If you are thinking about starting your own business, joining the local small business market might be a great place to start. In this guide, we’ll cover the important parts of how to start a local business, from researching the market to networking with other small business owners.
What Is a Local Business?
Local businesses serve local populations. For example, a barbershop is a local business since the company’s goods and services are provided to the local population. In contrast, there might be a handmade candle business in your local neighborhood, but if they target customers nationwide by selling online — they’re not a local business.
That’s really just a technicality, though. Ultimately, businesses (whether local or not) have the same goal: to make money and serve their consumers. So here’s how to start a local business.
How To Start a Local Business
Founding a local small business isn’t a simple endeavor, but the payoff might be worth it. Here’s how to get started.
Step 1. Make a customer avatar
A customer avatar is a detailed profile of your ideal customer. You’ll use it to inform how you build your local small business, so you should start here.
Consider these questions when building your avatar:
- What are their demographic traits? (Age, gender, income, etc.)
- What are their values? (Do they value creativity, security, money?)
- How do they spend their free time? (Shopping, biking, reading, etc.)
- What are they worried about? (Do they worry about health? Their family?)
In the end, you should have an insightful description of your target customer that covers who they are, what they do, and what they want.
Step 2. Conduct market research
Next up: market research. This stage helps you learn if your business idea is viable and gives you a starting point for things like a business plan (we’ll talk about that in a moment).
Look into your competitors
Kick off your research by checking for competitors. Want to open a bike repair shop? See if there are other shops in your area. Thinking about starting a restaurant? Look into what restaurants are nearby and consider what makes your potential business special.
Looking into your competition can also be a good way to gauge consumer interest. No bike shops in the area? Maybe no one in the local market needs bike repair. You’ll use the next stage of research to determine consumer interest, so don’t give up yet if there aren’t similar shops in your area.
Analyze consumer interest and industry outlook
Some industries are dying, others are growing. As you research the market, look for statistics indicating the future of your potential industry. At the same time, see how the industry is projected to fair in your local area.
It can be hard to get reliable statistics for local business growth in specific industries, but you can analyze the interest of your potential customers by performing your own market surveys. You might also find helpful resources at your local Small Business Administration office. (You can find your local branch here)
Use the Internet
With the internet, you’ve got access to an unprecedented amount of data. Use this to your advantage. Things like online survey platforms and social media can be used to measure consumer interest while scrolling through local ads can give you an idea of other businesses in your area.
This is a good time to use your customer avatar. Reference your ideal customer profile to figure out where similar customers might hang out on the internet, then use those websites to get a better idea of what customers in your market are looking for.
It’s also a good idea to utilize the internet when you’re working on your business plan. But what is a business plan? Let’s take a look.
Step 3. Write a business plan
Business plans are essentially guidebooks for your new company. You’ve done the market research and things look good, so now it’s time to develop your strategy and business model.
Consider these questions when writing your plan:
- How will your business get a competitive advantage over other local businesses? Sometimes, it can be difficult to work out what makes your small business unique — especially if you sell a common product or service. If that’s you, think about how you can curate marketing and brand identity that separates you from the competition.
- How will your business make money? Don’t go for the surface-level stuff. Yes, you might sell shoes, but are you selling wholesale? Retail? Think about the specifics. This is also a good time to think about your value proposition — write a compelling statement explaining the unique value your local business offers the consumer.
- Who does your business need to work with? These are your key partnerships, the businesses or vendors that are integral to your small business’s function. Detail where and how you’ll get the materials for your product. If you sell a service, like lawn care, think about who you need to work with when equipment needs repairs.
- What are your resources and how will you use them? Have some start-up cash on hand? Make note of that, then detail how you’ll use the money to build your local business. Resources can include things like brick-and-mortar storefronts, too. Ultimately, detail what you have and how you’ll use it.
A business plan will change from company to company, but this is a good place to start. In the end, you need a detailed document explaining how your business will work.
Step 4. Make sure all the legal stuff is squared away
Learning how to start a local business involves quite a bit of legal matters. Basically, we’re talking about tax law and licensing. You can generally expect to deal with four main legal matters:
- Federal taxes
- Business registration and licensing
- State taxes
- Local taxes
Depending on where your local business is located, these legal issues will vary — so it’s best to get in touch with a tax or business law professional to get accurate advice.
Step 5. Set up a business bank account
Since we’re talking about taxes, it’s also time to talk about business bank accounts. When you establish a small business, it generally becomes a separate legal entity. This means your personal income tax liability is usually separate from the business’s tax liability. That’s why it’s a good idea to set up a separate bank account for your company. Business bank accounts make it easier to manage your income vs. the business’s income — and it’ll be vital as your company grows.
How To Set Yourself up for Success (The Secret to a Successful Business)
Ok, so there’s definitely not some special secret that guarantees a successful business, but these strategies can certainly be important parts of running a successful business.
Consider accessibility
You might have a great product or service, but if people can’t get to your store, they won’t buy it. That’s why you need to consider how accessible your business is. Are you planning to launch in a frequently trafficked area? Is your business open when your target customer is available? This is a good time to use that customer avatar — if your avatar couldn’t access your business, it’s time to revamp your accessibility.
Use ecommerce
This is a big one. Ecommerce is seriously one of the best things you can do for almost any business. And the stats back that up. In the retail market, for example, online stores have some of the highest profit margins. Plus, ecommerce sales in the U.S. alone are expected to surpass $723 billion by 2025. There’s really never been a better time to use the power of ecommerce — and Ecwid can help you get started.
Network with local business owners
Don’t go it alone! Networking with local business owners can get you connections that help your own business succeed. Try looking for small business owner conventions or events that are related to your industry. Use these as an opportunity to network with other local business owners. Who knows! You might start a great partnership.
Time to Get Started!
Now that you’ve learned about the most important aspects of how to start a local business, it’s time to get started!
The post How To Start a Local Business - Your Guide To Launching a Small Business first appeared on Ecwid | E-Commerce Shopping Cart.
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Max Komonov, Khareem Sudlow
