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Starting your own new business could be a challenging task. You have to be very sure before you jump into the venture of creating your own business. As is true in all ventures, if the venture is successful, you would make huge profits; but all businesses come with their associated risks. We asked an expert in small business to provide us with his steps to create a new business…

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Starting your own new business could be a challenging task. You have to be very sure before you jump into the venture of creating your own business. As is true in all ventures, if the venture is successful, you would make huge profits; but all businesses come with their associated risks. We asked an expert in small business to provide us with his steps to create a new business. Here they are:

1. Evaluate yourself

Begin by taking stock of yourself and your situation. Why do you want to start a business? Is it money, freedom, creativity, or some other reason? What skills do you have? What industries do you know about? Would you want to provide a service or a product? What do you like to do? How much capital do you have to risk? Will it be a full-time or a part-time venture? Your answers to these types of questions will help you narrow your focus and pick a business. Maybe you don’t know what kind of business fits your goals. If that’s the case, there are many places to get business ideas. Look through the Yellow Pages. Go to trade shows. Buy industry magazines. Check in with the Small Business Association. Read the business section of the newspaper.

2. Analyze the industry

Once you decide on a business that fits your goals and lifestyle, you need to evaluate your idea. Who will buy your product or service? Who would be your competitors? You also need to figure out at this stage how much money you will need to get started.

3. Make it legal

There are several ways to form your business—it could be a sole proprietorship, a partnership, or a corporation. Although incorporating can be expensive, it is well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you cannot be held personally liable. You also need to get the proper business licenses and permits. Depending on the business, there may be city, county, or state regulations as well as permits and licenses to deal with. This is also the time to check into any insurance you may need for the business and to find a good accountant.

4. Draft a business plan

If you will be seeking outside financing, a business plan is a necessity. But, even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need to get started, what needs to get done when, and where you are headed.

5. Get financed

Depending on the size of your venture, you may need to seek financing from an “angel” or from a venture capital firm. Most small businesses begin with private financing from credit cards, personal loans, or help from the family. As a rule of thumb, besides your start-up costs, you should also have at least 3 months’ worth of your family’s budget in the bank.

6. Set up shop

Find a location. Negotiate leases. Buy inventory. Get the phones installed. Have stationery printed. Hire staff. Set your prices. Throw a “Grand Opening” party.

7. Indulge in trial and error
   It will take a while to figure out what works and what does not. Follow your business plan, but be open and creative. Advertise! Don’t be afraid to make a mistake. And above all, have a ball—running your own business is one of the great joys in life!

Source: Steven D. Strauss is one of the country’s leading small business experts. A columnist for USA Today.com and Microsoft Small Business, he is also the author of 14 books, including the recently published Small Business Bible.