Small businesses are ‘stepping up’ in this economic environment: Wiederhorn
FAT Brands CEO Andy Wiederhorn joined "The Big Money Show" to discuss his company’s newest acquisition, Smokey Bones, as consumers and small businesses continue to fight inflation.
Millions of Americans have launched their own small businesses. In fact, there are a whopping 33.2 million small businesses in the country, according to the U.S. Chamber of Commerce's report released in April 2023.
Are you interested in joining the millions who have already stepped into the small business world?
If your answer is "yes," remember that operating a small business is a lot of work, and it requires a lot of your time and dedication in order to be successful.
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If you put in the work, your small business could turn into something that brings in significant income for you and your family.
Below are a few tips to help you get started.
If you have always wanted to start a small business, there's no better time than now to turn your dream into a reality. (iStock / iStock)
- Don't let the unknown stop you
- Talk to other small business owners
- Choose your small business
- Conduct research
- Considering funding
- Choose a business structure
- Choose a name for your business
- Write a business plan
- Register your business, and get paperwork in order
- Open a bank account dedicated to your business
- Start marketing your business
1. Don't let the unknown stop you
When you're just starting out with your small business, you're going to have a lot of questions. Not all of your questions will be answered before you begin.
Starting any kind of business is a learning process. You're bound to make mistakes that you'll learn from along the way.
Don't let the fear of not having every answer delay your start.
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"I would say a lot of it's about not being afraid," Liz Scott, co-executive director of Alex’s Lemonade Stand Foundation, previously told Fox Business regarding the launch of her nonprofit. "Fear shouldn't be the thing that stops you from doing something. It's a matter of talking to people who can advise you, who are willing to advise you, talking to people who are willing to help you because you can't do it alone. Whether you're doing it volunteer or paying staff, you cannot run an organization by yourself, even a small one. So, understanding your goals would be really important."
2. Talk to other small business owners
Finding answers to your questions can often be done with an online search, but there is even more value found in having a face-to-face or phone conversation with someone who has been through a similar experience.
Throughout your whole small business journey, talk with others who are also small business owners.
Communicating with others with similar aspirations can be extremely beneficial to your success.
Meeting up with fellow small business owners will give you valuable information about what you can expect when you start your own company. (iStock / iStock)
You can help each other by talking about successes, failures and ways you hope to grow. The more connections you have, the better.
3. Choose your small business
One of the earliest steps you'll need to take on this journey is deciding what kind of business you want to create.
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When making this decision, think about your skills and hobbies. What skills can you bring to a business? Are you good at advising others? Do you love to write? Are you a good builder? Do you excel in art? Are you an expert in web design? Are you a great photographer? Jot down all the skills you have, and think about how you can apply those to a business.
When choosing a small business idea, also think about what you enjoy. If you love working with animals, maybe a dog-walking company is a good idea. If you are very crafty, maybe you'll choose to sell your creations online through an Etsy shop. If you love taking photos, you can start a photography business.
While it's important to do something that you enjoy, you also want your business to be profitable. There is a lot of risk involved with small businesses, especially at the start.
When thinking about what you want your small business to be, consider your hobbies. Think of things you enjoy, such as cooking, and how you can turn that into a profit. (iStock / iStock)
You won't have a guaranteed steady income. One month, you could make a lot more than the average, but you could also have a bad month when sales are lower than you were expecting. This fluctuation can be even more prevalent if you have a seasonal business, where you are bound to make more money during certain months than others. However, you can also make a lot of money with your small business, and it can quickly grow into something bigger than you ever imagined it would be.
4. Conduct research
Conducting research is an important step to take in order to get a better understanding of your target market, competitors and general information about the business you are getting into.
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Think about what competitors you have. Are there a lot of people doing the same thing? Is there a strong need for the service you are providing? There has to be a balance of being unique and standing out against your competitors while also being practical. Your service or product has to be something that people want to spend their money on.
Think about who your target audience is and how you can appeal to them. Conduct as much research as you can in these beginning stages before you get too deep into your business. You'll want to have a strong understanding of the industry you're getting into before actually getting into it.
Thorough research will give you a better understanding of other small businesses that may be doing similar work that you are looking to do. (iStock / iStock)
5. Considering funding
How much money you need to get your business started will differ greatly depending on what the business is. For example, there are businesses that require very little to no money at all to get started. These businesses include things like dog walking, freelance writing, web designing, tutoring and babysitting.
