How do you start a small business in Minnesota? Minnesota entrepreneurs often seek advice regarding the creation and growth of a small business. The entrepreneurial process generally involves (1) having a business idea, (2) creating a plan, and (3) implementing the plan. The planning process may involve a number of areas:
1. Small Business Idea
Normally, a small business is conceived with an idea—but not always. Some Minnesota small businesses were conceived by a process.
a. Minnesota Small Businesses Started by Ideas
Some small businesses start with an idea, and the company is built around that idea. For example, imagine an engineer who invents a widget that will solve a problem. The engineer might start her own company to make and sell those widgets. However, not all companies are started by ideas for products. Countless small businesses in Minnesota fall into this category.
b. Minnesota Small Businesses Started by a Process
Some small businesses start with a process that generates product ideas, and the company is built around this process. For example, the process might involve exploration in a field or scientific research. Such companies start without a product, but they have a plan to invent or acquire a product that meets a need in the market.
Process-oriented companies often require more start-up capital, but they are statistically more sustainable because they are more responsive to market trends than product-based companies (see Good to Great: Why Some Companies Make the Leap…and Others Don’t). One popular business in Minnesota that falls into this category is 3M, which of course, is no longer a small business.
2. Minnesota Small Business Plan
Preparing a plan for your small business is one of the most crucial steps. One common theme in small businesses that fail is the lack of a written business plan. Preparing a business plan helps the small business owner think through each aspect of the business, which often identifies early in the process important areas (product weaknesses, apathy in the market, under capitalization, challenges in the distribution channels, etc.) that the owner failed to consider.
3. Implementing the Minnesota Small Business Plan
After the small business plan is created, the small business owner implements the plan. Typically, this involves creating the business legal entity; addressing funding, insurance, human resources, and infrastructure (e.g. software) needs; and implementing a marketing plan.
This stage determines whether a business lives or dies. This is also the stage that excites most entrepreneurs.
4. Refining the Minnesota Small Business Plan
Whether a small business grows or fails to grow, small business owners improve and refine their small business plan to adapt to changing markets. A growing small business will consider ways to focus its attention on more profitable areas of the market, more opportunities, and ways to improve internal efficiencies. A small business that fails to grow may reassess its mission, product offerings, marketing plan, or other business areas that are responsible for the business’s lack of growth.
Refinement and adapting to change is an ongoing process for any healthy business. The methods used to refine a small business’s plan will largely depend on the business’s industry, place in the market, strengths, weaknesses, and other attributes. Various tools exist for assessment; SWAT is one of the most popular. For a single owner business, the process might merely involve getting away for a weekend to think, or having a brainstorm session with trusted advisers. Regardless of the tool used, business plan refinement should be scheduled as a reoccurring activity within any small business.
In the end, some small businesses will collapse, leaving their owners with a valuable education. Other small businesses will success, leaving their owners with financial profits, a growing education in their area of business, and a company they enjoy running.