Most people at one point of time in life experience the urge to start a small business. However, it is not surprising that only a few of these businesses become successful in the long run. The main reason behind this is that most people are not able to translate their passion into a successful business; passion being just one of the ingredients in a successful business but not the only one. With the advent of new and cheaper modes of communication and information dissemination, it has become easier to establish new businesses even at a much smaller and manageable scale. The following steps should be taken into consideration while establishing a small business.
Identify the reason for starting the business
There are many reasons why people want to start a business. Some people are passionate about a certain art or activity such as handicraft, sports, electronics etc. and want to incorporate it as part of their work life. Some others are attracted towards a work life in which they can call all the shots and want to experience the excitement provided by entrepreneurship. Sometimes, a lucrative opportunity is enough to lure individuals into starting a small business. There may be myriad other reasons but it is important to identify, analyze and understand the underlying reason for starting the business to ensure longevity, success and satisfaction.
Identify the business area
Identification of the business area is not as simple as it sounds. This is in fact one of the most important steps in starting a small business and considerable amount of time should be invested in this phase. A person may be passionate about an art such as painting, but that does not mean that the person should necessarily have the talent of an artist and become one in due course. Setting up an art gallery, managing exhibitions and events, identifying and nurturing talent can all be areas of business that can be lucrative.
Prepare a business plan
The next step in setting up a small business is preparing a proper business plan and getting it critically evaluated by experienced professionals within the industry as well as those outside. The plan should be properly detailed and should cover all bases such as product or service proposition, market & competition analysis, organization structure, marketing & advertising strategy, investment plan, financial projections and growth strategy. The plan should be realistic and should not be academic in nature. The purpose is to critically evaluate the business and make modifications for increasing the chances of success.
Implement the business plan
The small business can then be incorporated as a proprietorship or partnership or any other form that is suitable to the long term goal as well as mode of operation. It is important to understand and conform to the laws that govern the establishment and operations of the firm. Guidelines included in the business plan should be followed while running the business, at least in the early stages. Implementation may throw up new problems time and again. Therefore, it is imperative that the small business be flexible and capable of adapting according to the needs that arise.
It is important for people to view their small business ventures from an outside perspective as well. Often people tend to micro manage activities in a manner that it becomes detrimental to the business itself. The key to success is a balance between passion driving the business and managing operations in a dispassionate manner. This is crucial for the growth of the employees and partners as well as for the organization as a whole.