Are you tired of working for other people? Do you have exciting business ideas that could revolutionize certain industries in California? Or maybe you have unique skills or products you can offer to other California residents?
Regardless of why you’re thinking about starting a small business in California, there’s no reason you can’t make it happen. However, take a moment to pause and reflect on your decision, as nearly 50% of small businesses fail by their fifth year.
You can avoid this outcome with some research, prudent planning, and fiscal responsibility. We want to get you started in the right direction. Keep reading for a quick guide on how to start a business in California.
Do Your Homework
First, you need to hit the books. In this case, we’re referring to market research (which will actually take place online).
Before you start a small business ideas in California, you need to learn more about the local market in your respective industry. There are certain things you need to know in order to create a successful company. For example, answer the following questions:
- Do I need a California business license?
- What type of business insurance will I need?
- How many other businesses like mine are in the area?
- What are my biggest competitors doing right?
- Is there a niche I can fill that will ensure my business’s relevancy?
- How much does it cost to operate this type of business?
- What are my financial projections?
Learning the answers to these questions is vital to your success. You should also find out what resources are out there to help small businesses in California.
For example, the Avitus Group provides valuable marketing services and business management support. You can read more here about what they can do for you.
Create a Business Plan
Now that you understand the local market that your business will fall under, you can begin to craft your business plan. Your business plan is the cornerstone of starting a small business in California. It is a detailed outline of how your business will function.
Your business plan should include:
- An executive summary of your business
- The purpose and mission statement of your company
- Your market analysis
- Your marketing plan
- Financial projections
- Operating costs
- Growth potential
- Your business structure
- And more
This document will also be used by banks and other lenders to determine the validity of your business when it comes time to get startup funding.
Apply for Business Financing
Unless you’re independently wealthy, starting a small business in California will likely mean applying for startup financing. You can approach your bank for an SBA loan, which is the most common means of funding a small business. However, if you can’t get approved for an SBA loan, you have other options.
For example, you can get “love money” from friends and family members who believe in your business. You can also create an account with crowdfunding groups or seek private investors.
We recommend starting small with minimal overhead. This is especially important if you’re having trouble getting funded.
But more importantly, owning a business in California is not a guaranteed route to success. Starting with limited overhead will give you the buffer room and time you need to build your business up.
Planning on Starting a Small Business in California?
There’s a lot that goes into starting a small business in California. To improve your chances of success, take your time to do your homework and plan everything in advance. And remember, help is out there.
If you want more tips for starting a business in California, you’re in the right place. Before you go, look through some of our other business articles to find more information on marketing and entrepreneurship. We have a lot of content that can aid you on your journey.