The Ways to Establish a Small Business
Small business is defined as an independently or privately owned business, usually in the form of a sole proprietorship or a partnership and is not dominant in its field (U.S Department of Treasury, 2010). It is limited to have no more than 50 employees or 1500 employees for manufacturing industries, and a turnover less than 5.6 million pounds (HM Revenue & Customs, n.d.). Throughout the years, small businesses have grown significantly, with over 543, 000 new businesses start each month (Nazar, 2013). It is undeniable that almost everyone wants to start and have their own business, even a small one. Who would not want to have the pride of having built something of their own and profits flowing into their bank account at the end of each and every month? (Dahl, 2011). In order to make such an “easy life” come true, there are several steps that must be taken carefully. There are plenty of ways to establish a small business but the most important ones are searching for ideas, drawing a business plan, determining the amount of capital, deciding the target market, building the business’ own brand and completing all the necessary legalities (Open Government License, 2013).
All business plans begin with an idea. A small business does not require large amount of capitals or investments, it only needs one brilliant and creative idea. It then depends on how we make it a target for a business strategy and plan. An idea has to be realistic, so that it can be turned into a real product or service. One needs to get over “the company name thing” and must not waste time to come up with a perfect company name. Instead, start digging and exploring for ideas he or she has in mind. . According to Day (2012), “lots of people go about finding their niche by using business school tools such as market analysis or sector research. Why not start a business based on a need you yourself have, that is not properly addressed by existing suppliers?” If one fails to do this, the internet can be a good help as it provides good websites that may stimulate creative ideas. Good entrepreneurs always have general ideas of what business they are going to start, whether it is an innovation or an improvement of the existing products. The general ideas must then be narrowed down into a specific idea, by raising specific questions. (Schawbel, 2012). For example, what products or services will the business provide, how to manage the products, where will they get the materials or supplies to make their products and to whom are the products intended to.
The questions can be used to make a business plan. By answering the questions, the information about the necessary tools, machines and budget needed to setup the business can be assessed. This will enable the entrepreneurs map out how to start and operate the business. A business plan includes the business’ description such as the field in which it operates in, the management structure such as...