For the second year in a row, new small business applications are higher than pre-pandemic levels. According to data released by the U.S. Census Bureau, five million small businesses were created in 2022, which was down just slightly from the 5.2 million small businesses that were created in 2021. It’s clear that the desire to be a business owner is strong in the United States and showing no signs of slowing down.
For many who are looking to start their own small business, there are more questions than answers. What obstacles will I face? What will I need to get my business off the ground? What resources are available to help me get started? The list is often endless. What we do know though is that there are many things that an entrepreneur can do to set themselves up for success to ensure they’re getting off on the right foot.
Here are nine things that you can do to set your small business up for success at the onset.
Develop a solid business plan. The number one thing that entrepreneurs need to survive is a solid business plan, created with the support of trusted advisors – these can include an attorney, accountant and, of course, a strong commercial banking partner.
Conduct market research. Assess who your target audience is and what the actual demand for your product or service is. Consider asking yourself these questions – is your product or service a fad, or does it have longevity? Is there an actual need in the market, or are you leaning on one big account?
Figure out where you’ll get capital. The biggest challenges entrepreneurs are facing today are the cost of capital and access to funding. Given the current economic climate, including the recent and rapid rise in interest rates, it’s difficult for both startups and young companies to get affordable capital; however, it’s absolutely necessary. Ask yourself if you are in a position to put forth your own cash and equity and aim for a 50/50 mix of your own investment with outside investments. If you’re too leveraged, you run the risk of running into cash flow issues from the loss of one to two big accounts if you are not adequately capitalized.
Build a strong team. Make sure you’re partnered with the right people who you trust, who have the right skills and share your vision and passion. Then, when you’re hiring a team, make sure that they’re going to deliver on the experience that you want to provide your customers so that you aren’t at risk of things like bad reviews, poor customer service and so forth.
Build a unique identity through branding. In today’s day and age, there are many people selling similar products and services. It’s more important than ever to build a unique identity to ensure you’re standing out from the crowd.
Develop a robust online and digital presence. Potential customers are going to be looking for you online, so it’s important that what they find is aligned with the caliber of the goods or services that your business is offering. Work to optimize your SEO, keep an eye on your reviews and ratings and ensure there’s a call to action on your website so that customers can click through to purchase, call, make an appointment, etc.
Stay flexible, adaptable and open to change. Things are changing rapidly. Small business owners today need to be prepared to revisit their business plan on a regular basis and pivot as needed.
Stay organized. Keep track of your financials, taxes, regulatory requirements and growth metrics. Doing so allows you to act quickly in order to optimize what’s going well and mitigate mistakes quickly.
Seek out support. Seek out support from mentors, advisors and other small business owners for guidance and support. There’s an incredible eco-system of small business owners that are eager to help the next generation of small business owners find their footing. Make sure that you’re looking to them as resources.
At Torrey Pines Bank, small businesses are a big priority for us. Our team has extensive experience in helping business owners with everything they need, from funding to day-to-day cash flow and everything in-between. To learn more about how we can help support you as an entrepreneur, reach out to one of our experienced bankers.