On the other hand, there are many small businesses for which you will need considerable start-up capital. These include businesses like owning a food truck or buying real estate properties.
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Once you've established how much money you need to get started, you'll need to decide how you are going to raise those funds.
Maybe a family member will loan you the money you need to get started. Maybe you have the money you need put aside already, and you're going to dig into your personal funds to get it going.
You can also look into applying for a small business loan to get started.
Depending on the business, you may need a large sum of money to get started. (iStock / iStock)
6. Choose a business structure
You've made it through all the fun steps, and now it's time for more of the logistics. Once you know what your business is going to be, it's time to choose your business structure.
Some of the most common business structures from which to choose are sole proprietorships, partnerships, corporations and limited liability companies (LLCs).
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Conduct careful research on each of these structures, and determine what is right for you and your business.
Each of these has different requirements, costs and applications involved, so it's important to look into every one of your options.
7. Choose a name for your business
Your business is going to need a name, and a good one.
Choosing a name for your business is hard for two reasons. The first is that you'll have to get creative and think of something that will appeal to customers.
The second challenge is that once you land on a name you love, you'll have to make sure no other business already has the name. If they do, it's back to the drawing board.
When coming up with possible names for your business, don't fall too in love with your choice before ensuring that the name isn't already claimed by another company. (iStock / iStock)
When thinking of a name, don't choose something so abstract that no one knows what your business is by the name alone. Your name should make sense to your customers, and they should know the type of business you're running by your name.
At the same time, you don't want to pick a name that is too niche, because you want to leave wiggle room for your business to expand in the future under that same entity.
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Avoid names that are hard to spell or hard to say, and choose something that people will remember.
Keep it short and sweet, especially for the purpose of advertising. Think about how your name would appear on a web page, T-shirt or bumper sticker. If the name is too long, it will be really difficult to advertise successfully.
Choose something that people are going to remember. Don't pick a name that has people trying to recall it when they are telling a friend about your business.
When trying to come up with a name for your small business, it can be helpful to have a brainstorming session and write down everything you can possibly think of in a notebook. (iStock / iStock)
8. Write a business plan
When you are starting a business from the ground up, you'll want to draft a business plan.
A business plan serves many purposes, including stating the goals and objectives that you have for your company. Keeping a record of your goals will help you stay on track but also provide potential investors with an idea of what your company is.
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In your business plan, you'll also want to include things like your budget, competition, target audience, marketing strategy and mission statement. This document doesn't have to be perfect, and it can always be adjusted. What it should do is provide a comprehensive overview of your company and what it does.
9. Register your business, and get paperwork in order
The exact steps for registering your business will differ, depending on the business structure you choose and where you live.
You'll also want to think about preparing to pay taxes. This includes receiving a federal tax ID and Employee Identification Number – or EIN.
This is also a good time to apply for any licenses and permits you may need for your business. Again, this is very dependent on the type of business you are operating, but one example is that you may need a specific license, like a liquor license, if you are selling alcohol. You will likely need a mix of licenses, depending on your industry and location, so make sure to find out what exactly you need before getting started.
There are several different types of business insurance you can purchase to protect yourself and your company. (iStock / iStock)
You will also want to look into business insurance. There are several different types of business insurance you can choose from, depending on the industry you're in. General liability insurance is common for businesses that need minimal insurance coverage. There are also product liability insurance, professional liability insurance, commercial property insurance, workers' compensation insurance and auto liability insurance.
10. Open a bank account dedicated to your business
Open a bank account that is dedicated to your business.
This is where you will pull from to buy anything that is needed for your business, instead of using your personal finances. It will come in especially handy when tax season rolls around.
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You'll want to keep your business finances separate from your personal finances to keep things organized and avoid a headache later on.
11. Start marketing your business
Once all your paperwork is in order, it's back to the fun side of being a business owner. It's time to unveil your business to the public.
One of the best ways to do this is with a website. Make sure to include basic information like your company name, mission statement, services you provide or products you sell and ways to contact you.
Making a website for your business is a great way to spread the word about your company. (iStock / iStock)
You can also market your business through social media and by collaborating with others. If you are selling a product, consider giving it to people who can advertise it to their social media audience for you. Advertise on your own social media, and create a separate account dedicated to your business.
Another way to advertise is through word of mouth. Tell everyone about your business, and be confident in spreading the word.
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Advertising through clothing, bumper stickers, cups or accessories is another great way to get the word out. Create a standout logo that you can put on these products that will get people talking about your business.
