How to Start a Small Business: 5 Tips for Small Business Success

Starting a small business is challenging, but rewarding and includes many perks if you set yourself up for success. The first step in starting a small business off on the right foot involves establishing plan that works for you. When starting a small business, consider the following tips to set yourself up for success:

TIP #1 - Identify your strengths and weaknesses

Every small business owner comes to the table with a personal set of skills, whether they are recognized or not. The most crucial aspect of identifying strengths and weaknesses has to do with taking the time to recognize both. Understanding where we shine is helpful as you know where you tend to stand out. It is common for business owners to wear more than one hat. That’s why it’s important to keep in mind where you are strongest and also uncover your weak points. In order to cover all of the bases, you will need to learn how to juggle roles based upon capitalizing on strengths and minimizing weaknesses.

If you are exceptionally personable and strike up conversations easily, this will come in handy when establishing rapport with customers. Do you tend to shy away from people? Understanding this tendency will help in hiring staff to fill in for you when the time comes to build relationships. Hiring to fill in gaps is essential to success. Having a team that balances your strengths and weaknesses will ensure you cover all bases and allow the business the right amount of support.

In addition, if you struggle managing accounting or staying on top of scheduling, hiring the right people to fill in these roles will ensure success. Every business owner needs to recognize talents and strong points, while also accounting for weaknesses to prevent unwanted mishaps and to also establish processes that focus attention on building up weak points.

Investment in training or development programs may be helpful for growth as well. Don’t be afraid to learn how to handle new responsibilities and workloads. Running a successful business requires personal growth. In addition to investing in personal growth, taking advantage of networks can be beneficial. It’s important to ask for support and involving business partners, family members, employees, independent contractors and others to address major needs and make sure important concerns are handled successfully.

TIP #2 - Write a Solid Business Plan

Every successful small business starts with a developed business plan. Writing up a business plan is the first step in outlining the big picture, along with detailed steps and processes, including business goals, product and service descriptions, to developing the numbers to outline actual costs and long-term projections. A business plan is a document that outlines the business’s financial goals and explains exactly what steps will be implemented to achieve them. A strong, detailed business plan provides a road map for the business’s first three to five years. The business plan can also be shared with potential investors, lenders or other important partners.

Recognizing potential competition and barriers to entry are also a critical component of setting up a successful business. At the planning stages, resources and support can be identified before taking big risks. In addition, there are many helpful and free resources available for writing a small business plan. Knowing the steps and concepts involved before making any drafts can also save time and resources.

Most resources identify a few common criteria in a successful business plan. The first point is writing an executive summary. The executive summary is the first page of your business plan. Think of the executive summary as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans. Although the executive summary is the first thing potential investors will read, it can be easier to write it as the last step. Saving this for the end will help you highlight information that you already identified while writing other sections that go into more detail.

The second point is describing the small business. Your small business description should contain information like: the business’s registered name, the address of your small business, names of key people in the small business, along with highlighting unique skills or technical expertise shared between members of your team. Your company description should also define your small business structure. This structure may include sole proprietorship, partnership or corporation. This section should also include the percent ownership that each owner has and the extent of each owner’s involvement in the company. Finally, this section should cover the history of your small business and the nature of your small business, which prepares the reader to learn about your small business goals in the next section.

The third point is describing the small business includes an objective statement. This section spells out exactly what you’d like the small business to accomplish, both in the short-term and over the long-term. If you’re looking for small business funding, or sourcing outside investment, this section can include explanation of the need for the funds, which also describes how the financing will help the small business grow, and how future growth targets will be achieved. The key to this section is to provide clear explanations of the opportunity presented for investors and how the investment will contribute to growing the small business. For example, if your the small business is launching a new product line or service, you might explain how the funding will help the small business launch the new product and how much sales are projected to increase over the next few years as a result.

The fourth point of the business plan includes describe the products and services offered by the small business. In this section, going into specific detail about the products or services offered, or planned to be offered is critical. The plan should include the following: an explanation of how your product or service works, the applicable pricing model for the product or service, the typical customers you served, the supply chain and order fulfillment strategy, the sales strategy, the distribution strategy, and also discuss current or pending trademarks and patents associated with the product or service.

The fifth point in the business plan should include market research. Lenders and potential investors want to know what sets the service or product offerings apart from the competition. In the market analysis section, it’s important to explain the competition. Discuss what competitors do well, and point out what your small business will do better. If you’re serving a unique or underserved market, explain the details of the market.

The sixth point in the business plan should include the marketing and sales plan. This section addresses how customers will be marketed to buy the products or services, along with how customer loyalty will be developed, which will lead to repeat business.

The seventh point in the business plan should include the financial analysis. If the business is brand new, there may not be concrete information on your business financials. However, if the small business has been an existing business, it is important to include income and profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement, which reflects how cash comes in and goes out of the small business. To complete a comprehensive financial analysis, you may want to include metrics such as: the net profit margin, current ratio, and accounts receivable turnover ratio. The net profit margin includes the percentage of revenue that is maintained as net income. The current ratio includes the measurement of liquidity and the ability to repay debt. The accounts receivable turnover ratio includes a measurement of the frequency of collecting on receivables annually. This is a great section to include pie charts and graphs in order to boost the visual engagement and readability and to really showcase the financial health of the small business.

