How to Start a Small Business

If you are a person who likes to live life on his own terms and does not want to get stuck in the 10 to 6 job routine, then starting a business is a great option for you. But it is not that easy. You have to work hard till it establishes firmly. Also, business is like a 24X7 job which you cannot afford to neglect. So, think about it only if you are ready to work hard with passion. Starting a business is a planned activity, be it a small or a big venture. Organizing yourself and keeping an eye on opportunities is the first requirement. Also, it is advisable to start any venture on a smaller scale, especially when it is your first attempt at a business.

Steps in Starting a Small Business

Ideas

As someone rightly said, “a big business starts with a small idea”, which means that you must have great ideas that can fetch a lot of profit. The idea of course should be free of any illegalities. It should give you an opportunity to serve the people and cater to their needs. Also it should be commercially viable and practical. Once your vision and aim is clear along with the start up idea, you are ready to move on to the next step.

Research

Market research is one of the most crucial steps in starting a business. You must have a thorough knowledge of the sector you are planning to enter in. You also must know about the competition and the challenges you will have to face. In short, you must have the complete knowledge about the industry. This will help you start with proper precautions and will also help you taste the success a little earlier.

Plan

A business plan is very important where you need to pen down every detail of the business including the details of capital investment, type of business, money transactions, marketing strategies, advertising strategies, etc. It will help you understand the proposed amount of money required in executing your plan. It is also essential when you go asking for grants and finance to the investors, lenders, or finance companies.

Finance

Once you have a plan ready, you also have to arrange for the required finance. You have to decide if you want to start a business in partnership, proprietorship, a corporation, or a public holding company, etc., and accordingly have to go and visit the lenders. You can also seek loans or government grants. You can use your savings or apply for a bank loan. It is suggested to consult your financial adviser before you take any such major decision. But whatever way you choose, you have to submit your business plan to the lenders or associates.

Legalities

Once you arrange for the finance, you must invest in the location or area where you wish to start a business and complete all the legal formalities associated with it. If it needs a license or permit, then acquire it before you start. You may have to register for local and state taxes to obtain tax identification, compensation for the workers, employee responsibilities, unemployment or disability insurance, etc. You also have to register your business with a state authority for your identity. These steps will help you determine the legal framework of your business that would help you avoid any legal problems in the future.

Get Started

With the right advertising and marketing strategy, you are sure to start on a positive note. Make sure that you are providing your clients or customers with satisfying services. You can also ask customers to give their feedback so you can improve upon it. Always maintain the quality of your goods and service that would help you retain the customers. In addition, have some interesting offers for the first few days to attract more customers. Once you establish the name and trust among customers, your business will certainly flourish.

Basic Business Management Skills

The verb manage comes from the Italian word maneggiare which means handling (especially a horse), which is derived from the Latin word manus meaning hand. In the 17th and 18th centuries, meaning of the English word management evolved from the Old French word mesnage.
“Management is the art of getting things done through people,” says management consultant Mary Parker Follett. People are perhaps the most valuable resource of a business. But there are others, like financial resources, infrastructural resources, inventory, and technology, whose optimum use is essential for effective business management. According to Peter Drucker, “Managers give direction to their organizations, provide leadership, and decide how to use organizational resources to accomplish goals.”
Management skills are classified as political (used in building power and business networking), conceptual (used in analysis of situations), diagnostic (used in taking an action in response to a situation), technical (domain knowledge), and interpersonal (people skills).
Management quote by Peter Drucker
Frenchman Henri Fayol describes management as a composition of five functions, namely planning, organizing, commanding, coordination, and control. Modern texts have reduced them to four, which include, planning, organizing, leading, and controlling.
Planning in management
Planning
Planning involves identification of your business goal and finding the way to reach it. It involves the estimation of various costs that will be incurred and evaluation of the time required to attain the business goal. A business plan has to be documented and reviewed on a regular basis. A plan is worth it if the attainment of the business goal is feasible with the allocated resources.
Organizing
It involves the assignment of tasks and allocation of resources throughout the business organization. It includes determining the primary goals of the business and strategies to reach them. It includes division of activities into tasks and assignment of the tasks to suitable and deserving employees.
Commanding
Commanding or leading is a management skill in itself. A true leader builds confidence in his followers and instills a feeling of admiration in them. He develops in them a sense of commitment towards business. A leader influences others to follow him. Understanding the need of the time, leaders need to be flexible and adaptable to change. They should help encourage the development of flexibility and adaptability in the team members.

Being innovative is important for business growth. Leaders need to be open to new ideas, they need to innovate, bring in positive change as and when needed, and progress. Progress is hardly possible without innovation. A leader should not just dream big but also provide his followers with a framework to fulfill those dreams. Innovation includes both imagination and action in accordance with it. Delegation is another important aspect of leading. It refers to allocation of tasks to the right people. It involves entrusting deserving candidates with work that they can do best.
Coordination and control in management
Coordination
Coordination involves effective communication between team members and across teams. It is useful in tracking activities towards achievement of goals. Mary Parker Follett, an American social worker and management consultant, says that coordination is the “Plus value of the group”. That is, a well-coordinated group can achieve more. Coordination involves integrating and synchronizing the efforts of team members towards fulfillment of a common goal. It is crucial for taking decisions about the future lines of action.
Control
Control refers to setting standards, ensuring that the performance meets the set standards, and taking corrective action as and when necessary. Taking a corrective action needs prior analysis of the causes of performance deficit. Control is best-implemented in the form of able guidance given to employees by their manager. Evaluations are necessary to track employee and business performance.

