How to Go About Building a Small Business

building a small business

Building a small business requires a variety of skills, abilities and knowledge. While it may feel like there are 1,000 things to work on all at once, with a bit of planning and some guidance, this project can be managed.

One of the first steps is finding a need or a niche in the market that excites, interests and motivates you. It also helps to find a business model that aligns with your lifestyle and goals. For example, a service-based business or retail location might not be the best fit if you have young children to care for.

Another consideration is the timing of your business launch. It’s important to choose a time when the economy is healthy and when your prospective industry is growing. You should also take the leap when the timing and circumstances suggest it’s right to do so.

A final element to consider is how your business will be structured legally. The way a company is organized and the legal form it takes (Legal Form of Organization or LFO) is crucial for building a small business. For instance, in the United States, the Small Business Administration sets size standards for companies to be officially designated as a small business. These size standards vary by industry.

Once you know how your business will be structured, it’s a good idea to research local laws and regulations that govern the operation of your business. You may need to obtain a certain number of licenses and permits, depending on the type of business you’re trying to build. In addition, you’ll need to secure a tax ID number or Employer Identification Number (EIN) to set up your company.