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May 26, 2022
How Do You Start a Small Business

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# BLOG

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- [Continuing Education](https://www.ict.edu/category/programs/continuing-education/)

## How Do You Start a Small Business?

- [May 26, 2022](https://www.ict.edu/2022/05/26/)

There are many steps to starting a small business. From doing your research to getting the right licenses, it is important to take a methodical approach toward starting any type of business. If you are starting from scratch and don’t want to make many of the mistakes that first-time small business owners do, it is recommended that you gain some knowledge about small business management.

### **Step \#1: Gain Knowledge of Small Business Management**

There are many YouTube videos to watch, but an easier way to learn business management and start a small business is by attending a vocational school. Interactive College of Technology (ICT) offers a Business Management degree program that will help you get the knowledge, experience, and resources you need to succeed in business management.

Our curriculum focuses on team management, understanding legal issues, customer service relations, the fundamentals of owning and running a small business, marketing strategies, day-to-day operations, accounting and financial reports, ethical conduct and standards, and personnel management and employee development. You will also get real world experience reviewing business case studies, interacting with instructors, and working in teams to solve business problems. You may even come up with that great idea that sparks your passion to start a small business.

### **Step \#2: Do Your Research**

Take the time to create a good idea, research the industry, figure out where to set up shop and learn about your competitors. Doing your research is an important step to successful small business management.

**Brainstorm**

Every good business started with a good idea. Take the time to think about your strengths and weaknesses. What do you do well and what unique idea can you create? You may even figure out a way to improve on an old idea. Take the time to sit with your closest friends and bounce ideas of them. They may have a different perspective and can offer you feedback on your ideas. Make a short list of possible small businesses and then do some industry research.

**Research the Industry**

Consume all the information you can about your proposed idea. Read blog articles, ask experts questions, and learn as much as you can about what works and what does not. If you are opening a restaurant, do a fictitious business search and see which restaurants failed in the last 5 years. This is great information and can help you identify the right restaurant theme that will thrive in your area. If you are starting an advertising consultancy, figure out your target market and the services that you can offer them to help them succeed.

**Competitor Research**

It is important to know if the market you are entering into is already saturated. See how many direct and indirect competitors you have. Your direct competitors will be businesses that offer the same or similar products and services. However, don’t forget about your indirect competitors. If you are opening a hamburger stand, consider all the options someone has to eat in your area. Don’t just focus on other hamburger restaurants, also research alternative restaurants, grocery stores, and other food options within your price point.

A great place to do competitor research for local businesses is on Google Maps. Almost every brick-and-mortar small business has a listing on Google, and you can learn a lot about their business by looking at their Google local listing. It not only lists an address and phone number, but it also includes a link to the website, shows hours, gives you an idea of the overall neighborhood, and has pictures of the location. You can also do some research on Yelp or Angie’s List depending on your type of small business. Read the reviews and try to solve any problems your competitors have with their customers.

**Location, Location, Location**

Consider your location carefully. This is probably the biggest decision you will make for your business. If you have a service business or do business online it is not as important but if you open a retail store, bakery or yoga studio make sure to find the right location. It will be a place that is friendly and has a lot of foot traffic. This could be actual feet or cars passing by. Try to find a location next to a complementary business that is already thriving. That way you can introduce your new location to an established audience.

If you are opening a restaurant, make sure that you are not opening it in the same location as a failed business. More than two failed businesses in any one location can be a signal to the community, they may consider it a trend.

### **Step \#3: Get Licenses, Permits, and Other Legal Issues**

Depending on the small business you want to start, you may need to get a license or permit. If you want to start a hair salon, you will not only need a business license but a cosmetology license as well. If you want to hire hairstylists, you will need to consider business insurance, and OSHA guidelines. If you are starting a business from your home, you will need a business license for a home-based business and may even need sign off by a city ordinance official.

