By Nsim Team
If you want to become a small business owner, you first need to determine if this career path is a good fit for your skills and interests. If the following description sounds like you, then you’re probably well suited for a career as a small business owner:
• You are able to recognize potentially lucrative opportunities and predict market trends
• You have a strong desire to work for yourself
• You are able to raise enough capital to start or buy a business
• You have a thorough understanding of your market
• You are able to effectively prepare cost estimates, budgets, and work timetables
• You have a high risk tolerance; you can handle the possibility of heavy financial losses
Business owners are individuals who start a business, or purchase an existing business as a sole proprietor, with a partner or as a corporation. The business owner's job description will vary greatly depending on the type of business structure and the industry in which they involved.
Becoming a small business owner involves starting or buying a business, and to do either of these things, you will need to prepare a business plan. The process of writing down your plans for the business will help you refine your thinking and will focus your efforts by outlining the following elements of starting a business.
Identifying Your Business Opportunity: Look for unmet market needs you could address by introducing a new product or service.
Market Research: Use market research to determine if the business opportunity is feasible, what the current competition level is like, what their pricing is, etc.
Financing: One of the biggest challenges for a starting a business or purchasing a business is obtaining the necessary capital. Among the possible sources of funding are your savings, friends and family, banks, credit unions, vendor take-back loans (for buying an existing business) working a second job and venture capitalists.
Business Objectives: Defining realistic goals for the business on paper will help you determine what it will take to get there. It will also give potential financiers an idea of what the business’s potential could be if they invest in it.
Operational Decisions: There are many small decisions you must make that will help shape your business, such as what equipment to buy, who your suppliers will be, how many staff members you will need, where to locate your business, what business stationery to use, what policies and procedures to implement, et cetera.
There is no set educational path for becoming a small business owner, as there are no industry regulations to dictate such requirements, and since you are your own boss, there is no one to tell you otherwise.
There are however, some classes that could be of great benefit to you as a prospective business owner. These classes may be pursued as part of a business or commerce degree program, or they may be pursued on a per-course basis at the community college, college or university level.
Introduction to Small Business and Entrepreneurship: An introductory course in small business or entrepreneurship typically includes a broad overview of the responsibilities and duties that come with owning a small business. These classes will teach you about the various facets of operation, including legal considerations, human resources standards, finances and other aspects of running a company.
Human Resources Management: As a small business owner, you will likely have at least one employee other than yourself. A course in human resources management will teach you about the strategic and legal implications of employing workers, such as compensation and benefits, hiring practices, policy manuals, work schedules, as well as proper payroll and supervisory practices.
Small Business Financial Management: Taking a course in small business financial management gives you knowledge in several important areas of small business finance, such as how to effectively budget and maintain proper accounting record-keeping. You will also learn the basics of making purchasing decisions as well as how thorough accounting analysis leads to effective financial decisions.
Small Business Marketing: In a small business marketing class, you will typically learn the basics of what purposes marketing serves, as well as various techniques and goals pertaining to market research and promotion. A small business marketing course will also help you gain knowledge and skills related to the four core elements of a marketing strategy: product, distribution, pricing and promotion.
Becoming a successful small business owner requires a well-rounded set of analytical, financial, human resources, organizational and marketing skills. These skills enable small business owners to make the right choices when sourcing suppliers, determining price points, hiring staff and performing other functions of their job.
• A thorough understanding of how to manage money
• May require basic bookkeeping or accounting skills
• A thorough understanding of the market the business operate within
• Knowledge of how to effectively raise capital for starting or purchasing a business
• Able to effectively prepare cost estimates, budgets, and work timetables
• Able to effectively hire, train and retain staff
• Able to select, schedule, and coordinate subcontractor activities (when applicable)
• Able to effectively respond to work delays, emergencies, and other problems
• Knowledge of how to effectively market the product or service
• Awareness of what will make your business stand out from the competition