bookstore… One problem: your small town already has two independent bookstores. The solution? You decide to open a bookstore in another town. Now, you’ve found something you’re passionate about that fills a need and is profitable.
If you don’t have a set idea of what kind of small business you want to open, try answering a few of these questions:
The answers to these questions can show you where to focus your business. And if you already have a business idea, these answers can help you expand on that idea. Whatever idea you have, always ask yourself if it’s something that’s needed and if you’re good at it.
Step 2: Conduct market research
A critical step in starting any business is market research.
Market research shows whether your idea can become a profitable, successful business. It gives you insights into how your business will perform and can help mitigate some risks associated with starting a new small business.
Market research is made up of two types of research, primary and secondary information:
While gathering primary information is more time-consuming and expensive than secondary information, the best market research uses both primary and secondary information.
Market research helps your business in a variety of ways:
Step 3: Create a business plan
Now that you’ve tested your idea through market research, it’s time to take everything you’ve learned and create a business plan.
A business plan is a written document that defines your business and outlines your business strategy, future goals, and how you plan to reach those goals. Think of your business plan as the map that’ll get you from Day 1 to Day 1,438 as a business owner.
Every business should have a business plan. A lot of people assume that business plans are only for those looking for outside funding from investors or a bank. But every business can benefit from a business plan—it can help you expand on your business idea and uncover any potential issues you may have overlooked. Even if you’re not starting out, but say, looking at a second location, a business plan is an important step to validate your decisions.
Business plan essentials
Every business plan is different, but you can feel confident that you’ve created a well-rounded business plan if you include the following sections:
Step 4: Finance your small business
Now that all your ideas are on paper, it’s time to think about how you’ll finance your small business. Depending on the type of business you’re opening, you may be looking at anywhere from a few thousand dollars to a few hundred thousand dollars to get started. The average cost for a small business to start and run for their first full year is $40,000.
No matter what your start-up costs are projected to be, don’t let this stop you yet. There are lots of funding options available to small businesses, including:
Step 5: Decide on your business structure
Choosing a business structure isn’t a decision that should be made lightly. How you structure your business will affect the tax you owe, your daily operations, and the personal risk you assume, and may have other legal implications down the road.
Here’s a rundown of the most common business structures:
Sole proprietorship is the most common business structure for solo entrepreneurs. In this business structure, the company and the owner are considered the same. Therefore, if the business fails, the owner is personally responsible for all business debts.
Partnerships are used when starting a business with more than one individual. A partnership requires a partnership agreement, and partners have limited liability for the debts of the LLP.
Limited liability companies or LLCs can be owned by one or more people/companies and limit your personal liability for business debts. They’re one of the easiest business structures to establish.
Cooperatives are businesses or organizations that run to benefit those using the services. Industries that fall into this category include, but aren’t limited to, health care, retail, restaurants, and agriculture.
Corporations are more complex from a legal and tax point of view. Because of this, they’re more common in larger companies but can still be used by small businesses.
Consider speaking with a lawyer or accountant before deciding to ensure you’re making the best decision for your business.
Step 6: Dig into the legal must-haves
It’s important to dot your i’s and cross your t’s when it comes to the legal ins and outs of a small business. And there are a lot of i’s and t’s to keep track of. When you’re starting a new small business, make sure you have the following in order before you begin operating:
Step 7: Get the right tools to run your small business
Finding the right tools to run your small business is key to helping your business run smoothly. The right business tools will save you time and money and make you a desirable employer. The tools you need will depend on your small business, but looking for tools that automate repetitive tasks and lessen your workload is a great place to start.
With Homebase, you get everything you need to take control of your business. Designed for hourly work, Homebase will help you schedule your team, track their hours, and run payroll seamlessly. You’ll also have a team communication app that keeps you and your employees on the same page. Homebase even has expert H.R. guidance to help you comply with government regulations without an in-house H.R. team.
Homebase is the all-in-one management app that simplifies running your small business. Get started now for free.
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Joseph Odierno Buffalo
Joseph C. Odierno of Buffalo New York is a passionate individual working in debt collection.