**City Government**

Almost every small business will need a business license awarded by the city, as well as the submission of a fictitious business name that tells everyone your business’ name. The city will do a fictitious business name search to make sure you are not using the same name as someone else in the vicinity. For those small businesses that are serving food or making food in a kitchen, you will need a permit and regular inspections to make sure the kitchen is clean and safe.

**State and Federal Government**

If you are accepting sales tax, selling liquor or tires, you will need to contact the State Board of Equalization. They will put your small business on a payment schedule for sales tax, whether quarterly, bi-annual, or annually. Of course, you will also need to adhere to the Internal Revenue Service to file your taxes, any 1099 forms for contractors or I-9 forms for employees, profit and loss statements, self-employment taxes and other important schedules to report your business income.

**Attorneys and Accountants**

You may want to put an attorney or accountant on retainer, just in case. An attorney can advise you on the right business type for your situation, whether sole proprietorship, partnership, or LLC. An accountant can help you budget, file taxes and offer advice to improve the profitability of your small business.

### **Step \#4: Plan Your Budget**

To complete an accurate budget, you will need to do market research and competitive analysis. You will want to write a business plan or create a pitch deck and calculate your startup costs. Are you starting from scratch or want to buy an existing business or franchise? These are some of the questions you will answer while planning your budget:

**Market Research and Competitive Analysis**

Continue your market research and add costs estimates. A few of the questions you may need to answer include:

- How much does your location cost per month?
- Do you need to sign a 3-yearc, 5-year, or 10-year lease?
- How much does your competitor make in profit and sales per month?
- Will you need to hire employees?

These are some of the important questions you must ask yourself and do your market research and competitive analysis on, to help you build out your business plan or pitch deck.

**Business Plan or Pitch Deck**

If you are going to finance your business with a bank or Small Business Administration, you must first create a business plan to show them why they should lend you money. If you are talking to an investor or venture capitalist, it is important to create a smaller, more digestible pitch deck. The pitch deck will be shorter and more succinct, but still answer the many questions that an investor will have about your small business. Some of the questions you should consider for your business plan or pitch deck include:

- How do you describe your small business?
- What products or services do you offer?
- What is your analysis of the market?
- What is your strategy for the first 3 years?
- Who are the owners and other important employees?
- How are you planning on financing your business?
- What is your break-even point?
- How will you pay back your investors?

**Calculate Startup Costs**

Part of the business plan or pitch deck should include a calculation of startup costs. This way you will know how much money is needed to start your business. You may consider the following questions:

- How much is the location’s rent?
- Do you need to renovate your location?
- Do you need to hire employees?
- Is there a franchise fee?
- What equipment is needed to make your product?
- How much are licenses, permits, and other legal needs?
- Are you going to pay yourself?

### **Step \#5: Finance Your Business**

After you have chosen your best idea for success, researched the industry, figured out your business type, found a location, and planned a budget, it is time to finance your business. You can pull money from your savings, ask for a loan from friends and family, visit your bank, or contact the [U.S. Small Business Administration](https://www.sba.gov/funding-programs/loans) (SBA).

The SBA offers loans for both working capital and fixed assets. Whether you need to build out an entire restaurant or just need a credit line to service invoices while you wait 30 to 60 days for payment, the SBA can find a loan and lender that matches your small business needs. The SBA offers many loan options with favorable terms from a 7(a) loan and 504 loan to microloans. They can also offer you contracting assistance to identify federal funds. These funds are ear marked for small, disadvantaged businesses, women-owned small businesses, veterans looking for business assistance, underutilized business zones and those that are considering government contracts.

### **Step \#6: Hire a Staff & Manage the Team**

Part of the job of a small business manager is to lead a team of employees. Write out descriptions of the employees you want to hire, including the job duties, skills, and qualifications that are needed to successfully perform the role. This will give you a starting point for job listings, comparing resumes, and deciding on the right candidates for the roles at your small business.

