For many, owning a business is a symbol of the American dream. It can be exciting to imagine becoming your own boss, working for yourself and offering employment to others – all helping build financial security for your family and community.
Building a successful business requires a solid plan and lots of help along the way, however, and many budding entrepreneurs soon discover that having a great idea is just the beginning of their small business journey.
Mikal Quarles, head of community business strategies for Chase Business Banking, shares tips for setting up a small business, what to do, what not to do, and what to watch out for when starting your entrepreneurship journey.
- Before even starting your small business, what are the top considerations for aspiring entrepreneurs?
Entrepreneurs run the gamut from someone with a side gig, to someone jumping into the deep end with a business acquisition. Here are a few things that I feel apply to any entrepreneur:
- Passion does not convert to currency but value does. Make sure to confirm there is a demand for what you are interested in doing and a need that hasn’t been met.
- Everyone doesn’t want to be a CEO. Some entrepreneurs like the freedom of being paid for services rendered. We need to create different swim lanes so business owners understand their journey and how to create milestones along the way.
- Your credit is the business’ credit. There is no other place else to look to gain understanding on how business responsibilities will be managed.
- There is so much support out there, don’t take this journey by yourself. Join an industry association, chamber or other resource group. Connect with others having similar challenges and remember that “Iron Sharpens Iron.”
- Where should entrepreneurs begin to make their small business idea a reality?
Deciding to start a small business can be an exciting time. Aspiring entrepreneurs should set themselves up for success by having a solid plan before taking the leap. A good business plan proves your idea is viable and helps you set important goals that reduce risks and avoid potential pitfalls. Here are some questions you should ask yourself before you get started:
- Why do I want to start this business? What’s my reasoning or inspiration?
- How does my business stand out from the competition?
- What is my unique value proposition?
- Who are my target customers? How can I reach them?
- Who is already on my management team? What gaps do I need to fill?
- How can my business make a profit? How soon will it break even?
When I moved my family from Chicago to Los Angeles I couldn’t get to my mailbox without turning on my GPS. Just think of your business plan as your GPS.
- What are some pitfalls for entrepreneurs and small business owners to avoid when starting their business?
There are many pitfalls that entrepreneurs can get caught in when starting a business. The most common reasons businesses fail are due to lack of capital, lack of market impact or need, unresearched pricing (too high or low), explosive growth that drains your capital and stiff competition.
To avoid these, you should have a plan to navigate the ups and downs of entrepreneurship and a team of trusted advisors to provide expertise. All business owners should have a CPA/bookkeeper, attorney, insurance broker and a business banker they can rely on. Lastly, pivot when you see the markets have changed.
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- How can small businesses prepare for future growth?
We have talked a lot about planning but the best way to prepare for future growth is to plan for it. Growth can happen organically, through strategic partnerships or acquisitions, or through increased marketing efforts but usually doesn’t happen by accident. You have to be intentional about your growth plans for your business and take the steps to set you and your business up properly for success. Part of planning for growth is securing the capital you need to fuel the growth when you are ready. Often that means securing financing when you don’t need it so you have access to it when you do. But don’t forget the most critical aspect of growth…your people. Surround yourself with people that are smarter than you and trust that as you expand they will prove it!
- What are some of the resources available to help support aspiring and current small business owners with their business needs?
There are a lot of resources – both in person and online – a business owner can tap into to help them understand trends and to see around corners. For example, business owners can head to Chase.com/Business to see a range of free articles, courses and tools that gear business owners with everything they need to help start, run and grow their business. I also lead a consulting program for entrepreneurs, where business owners can receive one-on-one coaching from an experienced senior business consultant. We now offer the program in 21 U.S. cities and have mentored over 5,000 minority business owners since 2021.
Launching your business can be the first step toward a bright financial future, but all entrepreneurs need a great team and a great plan to make that success possible.
If you’re hoping to start your own business, start planning today, and don’t hesitate to reach out to your local financial institution to get the help you need to make it happen.
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