3 Ways to Secure a Small Business

Starting a business is a compelling prospect, as it offers small business owners the chance of a lifetime. Owning a successful business represents total financial freedom. However, this is only after the business is tested and assuming that the owner can overcome the trials and tribulations of the first year of operation. Many businesses are forced to close their doors within the first year, and that means a small business owner needs to come prepared and give their all to see success in this time. Here’s what you need to know.

Financing a New Business

Starting a company is expensive, and that serves as a major barrier to entry to many. However, there are means by which a potential business owner can acquire financial assistance from other parties in order to open their doors. Procuring early stage venture capital is an essential part of starting a new business for all but the wealthy, and there are a few ways to accomplish this. Investors are able to finance your business, but there is a cost to taking this route. Investors are typically successful business people in their own right, and they seek to increase their wealth by investing in the growth of small businesses. This often takes the form of taking ownership of a percentage of the fledgling company in addition to receiving a return on their investment via repayment with interest. On the other hand, business loans provided a similar service without the additional price of partial ownership of your company. However, investors often have invaluable experience that gives them extra clout that can figure into the equation.

Planning a New Business

Before a business owner can acquire funding, they’ll need to develop a cogent proposal for investors and loan officers, and that means developing a comprehensive plan for your business. This will then continue to be the blueprint by which your business is built and how it operates moving forward, so it is essential that the plan is thorough. Developing a business plan is a matter of addressing a few key factors. Your target market and demographics need to dictate much of the rest of the plan, for example. Your target market is a direct result of the type of business you’ll be operating, and your demographics will come as a direct result of that, as well. Demographics, however, are more specific and numerous, as they represent various groups of people who potentially have interest in what your business has to offer. These factors influence your company’s marketing strategies by allowing you to tailor marketing to the groups who have built-in interest.

Supplying a New Business

Businesses of all kinds need supplies, and this is even more true in cases of retail in which those supplies are also the product being sold. Therefore, a reliable and cost effective supply chain is the lifeblood of a business. The size and shape of a supply chain is subject to change based on numerous factors, but the average supply chain entails manufacturers, distributors, and retailers. The products involved increase in cost and value as you get further into the chain, so a thrifty business owner can choose to buy directly from manufacturers. However, most companies depend on the value added by distributors and will pay extra for that additional value. You’ll need to find the right fit for your business model, and that depends not only on cost, but also on reliability. You’ll also need to be reliable yourself, as you’ll need to keep accurate records of your inventory in order to place orders for additional shipments ahead of time.

Small businesses face many obstacles, but there are many proven methods of working around these obstacles. Securing funding, planning your business thoroughly, and keeping your fledgling stocked are essential to surviving the first year of operation. Using these tips, you can give yourself the best possible starting point from which to triumph over the first year and grow into a successful company.