Why the SBA is Wrong on Starting a Business

A great number of individuals who are interested in starting their own business tend to rely on information provided by the Small Business Administration (SBA), a government organization that assists small businesses in various ways.

In looking over the SBA’s 10 Steps to Starting a Business checklist – I see a number of issues, namely that they have the steps in the wrong order and the steps simple don’t relate for most entrepreneurs.  Let’s examine how what they advise and what most entrepreneurs should do part ways.

First, their steps – followed by my own suggestions for modification

  1. Write a Business Plan
  2. Get Business Assistance and Training
  3. Choose a Business Location
  4. Finance Your Business
  5. Determine the Legal Structure of Your Business
  6. Register a Business Name
  7. Get a Tax Identification Number
  8. Register for State and Local Taxes
  9. Obtain Business Licenses and Permits
  10. Understand Employer Responsibilities

Source: Small Business Administration (https://www.sba.gov/content/follow-these-steps-starting-business)

The above is an exhaustive list that contains virtually nothing you should follow as an entrepreneur.  That said, if you are opening a beauty salon or corner store it is probably not a bad plan.  In the real world, doing what is advised by the SBA will generally cost you a ton of money and time,  frustrate the heck out of you, and generally turn you off on the idea of starting a business in the first place!

So, what should you do?

Think about it, the very first step to take when starting a business or service, particularly a digital one, would be to figure out what the customer actually wants from you.  Let’s make this step one.  You can save a ton of time and money by making certain the enterprise you are developing is really what someone wants and/or needs.

Unfortunately, for the balance of the SBA website material, they spend very little time helping you figure out any of the below.

  • The market you are entering
  • Bootstrapping financially
  • Enlisting beta users of your idea
  • Building interest
  • Growing the initial concept
  • Understanding your customers
  • Making networking connections
  • Etc. etc. etc.

Determining What the Customer Desires (The Why?)

The vast majority of highly successful companies do one thing very well.  Instead of creating something they think is absolutely fabulous and that people would be stupid not to like, they actually ask them what they want and why they want it.  They then design their product or service accordingly.

I want to point you to the below TedTalk by Simon Sinek, which explains how Apple and other companies innovate by listening to their customers.  Hint: They Ask, Why?

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Throughout this series we will examine the actual steps most entrepreneurs should take from the very start.  Stay tuned, a ton of resources will follow.

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Brian @ Trep'd

Brian is a Manager and Project Developer at a very exciting Colorado based company. You can visit his company at http://pearl.st to learn more. His passion is sharing business experiences with others, as well as learning a bit too...

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