The eighth point in the business plan should include financial projections. This is the most critical part of the small business plan if you intend to seek bank financing or investors. This section outlines exactly how the small business will generate substantial profits to both repay the loan, and to reinvest into the business for longevity, and also how the small business will earn a return for investors.
This is also the section where the small business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period will be presented, along with the future numbers based upon receipt of investment capital to grow. This section of the small business plan requires accuracy in the numbers. Carefully analyze bank records and past financial statements for accuracy, along with requesting a few others to preview the plan, in order to catch any errors, is essential. The projections should be accurate but also realistic.

The ninth point in the business plan should include an appendix to list any supporting documents or materials needed to substantiate the small business plan, including resumes of owner or employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is lengthy, adding a table of contents at the beginning of this section would be helpful for those reading to quickly and easily access and refer back to the information.

TIP #3 - Select The Right Small Business & Industry

Owning a successful small business is challenging, yet much more rewarding when the type of business is interesting, suited to your personality, and may even inspire passion. Having a passion for the small business doesn’t necessarily mean it’s an all-time favorite activity, or checks a bucket list item, but enjoying enough can make the process much more enjoyable.

When determining what type of small business to start, consider something that exists, interests, and even motivates you to invest time and resources. If the business is not new, consider how investing in new resources or launching a new product or service may inspire more passion. Does serving the public with a trendy new product, or launching a cutting edge technology inspire you? Possibly solving a problem in the market? Either way, uncovering the right services or products, or serving an industry in general, may be exactly what is needed to keep the fires burning long after the initial excitement wears off.

TIP #4 - Identify the Target Customer and Demographic

When staring a small business, the first thing to do is determine who the target customers are. The term “target customer” refers to the specific audience a small business wants to engage with to help plan marketing efforts. Target customers are most likely going to buy the products or services provided by the small business, if they find them through one of your marketing efforts.

When targeting the ideal customer, here’s a hint: the target market does not include “everyone” that may possibly use the product or benefit from the service. To target the right demographic, one of the best methods is to look at the popularity of your products or service. Who uses the product already? Who needs the service?
The task in defining a target customer is to identify and understand who the ideal customer is. It may seem simple to target the ideal customer, yet, sometimes making assumptions focuses on the wrong people.

Many different types of data may be used to determine a target audience, including: demographics such as age and gender identification, or specific values, or behaviors such as “likely to buy online” or likely to “purchase for family members.” Narrowing down these criteria will help identify who the target customer is. Essentially, the success rate of every small business’ marketing and sales efforts will depend on knowing who the target customers are.

Knowing the target market and ideal customer improves a small business’ marketing and advertising efforts since they may utilize resources more wisely and also save time without investing excessive or costly advertising. Investing in advertising which targets the ideal customers helps a small business identify and reach its ideal customers much more cost effectively.

A few steps to identifying the right customers involve having conversations with as many different customers as possible to identify specifics about existing customers and potential customers to find out more. Asking questions about what they appreciate about their favorite products and services also contributes to understanding more about what they value. Analyzing this feedback will help to uncover the popularity and value of the products and services they are most interested in. You may learn more about how to leverage marketing efforts to target the right people.

TIP #5 - Ask for Help & Support

Even when a small business is running well and on the right track, unexpected issues may arise, offering opportunities for growth and improvement. Reaching out to other business owners or mentors for advice, provides opportunities not only for short-term problem solving, but also for long-term strategizing. Listening to how other business owners, or consultants, approach their day-to-day operations, or even their personal lives, can offer simple steps and strategies that are new, or may contribute to re-thinking business activities for a much more beneficial bottom line outcome. One critical step in successful business ownership is being open to growth and change. As a business owner, the journey toward success is continuous. While many aspects contribute to the growth and prosperity of a business, one often overlooked but critical factor is self-improvement. Personal growth a fundamental element that can significantly impact the success of a business owner. Self-development plays a pivotal role in enhancing both management and leadership skills. These skills are essential for creating a positive work environment, building strong teams, and ultimately, achieving business objectives.

ABOUT OREGON ATM

Oregon ATM has been active in the ATM and payment industries for over 15 years. As a local, family owned business, we genuinely care about our clients, and we understand the laws and complexities around banking and payments, which are constantly shifting, changing and updating.

We are not only well-versed in existing regulations, but also stay actively involved in keeping up with regulations. Our experience provides our clients peace of mind with knowledge they can trust, so they can save valuable time and spend resources focused on growing their own businesses.

We understand that in the current market, it’s crucial for all businesses to have access to cash solutions – and that makes reliable ATM services an important part of operating your business. Oregon ATM helps business explore the ATM services to support their business goals. Whether a business is exploring ATM solutions, looking to buy, lease or profit-share, Oregon ATM works alongside business owners to help find the  ATM solutions that makes the most sense for a specific business. In addition, Oregon ATM has access to any brand of ATM, which provides businesses added flexibility and resources best suited to the business needs.