What Does It Take to Run A Business?

Are you an entrepreneur ready to jump into small business ownership? Before you make the leap, review the list below to see if you have what it takes.

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Confidence

Confidence can be described as a belief in oneself and the ability to succeed. It’s no surprise that every entrepreneur needs a healthy dose of it to succeed. If you’re confident, your clients or customers will feel good about spending their hard-earned money with you. Your employees will also pick up on your confidence, helping them feel secure in their jobs.

It can be tough to maintain confidence. When you’re launching your business, you might come across negativity. Our blog post, written by a seasoned small business consultant, can help you move past discouragement you may face along the way: When the Word No Becomes the Most Motivating Word You Hear in Business.

Business Plan

A business plan is a roadmap that guides you throughout your business journey. It contains a formal statement of goals, reasons they are attainable, and plans for reaching them. Often, a business plan is required when applying for a small business loan. (Note: SmartBiz Loans does not require a business plan to apply for an SBA loan or a Bank Term Loan). Elements of a business plan include:

  • Executive Summary
  • Company Description
  • Market Analysis
  • Organization & Management
  • Service or Product Line
  • Marketing & Sales
  • Funding Needs
  • Financial Projections

Often, the hardest part of a business plan is simply getting started. This post from the SmartBiz Small Business Blog has easy steps to get you going: Ultimate Guide on How to Start A Business Plan.

Business structure

According to the IRS, your form of business determines which income tax return form you have to file. The most common forms of business are:

Sole proprietorship - This is the easiest type of business to establish. There’s no distinction between the business and the owner. You’re entitled to all profits and are responsible for all your business’s debts, losses, and liabilities. There’s no formal action needed to form a sole proprietorship but you’re still responsible for licenses and permits.

Partnership - A partnership is one business owned by two or more people. Each partner contributes and shares in the profits and losses of the business.

Corporation - A corporation (also called C Corporation) is an independent legal entity owned by shareholders. This means that the corporation itself-not the shareholders-is held legally liable for the actions and debts the business incurs.

S corporation - This is a tax designation granted by the IRS that allows corporations to pass their income and deductions through to their shareholders.

Limited Liability Company - An LLC is a hybrid structure with the simplicity, flexibility, and tax advantages of a partnership with the liability protection of a corporation.

Before you choose a business structure, it’s a good idea to check with an attorney or an accountant who has small business tax experience.

Financial resources

Starting a small business doesn't have to cost a fortune but there will be initial costs. You’ll need the ability to cover expenses-like office equipment, rent, or inventory-before you become profitable. There are a number of loan types to consider depending on your credit, the amount you need to borrow, the payback terms, and the interest rates. Our blog has a number of well-researched articles by financial professionals to help you decide what funding is right for your unique business. Review the following for in-depth financing information:

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Team

Can you run your business alone? If not, you’ll need to build a solid team that can help you reach your business goals. Your first step is to determine what type of employee is best for your business. Read 6 Types of Employees and Quick Facts for information about the different types of employees and contingent workers along with the tax considerations for each.

If you’re ready to hire, our comprehensive article has information on how to set up payroll, obtain worker’s compensation insurance, register with the Department of Labor, and more: 14 Tips for Hiring Your First Employee.

Marketing strategy

Marketing is about developing your brand and demand for your product and doesn’t have to break the bank. There are plenty of low-cost and creative ways to promote your business. Read Great Marketing Ideas for Small Business to learn how to set up a referral program, manage online reviews, and inexpensively promote sales and special promotions.

There are so many options out there when it comes to spreading the word about your business. How effective they are will depend on your unique situation. Use the SmartBiz Small Business Blog as a resource to spark marketing ideas. Visit this link for articles covering direct marketing, content marketing, promotion ideas, social media tips, and more.

Market research

Market research should be performed on a regular, ongoing basis and is often conducted by a small business owner or a third-party company. When you do it right, market research gives insight into your target market’s demographics. Knowing your customer’s location, occupation, income level can help you target your marketing efforts.

Final thoughts

SmartBiz Loans works with successful small business owners every day. We’re lucky enough to interview some about their entrepreneurial journey. Get informed and inspired by these growing businesses:

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SKATEYOGI Business Story

This unique Brooklyn based business was born in a yoga studio and now helps skateboarders hone their skills and have fun.

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American Bike Patrol Services

If you’ve seen a law enforcement officer patrolling on a bicycle, chances are he received specialized training from this business owner and athlete.

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Kinetic Society

Two fraternity brothers with a love of basketball jerseys are taking University Greek organizations by storm.

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