How To Start A Business
Have you always wondered how to start a business? You’ve probably heard how 50% of businesses never made it past the 5 years mark. And how entrepreneurs are notorious for their lack of sleep and social life. But if these harsh realities of starting a business don’t douse your fiery motivation, it makes sense to learn how to start a business in a systematic manner and get off to a strong start.
Most new business owners found themselves overwhelmed by the process of starting a business. Like the foundation of a skyscraper, making the right decisions, in the beginning, can make a huge difference between rapid growth for success and fire-fighting with daily operational issues.
Here is a step by step guide on how to start a business.
1. Establish The Purpose Of Your Business
The first thing to do when starting a new business is not creating beautifully phrased vision and mission statements. Instead, it is answering the purpose of your business’s existence. A common mistake is to start a business based on an idea that has been playing in your mind for some time.
Instead, ask yourself what is the purpose served by your business. To put it in common terms, what problems are you trying to solve by starting up a company and growing a team. Without a strong purpose of existence, your business will be without a clear direction and would eventually fail.
Starting a business is personal. Besides setting up a direction for your business, you’ll also need to question your motivation in getting into one. The thirst for higher income or not answering to a higher authority are wrong reasons to start a business. If anything, your personal goal and the business purpose should be aligned as one.
2. Competitive Market Research
A common mistake when starting a business is to assume that your ideas are unique on its own. In reality, the products or services that you’re planning to offer already existed in the market. Else, they are either not viable or you’re about to make history with a revolutionary business idea.
Either way, you’ll need to conduct extensive market research to gain insight into the market that you’re trying to compete in. You’ll need to assess the strength and weaknesses of your competitors in an objective manner. Besides checking out statistics on your own, it’s also a wise idea to conduct a survey of your potential customers.
With a market research, you’ll have a better idea on how to differentiate your business from competitors. The last thing you’ll want to do is to compete on price. Instead, you can shape your business to offer premium products to a specific group of customers, or simply have the shortest delivery time in the market.
3. Business Plan
You don’t need a ridiculously thick business plan to get started. But you do need at least a simple plan that outlines the goals and strategies of your business. A business plan provides a clear direction and focuses on your company. Besides that, it also holds you accountable as a business owner when you are learning how to start a business.
Your business plan should clearly spell out the short term goals of your business in measurable specifics. It should have a clear outline of the business activities that are essential to achieving the goals. The first 6 months of a business is extremely critical. A realistic projection will help you to control and monitor outgoing expenses.
Most businesses start as a single person venture. But it’s never too early to plan the functional team you envisioned in the business plan. It’s totally acceptable to draft your business plan in easily understandable language, rather than choosing corporate jargons that you’ll struggle with.
4. Make Your Business Official
Before you start charging your first customer, you’ll want to ensure that your business is officially registered as a legal entity. Depending on the states you’re in, the requirements for registration may differ. Generally, the most common entity for a new business is sole-proprietorship, partnership or a limited liability company.
Besides, getting the papers done, you’ll also need to make your business presence felt. This means setting up a website, creating a logo and printing business cards. These are crucial components that make your business look credible in the eye of both new customers or suppliers.
5. Finance Your Business
Not every business needs millions of dollars from venture capitalists backed funding. But every business requires a certain extent of external financing until it starts generating consistent profits. This is a critical aspect that you cannot ignore. Especially when learning how to start a business.
Make a list of all your fixed and variable expenses that your business needs to pay to sustain operation during the startup period. Brainstorm on how you’re going to fund your business. If your business is service-oriented, bootstrapping may be a good idea. Only if there are no costly machinery involved. Else, you could seek out a loan or grant from local financing institutions.
Some business ideas require massive funding to ensure rapid growth and execution. This means that you will need to start pitching to venture capitalists or angel investors. You can also try popular crowdfunding sites like Kickstarter to finance your product developments.
6. Develop Your First Product/Service Quickly
The first to the market almost always win. This is particularly true for startups that are trying to get their products or services noticed in the crowded marketplace. You’ll need to focus on a minimum viable product instead of trying to squeeze in every feature that is good to have.
One of the greatest mistakes for professionals turns business owners is that they try to do everything on their own. A fledgling business needs the business owner to steer it in the right direction and getting too hands-on with product developments may cause the business to deviate from its direction.
Instead, outsource or hire experts to develop the product. Or provide the services offered by the business. Ultimately, it’s not about creating a perfect product. But one that is functional that you can start selling. Business is about constantly improving your product offerings and it’s your responsibility to see to that.
7. Start Selling
There’s nothing more important than selling when learning how to start a business. Ultimately, a positive cash flow is crucial to ensuring your business grow and thrive in the long term. Regardless of the nature of your business or your previous occupation, you’ll need to master the art of selling and fast.
“Sales success is 80% attitude and 20% aptitude” according to Brian Tracy He is a renowned entrepreneur for his proven sales tactics. As intimidating as it is, doing sales is actually a systematic process.
For a start, it means you’ll need to start listening to your customer’s problems instead of pitching our products blindly on deaf ears. Focus on helping your customers instead of trying to make money out of them. Once you’ve established trust, happy customers are more than willing to spend on your products and services.
8. Brand Your Business
One of the most important things to do when learning how to start a business is to brand your business right away. In fact, branding is an important activity that could spur the growth of your business, if done right. And it is more than getting the logo and company name right.
Branding is about creating a personal voice of your company that the targeted audiences can relate too. If you’re selling to graphic designers, you’ll want the outlook of your website to reflect the current trend in the industry. Similarly, programmers have no time for fancy language. And they expect your company to help them understand your products in as little words as possible.
Taglines that resonates with your customers does help. But what’s more important is to maintain the consistency of the brand at all time. This is important to help your business build a loyal following of customers over the long term.
9. Build Your Team
Eventually, your business will be at a stage where you need an organized team to grow. Not only you’ll need to step into the hat of an HR manager, but you’ll also need to develop the right qualities to be an effective leader.
Hiring is a costly process and most business owners are cautious of making a bad hire. Besides crafting out personality assessment questions and put the candidate’s ability to test, you can opt for engaging experienced freelancers to reduce the financial commitment.
Establish the job responsibilities of each team member clearly. And allow an open communication channel to get things moving in your business. You’ll also want to set a healthy working culture to ensure the team works fluidly as it expands.
10. Grow Your Business
With everything in place, your business will eventually show a positive growth in terms of revenue and customer base. Some businesses may even break-even earlier than projected.Achieving maximum growth is the key after starting a business.
Technology and system play important roles when you’re trying to expand your business. Adopt the latest technology and leverage on proven business systems to minimize human error. Automate your business process right from the start so that you’re always ready to grow your business.
Never stop promoting and marketing your business to customers. In fact, you should consider a strategic partnership with other established brands to propel your business to a higher level.
We hope that you’ll find this guide on how to start a business helpful in your new startup venture.
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