Steps to Starting a Small Business

On this page you will find the six steps to starting a small business, where to start and what to do to develop your desire to start a small business into a viable business operation!

Step One - Find the Right Business Idea

The first thing you need is a business idea that can work for you!

Some people, when they get bitten by the entrepreneurial bug, know exactly what they want to do. Many, many others though, have no idea at all. They just know that they want to own their own small business.

Do you know what is your business going to be?

If you need a bit of help working it all out, check out my page on generating business ideas!

Once you have a general idea of what your new business is going to be, you will need to further develop that idea into a viable business model.

So what is a business model?

Simply put, a business model describes what problem a business intends to solve or the value that will be provided for customers and how it will do so profitably. In the first instance, a business model is a clear concise statement of what your business intends to do.

But it is much more than that.

Your business model defines your business. It describes what your business will provide (goods and or services), and it specifies who your customers will be and why they buy from you. It also outlines the methods you intend to use to sell to those customers.

In your enthusiasm to get started you may be tempted to skip this step - DON'T - business models matter!.

By working your way through the process of developing your business model, you will gain a far better understanding of of what you are trying to achieve and how to go about it!

Step Two - Build or Buy?

At this stage you will also investigate the various start-up options that are available to you. Will you be starting your business from scratch, or would you prefer to buy an existing business? Or perhaps there already a franchise available that matches your business idea?

Step Three - Develop a Business Plan

Step two in the process of starting a small business is to develop a small business plan.

No matter who you go to for advice, they will recommend that you put a lot of time and effort into your business plan but unless they need external financing (in my experience at least) very few first-time entrepreneurs do.

Step Four - Secure Your Small Business Financing

Before you begin the process of sourcing your small business financing, you are going to need to work out how much money you are going to need!

Once you have a realistic idea of how much financing you need (i.e. total business cost less your own investment), you can begin to work out where you might be able to source your funding.

Basically there are two types of financing, debt and equity. Debt is where you borrow the money and it is repaid over time, plus interest. Equity financing is where you give the person offering up the cash a slice of your business in exchange.

Depending on the type of business you intend to start and your own personal credit history, funding for your small business may be available from a variety of sources.

Step Five - Setting Up the Business

Setting up your business includes locating premises, sourcing your inventory, getting your marketing plan into action and generally preparing to open the doors.

But it also includes the less exciting tasks to dot the i's and crossing the t's, like finalising your business identity, like choosing a business name and developing your promotional materials.

Before you open the doors you will also have to select and set up the legal structure for your business, and satisfy any legal requirements for the type of business you are proposing (tax, business permits or registration with governing bodies etc).

After all that, you still have to set up your internal business systems (record keeping, inventory management, phone systems, banking etc).

Step Six - Open the Doors

The big day is approaching!

You have your funding in place, the store (or office, or factory) is stocked, you have started your marketing program and you are ready to welcome your first customers. So what now?

Return to top of Steps to Starting a Small Business

Return to the How to Start a Small Business Homepage