Coordination and control are important for the success of a business. Business is ‘busy-ness’. In simple words, it refers to the act of being busy in productive work. Management is the process of measurement of the amount of work being done. It also involves assessing the quality of work and productivity.
Business management skills cannot be confined to the definition of any one management theorist. The definition of management has evolved over time and the role of a business manager is no longer limited to only planning work and overseeing its execution. Considering the competition and changing market trends, a business manager needs to be a thinker and communicator. He needs to have an in-depth understanding of his business and its resources. Here, we look at these and certain other skills that make a good business manager.
Directed Thinking
Simply put, it refers to thinking towards a specific goal. The ability of directed thinking is crucial to develop a business idea as it involves logical, purposeful thinking to reach a particular goal. It is an important part of problem-solving, and can fall under both, conceptual and diagnostic business management skills.
Effectiveness
One more quality that a skilled manager should possess, is the willingness to work effectively towards the achievement of his business goal. Management guru Peter Drucker made a distinction between ‘efficient’ and ‘effective’. According to him, performing an activity swiftly and economically refers to being efficient, while doing the right thing at the right time, with efficiency, refers to effectiveness. Good business management skills lead you to the right goals. On the other hand, doing the wrong things or doing things in the wrong direction is a waste of time and resources. In other words, it’s the exercise of efficiency to no avail. A leader should know how to prioritize business activities. He should be able to understand what’s important for the business and differentiate it from what is urgent. It is important for effective business management.
SWOT analysis for management
Knowledge of Strengths and Opportunities
Effective business management asks for a complete knowledge of the strengths and growth opportunities a business has. Knowing the strengths requires an understanding of the availability and potential of the business resources. A complete understanding of the business and competition can help a manager understand the prospects of his business.
Knowledge of Weaknesses and Threats
As a leader, one should be able to understand the weaknesses of his organization and try to improve on them. A manager must be able to identify the threats to his business and fight them effectively. He should have the skill to endure every setback and learn from mistakes or bad decisions. Successful business development strategies used by others can help a business manager devise his own. This is where the skill to ‘experiment’ comes in the scene. Experimentation needs to be accompanied by the right judgment of actions and results.
Business management includes management of all business/organizational resources. And that includes management of money, time, and people. Proper prioritizing and scheduling of tasks for oneself and the team is an important constituent of business management. Management of money is integral to running a business. The activities of buying, selling, and pricing have to be done skillfully. Business management is not a cakewalk. It includes everything from planning, supervising, right up to being the spokesperson for your business.
People Skills
A business manager needs to possess people skills for effective management of human resources. A manager should be able to bring out the best from his team. Difficult people, those with rigid opinions and those not adaptable to change, need to be dealt with. Identification of errors followed by instructions for improvement need to come from a manager. He needs to imbibe in the minds of others that improvement is a continuous process and is essential for growth. A manager should take every opportunity to appreciate the efforts of his team members and celebrate the team’s successes. This encourages them to work to the fullest of their capacities. A manager should have the ability to keep the team’s spirits high and keep the people motivated. It’s human psychology to like getting noticed for one’s work. It’s not unnatural for one to expect recognition for his work. One of the most important business management skills is to be able to encourage your team members, extract work from them and appreciate them for it.
Approachability
Another managerial skill is to create and maintain an open atmosphere in the team. The team members should feel free to voice their concerns and always feel assured of their concerns being heard. There should be a proper hierarchy for communication within the organization. It is a good practice to assign relatively experienced employees as buddies for those newly-joined so that the new recruits do not feel unheard. This way, everyone in the organization has a point of contact.
Communication Skills
Communicating in a way that everyone understands is a skill a manager should have. That’s essential for teamwork and thereby for business management. In the words of Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.” This is what teamwork means. Developing a team spirit and maintaining it through thick and thin of a business is indeed a management skill. Keeping people together needs a manager to be a good communicator. Being able to convey one’s ideas to people, and getting good work done from them, is a skill. Communication should be effective. A business manager needs to exercise his communication skills, not just when interacting with the team, but also when communicating with external agencies; for example, during business negotiations or when addressing customer issues. That depends on your job responsibilities in the organization, but communication is an important part of a managerial role.
Foresight in management
Foresight
It is important in business management. A business manager needs to be able to sense trouble ahead of time. He needs to be prepared for it and plan work and devise strategies accordingly. Foresightedness helps a manager assess future needs of the business and identify emerging fields for diversification.

An excellent example of a business developer with foresight, was Steve Jobs. “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new,” he said. He believed in anticipating customer needs in advance to be able to give them products they would start wanting.
Management is about taking the right decisions at the right time and getting them implemented by the right people. Effective business management requires a manager to have certain basic skills like the ones given above. And one very important, yet not-so-common thing he needs to have is common sense.