Pick a job listing website that caters to your industry. You have a lot of choices, so do your homework. Find a platform that you can afford and that will find the right candidates for you. Some of the more common job platforms are LinkedIn, Zip Recruiter, and Indeed. There are also many smaller companies and job posting options if you are looking for a specific industry niche.

Picking the right staff and managers is one of the most important decisions you will make. Customers should be greeted by happy and knowledgeable employees, so choose wisely. Your employees will need to work autonomously and must be trustworthy. They will have direct contact with customers and customers are the life blood of any small business.

### **Step \#7: Advertise Your Business**

The next step in the process of managing a small business is attracting customers. Whether you are an HVAC franchise that gets help from the parent company or opening a catering business and need to get the word out about your services, it is important to advertise your business. You have many options from a website, social media, traditional advertising, pay-per-click, and display online advertising and many other ways to tell your customers about your products and services.

One of the best advertising opportunities that you have is referrals. Nothing is more important than the advice of a friend or family member. While your customer talks about a great experience they had with your small business, it might entice their friends and family to try your services. Whether they talk to their friends or go on Yelp and offer a positive review, word-of-mouth marketing is the best tool to advertise your business and create loyal customers. It has been said that it is much cheaper to keep existing customers than to acquire new ones, so good customer service is key to a successful small business.

### **Final Thoughts**

Now that you know how to start a small business, it is time to learn more about Interactive College of Technology’s Business Management program. Take the first step in your small business journey and Interactive College of Technology will be with you every step of the way.

### **Want to Learn More?**

**At Interactive College of Technology, we offer** [**Business Management**](https://www.ict.edu/programs/business-management/) **training that can help you get started in a new career or start a small business You’ll get hands-on training, industry recognized certifications, and real-world experience prior to graduation! We also offer continuing education courses to refresh and build on your current skills.**

**Let’s take the first step together!** [**Contact us**](https://www.ict.edu/connect/contact/) **now to learn more.**

- [Continuing Education](https://www.ict.edu/programs/continuing-education/)
  - [4 Careers You Can Begin After Completing a Short Diploma Program](https://www.ict.edu/programs/continuing-education/4-careers-you-can-begin-after-completing-a-short-diploma-program/)
  - [When is the Best Time to Change Careers?](https://www.ict.edu/programs/continuing-education/when-is-the-best-time-to-change-careers/)
  - [How Trade Schools Teach Hard and Soft Skills](https://www.ict.edu/programs/continuing-education/how-trade-schools-teach-hard-and-soft-skills/)
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  - [How Do You Start a Small Business?](https://www.ict.edu/programs/continuing-education/how-do-you-start-a-small-business/)
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  - [What is an Example of a Vocational Class?](https://www.ict.edu/programs/continuing-education/what-is-an-example-of-a-vocational-class/)
  - [Technical College vs Community College](https://www.ict.edu/programs/continuing-education/technical-college-vs-community-college/)

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Texas

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International Students

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Vocational English As A Second Language

- [Anglais Langue Seconde](https://www.ict.edu/fr/)
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- [Anh Ngữ là một Ngôn Ngữ Thứ Hai](https://www.ict.edu/vt/)
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- 제2 언어로서의 영어

Tuition & Financial AID

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VA Regulation-Section 108

- [VA Shopping Sheet - Georgia](https://www.ict.edu/wp-content/uploads/2024/04/VA-Regulation-Section-108-Student-Shopping-Sheet-Information-Georgia-Campuses-As-of-July-1-2023.pdf)
- [VA Shopping Sheet - Texas](https://www.ict.edu/wp-content/uploads/2024/04/VA-Regulation-Section-108-Student-Shopping-Sheet-Information-Texas-Campuses-As-of-July-1-2023.pdf)
- [VA Shopping Sheet - Kentucky](https://www.ict.edu/wp-content/uploads/2024/04/VA-Regulation-Section-108-Student-Shopping-Sheet-Information-Newport-Kentucky-Campus-As-of-July-1-2023.pdf)

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