So you want to be your own boss? It’s a great goal, and plenty of small businesses out there prove it can be done. But how do you become a small business owner? It’s not as hard as you may think. In this blog post, we’ll outline the 10 easy steps to get you on your way to owning your own business. Follow these tips, and before you know it, you’ll be well on your way to entrepreneurship!
How to Become a Small Business Owner
Step 1- New Business Ideas
If you’ve ever dreamed of owning your own business, now is the time to take the plunge. Small businesses are the backbone of the American economy and account for more than half of all jobs in this country. And starting a small business is easier than you may think.
Many small business owners start out pondering the possibilities. As a business owner, you’re planning your own company. For you to find the self-motivation each day to be your own boss, your business idea needs to come from an industry you are passionate about and interested in.
Start by considering your soft skills and transferable skills.
Soft skills are the way your personality works, such as:
- Empathy
- Time management
- Organization
- Interpersonal connections
- Management abilities
Your transferable skills come from the positions you’ve held in the past. For example, suppose you’ve been a hairdresser for a franchise, and now you want to branch out and start your own business, owning a salon of independent stylists. In that case, you’ll use many transferable skills, such as your style sense, ability to interact well with customers, working with other stylists, product knowledge, etc.
Choosing your business type is crucial for success as a new business owner. Without choosing well, you’ll face many pain points related to your business type. In the business world, if you can’t make yourself do what you need to do to make things happen, you can go under.
So, talk with other business owners in the field you want to enter so that you fully understand what you’re starting before jumping in wholeheartedly.
Step 2- Research Your Market
The early days of starting a successful business begin by looking at your target market. If your chosen company has a target market of 10 to 20-year-olds, but you live in a retirement community with fewer than 2% of people younger than 65, you’re in trouble!
Most small business owners doing market research want to see the good and move forward with their plans. However, it’s wise to consider the market and make necessary adjustments before continuing with your plans.
Step 3- Write a Business Plan
As a burgeoning business owner, you will need a business model to make a profit. Your business model may be opening a retail store, a manufacturing plant, or an online fee-for-service.
First, consider the products or services you plan to sell, your target markets, and any anticipated expenses. Your pricing point is an important consideration. Pricing too low can cause you to lose profit, while pricing too high can leave you without customers.
However, you also must consider your costs:
- Will you pay rent every month?
- How much will your products cost to make or buy?
- Will there be shipping costs?
- What about marketing costs?
- Employee paychecks?
Writing up business plans can help you consider all aspects of how your business will run. Talking with a local business attorney can help you consider all factors of your plans. Starting a successful small business involves knowing when to find professional help.
Step 4- Business Structure Considerations
You can choose from several legal structure types as a business owner. A sole proprietorship is owned by one person who sells and profits alone. Sole proprietorships are a typical arrangement in North Carolina. General partnerships are also common. When two individuals work together to make a profit together, the state automatically considers their business a general partnership.
However, other business structures offer more financial protection. Many small business owners worry about personal liability, so they start a limited liability company. Limited liability companies keep your personal assets safe if someone sues your company — so you don’t need to worry about losing your house over a business arrangement!
Forming an LLC in North Carolina is relatively straightforward, yet creating a comprehensive operating agreement can be highly beneficial. Although it is not legally required for formation, drafting one may prove to be invaluable down the road.
Although there is no rule for the elements of an operating agreement, it normally encompasses protocols for business meetings, needed capital contributions from each member, and the allocation method for profits and losses. Additionally, filing this document with the state is not mandatory.
As an LLC, for tax purposes, you’ll need to pay Federal taxes as a sole proprietorship, a partnership, or as an S Corp. Paying taxes as a business is another issue where a business attorney can help you make the best decision.
Step 5- Business Location
Whether you choose to operate an online or a brick-and-mortar business, you’ll need to consider how customers will find you.
Consider how much space you need for your business and how much rent you’re comfortable paying. Additionally, research the local area to ensure your business will succeed in its location.
Step 6- Money
You’ll need money to start and manage your small business. Depending on your financial situation, you may use personal funds or loans from banks or private investors.
Funding options for small businesses can vary greatly. Different funding sources may be available to you depending on how much capital you need, how quickly you need it, and how much risk you are willing to take.
Venture capital is a form of equity financing used by small business owners to fund their start-up or expansion costs. It is typically provided by venture capital firms specializing in investing in early-stage companies. Venture capitalists (VCs) look for high-growth potential businesses and usually provide funding for seed, early-stage, and later-stage companies.
Personal funds are one of the most common funding sources for small businesses. This could include savings from a previous job or borrowing from family or friends.
Banks and other lenders can also provide funding sources for small businesses. Banks commonly offer lines of credit, term loans, and short-term loans for business owners to borrow against as needed.
Step 7- Marketing Strategy
Developing a marketing plan is an integral part of every successful business. Your marketing plan should include how you will reach potential customers, how you will differentiate yourself from your competitors, and how you will maintain customer loyalty.
Your target customers will make up your customer base and help you find a competitive advantage, so your sales strategy should focus on them.
With careful use of email marketing campaigns, you can reach your customer base and do well! A marketing campaign is simply a collection of emails designed to help your client base contact you or buy a product.
Don’t forget to use a digital marketing agency to help create a website and develop your search engine optimization (SEO). SEO helps your business get found online!
Marketing strategies should also consider how much you are willing to spend on advertising and other promotional costs. Consider how you will use social media to promote your products or services.
Successful small business owners also consider how to develop their business name using marketing strategies. Your business name should be catchy, easy to remember, and clearly describe what your business offers.
Step 8- Becoming Legit
You’ll need to register your business by getting a tax ID called an EIN (Employer Identification Number). An EIN is like a business social security number so that the IRS recognizes your business for tax purposes.
Applying for an EIN is simple and free. You can go to the IRS.gov site to apply online. After the IRS finishes validating your application, you’ll receive your EIN immediately.
You’ll need to file your new business with the Secretary of State and then register with the state for taxes. Finally, you’ll pay taxes through the NCDOR site.
If you hire new employees, you’ll need to give them a W-4 and do your payroll through the Secretary of State site.
According to the Small Business Association, you may also need to file for licenses and permits with the Feds and the state. Find a list of what you may need in North Carolina:
Step 9- Small Business Owners and Networking
Many business owners start out unsure how their business will get off on the right foot. However, as time goes by, most successful business owners agree that no one can do it alone. It’s crucial to have others you can depend on and let others rely on you.
Networking and forming relationships with other business owners, industry professionals, and potential customers can be invaluable to any small business.
Step 10- Know When You Need Help
Becoming a small business requires eventually finding a work-life balance and living with business ownership as a way of life. However, circumstances change, and you may need to change with the market to stay solvent as a business owner.
When becoming a business owner, working with a local business attorney you trust can help you get started but also help you find your way as you go through different legal issues such as contract or employee disagreements.
Ensuring your legal ducks are in a row can mean the difference between losing your business to a tort lawsuit or sailing through without a scratch.
Our Experienced Business Attorneys Can Help
Protect your business and mitigate potential losses with North Carolina business attorneys on your side! At Hopler, Wilms, and Hanna, we provide experienced small business legal advice to help you get started!
Our corporate attorneys can help you during the start-up phase of your business or with contract negotiation and dispute resolution.
Don’t let a legal issue sink your business before it takes off. Get in touch with our knowledgeable attorneys today to get started on the path to success. Get in touch today and find out how we can help!