Starting a business involves planning, making financial decisions and completing legal activities; minority business owners also face challenges accessing capital, marketing and resources.
However, in recent years thanks to the Minority Business Development Agency, it’s now possible for minorities to become successful entrepreneurs.
The agency helps minorities secure financing, create effective marketing plans and provide other valuable resources. So, here’s a basic list of what is needed before seeking help.
1. Write a Business Plan
I know what you’re thinking “not the dreadful business plan”.
However, the business plan is a valuable resource to you and your business, providing a guide on how the business will operate. While writing your business plan, you will start visualizing your business and will learn and develop the characteristics of your customer; who is your customer? What does your customer look like? What’s your customer’s income? You will also understand the role of your competitors and vendors. When writing your business plan, think outside the box show your investors that you’re serious and have the necessary data to support your vision. A well written business plan will open many doors for you.
2. Business Structure
It’s important for you to know what type of business structure you will form. This will determine the taxes you will pay, the personal liabilities you will face and how you will raise money. Types of ownership –
• Sole Proprietorship
Sole proprietors are the most common form of business structure. This type of business is easy to form and operate. However, the business owner is personally liable for all debts incurred by the business.
A partnership is when two or more people agree to give money or a skill set to a business. Both partners share the profits and losses of the business, and each partner is personally liable for the debts incurred in the business.
A corporation is an independent legal entity owned by shareholders. This means that the corporation is separate from its owners, and the corporation is liable for the actions and debts the business incurs.
Many financing options exist on the market today, and choosing the right one for your business can mean the difference between failing and succeeding. Though, you may look at certain organizations to help you with financing. Most government agencies do not provide loans directly. They guarantee the loans once you have met certain criteria.
It’s a good idea to have other financing options available; bank loans, family or friends, refinancing or 401K plans.