Starting your own business can be one of the most rewarding things you ever do, but it’s certainly not easy. Don’t know where to start? Here are the main steps you need to take when starting your own business:
1. Evaluate Yourself
Evaluating your skills and abilities is an important step in making sure you’re equipped for success. Is there anything about yourself or your business that might impede your ability to be successful? Are you on track for what you think is needed to succeed? If not, how can you adapt or change things so they better suit where you are right now, and how do those changes affect your long-term plans and goals? Make sure any issues that arise aren’t immediately dealt with, so they don’t get in the way of building a great business. After all, even great businesses can be held back by poor management of personal shortcomings.
2. Come Up with an Idea
There are two kinds of entrepreneurs—those who need an idea and those who don’t. Regardless of which you fall into, coming up with ideas is usually easier said than done. The good news is, though, that most good ideas already exist in some form or another. Take Uber or Airbnb, for example: they essentially just took a luxury service (taxis and hotels) and made it more affordable by cutting out expensive middlemen. Another popular idea generation technique is brainstorming with friends or coworkers. Doing so allows you to bounce your ideas off other people and see if anyone else has thought of your great idea before—if they have, it might be worth taking another look at your business model.
3. Conduct Market Research
It’s one thing to have an idea; it’s another to start bringing that idea into fruition. Before you spend any money or time (or both), talk with potential customers and get their feedback. Read up on how other businesses in your niche work and see if you can use any of their tactics for your own business plan. You might even want to attend an entrepreneurship event like Startup Weekend so you can meet fellow entrepreneurs who will share ideas and insights about starting your own business.
4. Choose your Business Name
Choosing your business name is one of the most important first steps in getting your company off of the ground. It will influence how people think about you, how much trust they have in you, and whether or not they choose to purchase from you. Make sure it’s something easy for customers to remember, descriptive of what you do, and in line with what other companies are doing with their names. Use search trends and consumer surveys as an indicator of what kind of names are hot—and which ones are cold—for businesses like yours. (Google AdWords Keyword Planner can be very helpful here.) A good place to start is right on Google: if someone searches for your niche-specific name, is anything already there?
5. Build your Team
Recruiting and hiring is one of your most important tasks as an entrepreneur. A small business is only as good as its team, so you need to spend time early on figuring out who makes up that team and whether they're people you can rely on. It helps to have strong relationships with your employees--it shows in how they work, how they feel about their jobs, and how loyal they are. A general rule of thumb: The best hires are those who care about more than just money; it doesn't hurt if they're already connected or if you know them personally. All that said, it's also smart to hire for skill sets--and then mentor or train those employees until their skills match up with what you need from them.
6. Write your Business Plan
Just as important as having a business plan is having a plan of action. It's critical to know exactly what you want from your new business and how you'll get there. Setting goals can help keep you on track, but don't simply list them—think about how you'll achieve those goals and make decisions accordingly. For example, if one of your goals is to break even within six months, develop a budget that factors in startup costs and expenses (e.g., marketing). If your goal is to have $20,000 in revenue at year-end 2022, set up marketing campaigns that will bring in potential customers now instead of later. As other goals come up (such as growth), revise your plan of action accordingly so you're continually moving toward success.
7. Fund your Business
When you’re first starting out, chances are you’ll be financing your new business with some combination of your own money and credit. There are different types of funding that can help you start and grow your business, including internal (from personal savings) and external (from outside investors). The most popular forms of external funding include debt—which is using something of value (such as equipment) as collateral for repayment—and equity, which is getting investment from individuals or organizations in exchange for partial ownership in your company. Although leveraging both internal and external sources will always yield better results than relying on one alone, don’t overextend yourself right out of the gate. Not having enough capital can be devastating to any startup.
8. Choose a Business Structure
Most small businesses start out as sole proprietorships or limited liability companies. You'll need to consider which option will work best for you and your business, but keep in mind that your business structure can be changed later. If you're unsure of which one is right for you, it might be better to save some money by choosing an LLC. However, many entrepreneurs choose sole proprietorship because LLCs have more complicated tax filing obligations. Speak with an accountant about your options so you can figure out what will make financial sense for your startup.
9. Apply for Licenses and Permits
Now that you have your business plan, it’s time to get official. Depending on what type of business you want to start, there are different steps you need to take. It may be as simple as creating an LLC or filing for your trademarks or registering your business name with state officials. Or, it could mean going through months of city inspections and filing endless paperwork at multiple government agencies. The point is that while starting a new business can feel like one huge hurdle, each step along the way has its own piece of red tape and fee associated with it—some of which are unavoidable—that can put some entrepreneurs off before they even get started.
10. Pick your Business Location
If you’re just starting out and don’t have any clients lined up, it might make sense to set up shop in your home. Not only will you save on costs for rent and internet connection, but you can also work in your pajamas if that makes things easier. However, if you want to be taken seriously as an entrepreneur and grow your business into something more lucrative than part-time income, you need to get office space. It may seem unnecessary in today’s digital world where so many employees do their jobs from home, but having an office gives off a professional vibe and enables clients to meet with salespeople or other employees face-to-face when needed.
11. Develop your Product or Service
This is where your idea comes to life. If you’re going into business for yourself, you’ll need to build something worth selling—or find someone who can. This is typically called product development. The goal of product development is creating something that customers will want, and at least some of them will be willing to pay for it. Your product doesn’t have to be physical; digital products like software are increasingly common these days. But before jumping in, consider what your startup costs might be and how much time it could take away from other areas of your life, like family or friends.
12. Grow your Business
Growing your business is perhaps easier than starting it, but certainly just as important. In order to really get moving with your business, you need to start generating some revenue—and possibly cash flow—to build up your company’s budget and fuel growth. Once that starts happening, though, it can be hard to keep going. That’s why so many small businesses fail during their first year of operation: they lack both sufficient funding and direction.
To really give your business a fighting chance, it’s important that you gain support and feedback from people who know how to run successful businesses. So network with local entrepreneurs, attend conferences and seminars in your industry, and get involved with groups such as SCORE (Service Corps of Retired Executives) or Women’s Business Centers if you’re a woman-owned business. In addition, it will be helpful to join an organization focused on your industry; you can learn from other members who are at different stages of growth than you. If there isn't one in your area already, look into creating one—you might be surprised by how many others are interested in joining.
Content Creator, India