It goes something like this: You have a great idea and believe you have what it takes to start a successful small business. But as you start to get into the process, you realize that it takes more than meets the eye to get your idea off the ground. You never thought starting a small business would be this hard. Why is it so complicated?
Starting a small business can be harder than people expect. The U.S. Bureau of Labor Statistics estimates that about one in five small businesses survive the first year. Starting a small business can be risky, but if it works out, it can be a worthwhile endeavor.
Morvalyn Bowen, a professor of business administration at Bethel University, has extensive experience in the field as an entrepreneurial consultant, professor, and textbook author. We spoke to Bowen about his thoughts on how to start a small business.
Here are Bowen's four tips for future small business owners getting started on their path to success.
Research the market
A feasibility study is something a prospective small business owner does to see if their business idea is viable. It's sometimes seen as the tedious part of starting a small business, but Bowen says this step is crucial. “Find out if there's actually a market for your product or service,” Bowen says.
Prospective small business owners typically consider questions about their business operations, such as the nature and location of their business. “Are we going to be an online small business or a brick-and-mortar operation? These are good questions to ask in the planning stages,” says Bowen. They also research their competitors to see what the environment is like for the services they want to offer.
Create a business plan
Once a prospective small business owner has thoroughly researched their market and competitors, they can create a business plan for their small business. Bowen says a solid business plan includes not only goals but also operational and financial projections.
One of the best tools a future small business owner has is flexibility. “Sometimes things happen that are outside of your control,” she says. Even the most well-laid plans can change, and small business owners who aren't prepared for this can easily lose confidence and become overwhelmed. To avoid this, Bowen advises aspiring small business owners to set goals that are SMART (specific, measurable, achievable, realistic, and timely).
Comply with the law
Another aspect of running a business is complying with federal, state, and county laws. Prospective small business owners need to make sure their business has a legal structure in place. Whether registering as a sole proprietor or a limited liability company (LLC), small business owners will need to apply for the necessary permits and licenses. “Never neglect the legal aspects of running a business,” says Bowen. “You're going to get penalized eventually, so make sure you do it right the first time.” Asking for help is a great way for prospective small business owners to ensure they're well-prepared.
Get out there and make connections
Never underestimate the power of networking. Funding and capital are crucial factors in helping small businesses survive the financial challenges of the first year. “Meet new people and talk about your small business,” says Bowen. Spreading the word makes it easier for others with similar interests to find your small business. Networking events at college alumni associations or local chambers of commerce are great places to talk to potential investors and rally support for your new small business.
everything's going to be okay
Sometimes, the fear that things will go wrong holds aspiring small business owners back from taking risks. Bowen believes aspiring small business owners can overcome the fear of failure by changing their mindset. Failure is a natural part of the process, and turning failure into an opportunity takes perseverance. Staying informed and taking small, calculated risks helps aspiring small business owners build their confidence.
Finally, aspiring small business owners should practice good self-care: eating healthy, getting enough sleep, and exercising are all good ways to reduce stress and keep a clear mind as you go through the process of starting a small business.
Becoming business savvy doesn't have to be a difficult process. At Bethel University, you can embark on your entrepreneurial journey with the guidance of experienced professors. Explore the intersection of business and your values, develop your talents, and learn how to use the tools of business to make a difference in your community and the world. Explore Bethel's undergraduate business degrees, adult undergraduate options, and MBA programs.
