Starting a business is not for the faint of heart. Of all the people who dream of being their own boss, only a few get as far as filing a tax form for an LLC. When you search online for tips on how to face the challenge of starting a business, you would often find plethora of articles and posts on how important it is to take a high degree of risk when launching a new business. Lots of entrepreneurship advice takes the position that any entrepreneur who is the slightest bit risk averse is a chump. For most real-world business owners though, the key is to start small.
Take baby steps – Start SMALL
The early steps to forming an LLC or corporation are remarkably simple. Establishing your business as a legal entity is as simple as filling out a form online. It only takes minutes to apply for an EIN. Once you receive confirmation of your EIN by mail, about four weeks after applying, you can do business.
Meanwhile, start thinking about the minimum you need to invest into to get your business off the ground. Start with a food truck if you plan to upgrade to a restaurant. If your business is a limousine service, start with one car. If you create jewelry items, sell it online or through existing stores. Keeping costs low at the beginning will make your business become profitable relatively sooner.
Business Taxes are the Most Intimidating Part
Business taxes are more complicated that individual taxes. You need an organized plan to stay on top of the forms that are needed to filed annually and/or quarterly. The best way to keep your business taxes from becoming overwhelming is to keep detailed records of all transactions. It is a good idea to use accounting software for small businesses. While there are paid accounting softwares such as QuickBooks, there are many reliable free/open source accounting softwares available as well.
Remember, starting small does not make you a coward, it makes you smart. Start with small steps for a thriving small business.
SWOT analysis helps a lot
SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a structured planning method that can be tremendously helpful if correctly understood and applied to a given business venture. While the ‘Strengths’ & ‘Weaknesses’ are internal factors to the organization, ‘Opportunities’ and ‘Threats’ are presented by the external environment. If you can be brutally honest in performing a SWOT analysis for your business venture, that can help draw a clear picture of your venture’s potential.