Starting a small business from scratch is no easy feat and requires a lot of work. If you’re passionate enough about your business idea, you also need to understand that bringing it to life involves a great deal of commitment, patience, time, energy, money, and work. Therefore, if you’re willing to put in the effort, we have collated a detailed overview of what you will need to do:
Steps to consider before starting a business
Evaluate and understand the commitment required and challenges:
Starting a business requires immense commitment and can be very challenging. So, before you venture on this journey, you may have to ask yourself some basic questions such as:
- Why do I want to start a business?
- Do I have the skills required?
- Am I ready to be an entrepreneur?
- Will this business provide me with the kind of lifestyle that I want?
- Can I afford to invest money into this business?
It is important that you are brutally honest as you ask yourself these questions as they will help you determine the kind of business you will be building as well as whether or not you have what it takes to ensure its long-term growth and success.
As a budding entrepreneur, you also need to understand that somewhere along the way, some businesses may deviate from the path due to various obstacles and challenges. Some of these may include:
- Failure to come up with a unique product or service
- Inability to find the right candidates to fill up positions
- Having to work more than you had initially intended
- Finding a work-life balance
- Understanding when to change your strategy
Developing a business idea:
Before you embark on this journey, you first need to make sure that you have a good and fresh start-up idea. Hence, you need to ask yourself if your product or service can provide a solution or solve a need for consumers.
On the off chance that your business idea isn’t completely new, you can always do adequate research to understand if you can provide the same products and services efficiently and at a reduced cost.
Analyze the market and competition:
Before you start devising a business plan, it is vital for you to analyze other businesses in the market with similar offerings and improve on your business idea. Doing this will enable you to find weaknesses in your business plan, product, or service. While doing this, you should also note down the price of competitor products or services so that you price your products or services and position them in the marketplace.
You can do this by going directly to the source, i.e., your target audience to understand the following:
- How they feel about your brand and its vision
- How they feel about your brand’s logo
- How you can improve their experience
- Why they trust a specific brand
- How other businesses personalize the customer experience to cater to their needs
Direct research can be done by conducting surveys, questionnaires, focus groups, and in-depth interviews.
Furthermore, you can opt to do the research independently by gathering demographic information about your potential customers and industry trends. Doing this will reduce the amount of risk taken and help you understand your ability as an entrepreneur and what challenges you may face when trying to attract customers.
But, you have to be sure to avoid the following:
- Limiting your research to secondary resources
- Focusing only on online resources
- Gathering information from family and acquaintances
Strategize and devise a business plan:
A business plan is essentially a road map for your current and future goals, keeps you on track and organizes the direction of your company. Your business plan can either be simple or detailed, but should include the following:
- A title page and table of contents:
Your title page and table of contents are the first things that potential customers see and will likely form their first impression. Hence, it is important to keep it neat and organized.
- Statement of Purpose(SOP):
A statement of purpose is a decision maker as it outlines your products, market and business operation. Whether or not your start-up requires funding is mentioned in your SOP.
- Product descriptions:
Be sure to include detailed product and service descriptions. Write about how they can benefit your customers. Do include your product and service life-cycle too and what you have planned in terms of intellectual property rights, copyrights, and patent fillings.
- Market and competitor analysis:
Providing a summarized statement of your target demographics, market trends, and potential customer expectations is also helpful. You can include your strengths and the weakness of other competing businesses.
- Settle on a business name and establish its presence:
Your business name is your identity, hence, there are certain points you need to keep in mind while naming your entity, such as:
The business name should be easy to spell and remember
Trademarking your name is essential to avoid insurmountable hurdles
Ensuring the selected name can be used to create a domain name
Ensuring that your name is related to the industry you are entering
After you have completed the steps provided above, you should begin establishing your online presence by designing a brand logo, establishing brand policies, and setting up social media channels.
Create a financial plan for your business:
Once you have settled on a business name and established a social media presence for the business, you can determine how your business will be funded. While most budding entrepreneurs opt to fund their start-ups, you should first understand the risks of taking a business loan and decide whether it is right for your business. Given below are popular loans that you might want to consider:
- Line of credit loans:
Line of credit loans are small, short-term loans that can entrepreneurs can make use of for managing the inventory as well as for operational costs.
- Term loans:
Term loans can be short or long-term. These loans usually have low interest rates and can be repaid monthly.
- Specialty financing:
Entrepreneurs can opt for specialty financing loans when they need funding for specific purchases like for equipment and real estate. These loans can be repaid slowly, over a longer period.
- Personal loans:
Personal loans can be taken without collateral and depend on your credit score. Applying for a personal loan is simple and you can use the loan amount for business expenses.
In addition to the the loans mentioned above, there are additional funding methods: This list includes:
- Venture capital funding: Venture capital funds are investments provided to start-ups in exchange for equity or ownership stake. These funds are pooled by private equities who expect returns on their investments within a certain period.
- Angel investor: Angel investors are individuals with high-net-worth who invest in start-ups in exchange for ownership equity.
- Crowdfunding campaign: A crowdfunding campaign is a way to raise money from a large group of individuals or supporters. This is usually done through peer-to-peer platforms to help a company get its feet off the ground. Some crowdfunding platforms like equity crowdfunding allow company backers to own a share of equity in the business.
Legalize your business:
After preparing the business plan and securing the funding for your business, you can move on to the next step by legalizing it. To legalize your business, you will need to:
- Register your business: To obtain the licenses and permits required, you will need to register your business name and logo with the state or federal government. By doing this, you will have the legal right to market and promote your brand.
- Get a tax ID number: Before you get a tax ID number, you will first need to open a bank account for your business. Doing this will allow you to track your IRS transactions.
Develop the product or service:
The initial stage of product or service development can be both daunting and exciting. But keep in mind, Rome wasn’t built in a day and it will take some time for you to to craft the perfect product or service. You may also need to outsource some of the tasks to experts, so make sure you:
- Keep track of product development
- To reduce risks, implement a program of checks and balances to ensure that the work done by one person is checked by another
- Hire specialists who will be able to deliver the kind of product that you have envisioned
- Don’t depend on just one person to do the work as there is always a likelihood that they might quit, this will hamper your entire progress
Once you have developed the product, don’t waste time and wait to launch it since customer feedback early on may help you improve your product.
Advertise and market your business on all available platforms:
Revenue and sales are the key components of your business’s success, no matter what kind of product or industry you’re in. Hence, to ensure success and find the target audience, businesses should leverage the following:
- Marketing and sales: Attract the right audience by advertising your products and services though marketing campaigns. This will help you position yourself in the industry and help you understand who your target audience is and how you can cater to their requirements. Hence, your first priority should be to build a good business website and develop a strong online presence on all the available social media channels. Communication with existing and potential customers through emails, text messages, newsletters, blogs, and so much more can help increase your brands visibility in the industry. You can also adjust your marketing strategy along the way if you feel like a particular strategy is not working for you.
- Lead tracking software: Most businesses today attract customers through online marketing. An online lead tracker is a tool to document and categorize prospective customers according to the behaviors they exhibit and the interactions they have with representatives.
- Keep track of customer service and expectations: It is necessary for businesses to keep the customers happy even long after they’ve made a sale. This will increase your likelihood of building brand loyalty.
While the efficient utilization of the steps we’ve collated will help you launch your business and stay afloat in this highly competitive world, you should not to rest on your laurels and learn to adapt to changing situations. Constant research and development of superior products will result in you building the business empire of your dreams.