So, you want to start a business? Huh? Awesome. First, I want you to know that you deserve to be rich. You deserve to be financially free and that it is true that you can start a business and make a lot of money.
The world of business isn’t bed and roses. That’s also true. Regardless, I believe, just like all other successful businessmen, you too can make it. Believe me many started from where you are. They didn’t have business knowledge at the outset.
Some didn’t have capital. Just like you, they got self-doubt and self sabotage creeping into their minds. One true thing I know for the fact that you are taking time to seek knowledge regarding business, you are taking the path they took.
Before I tell you about how to start a business, let me give you a few checks. Patience, sacrifice, consistence, persistence and self-belief are all you need to start your journey in the business world. A business is like a child you raise to become a savior of the world.
At a young age, they can not do it. You have to patiently nurture, feed and protect the child until adulthood. That is when the child can be able to take on the world. It takes time and unyielding inputs to have a business finally bring in profits. The time varies. Some business do it in the shortest time possible. Some even take decades.
If you have the above values, kindly read on. You are in the right place. And of course the right time because there is never a wrong time to learn something.
Here are the 11 sure steps to guide you through starting a business you want
Steps to start a business
Step 1: Find a Business idea.
Of course, to start a business, you will need to have an idea of what kind of business you want to start. If you have that idea already, then your business journey has already started. However, it is important to thoroughly check the kind of idea you have.
Ask yourself the following questions before you make a conclusive decision of your business idea.
- How long have you thought about the idea? In most cases the right business idea comes to your mind many times for along while. There is some kind of voice that keeps bringing it up in your mind. If its there, consider finding out more about it. Yes it is true some people start a business as soon as they see a viable idea. Usually those are experts and people that have been in business for a while. But if you are a beginner, it is better to start with something that resonates with you heart and mind. Don’t just jump on a band wagon, find something you enjoy doing. Something you have a big conviction about, something that will make you wake up excited to go to work. If you start with that kind of idea, you will enjoy business from the start. You will do something you enjoy and love. It will motivate you to do even much more to have it successful.
- How much experience do you have about the business?
It is very dangerous to start a business that you have no idea about. A business that you have zero experience in. Yes, you may wish to have a real estate company and be like your rich neighbor. But how much do you know about real estate? If you do have the knowledge, then it is safe to start one. If you have no knowledge, consider seeking employment in a business similar to that you ought to start. This will help you acquire knowledge to prepare yourself to start one. I worked at my uncle’s store for a year to learn the dynamics of running a supermarket so I could start one for myself later.
- Is the business in line with your values?
My friend Jim took lessons to become good in bed to make his girlfriend happy. The lessons paid off. He later started a men magazine about maintaining sexual excitement in bed. Well, after a year, making incredible sales, Jim realized becoming a sex therapist wasn’t his thing. His Christian beliefs made him feel guilty about the information in the magazine. He quit and the magazine was dissolved. It is better to pick a business idea that won’t conflict with your personal values and beliefs. One that you will be in harmony with for years.
If the above questions are all checked, then proceed to step two
Step 2: Make research
You have a business idea already. You have confirmed with your heart and mind that it is the kind of business that you want to start. Awesome. Before we continue, I want you to know that wealth and being rich is for people like you and me who believe that we can do it.
You will need to conduct thorough research about your business idea to confirm its feasibility and viability. You will conduct a business feasibility study. The study is to identify problems and opportunities, determining objectives, describing situations, defining successful outcomes and assessing the range of costs and benefits associated with the business idea.
Then a business viability study will help you know if the business can be sustainable and profitable. A business is viable if it can bring the owner some profits and at the same time meet its commitments to creditors and consumers.
The above studies can all be acquired through market research and competitive investigation or analysis. The market research studies consumer behavior, needs and economic trends to narrow down the business idea to that perfect profitable product. It involves gathering demographic information about age, family, health, interests, income and all other information relevant to your business idea. Market research checks the following
- Market size. How big is the market you want your business to serve or sell to?
- Demand. Is there sufficient and continuous demand for the service or goods you want to offer?
- Economic indicators. How is the economy of the market you want to serve? How high is the employment rate? What is the income range of the people in the market?
- Location. What is the right place to locate your business? Where do your customers/clients live? How proximal are your services or products to the customers/clients?
- Market saturation. How many people in the market sell the same or similar services/products in the market?
- Pricing. At what prices are the competitors selling the goods or services?
Competitive investigation or analysis
Studying your competitors in the market will help you learn from them to find a competitive edge that will enable you create a product or service that is sustainable and profitable. When conducting competitive analysis, study your competitors, product line and market segmentation. The product line will help you know what products are given to each market segment basing on behavioral, psychographic, demographic and geographic segmentation. Consider checking the following:
- Market share.? What percentage share does each competitor have in the market
- Strengths and weaknesses. What strengths and weaknesses do your competitors hold?
- Your window of opportunity for market entry. What is that perfect time to enter the market?
- How much value your target market is to your competitors. Do your competitors value your target market so much or they take them for granted?
- Barriers to entry in business. What are those road blocks that would stop you from entering into the market? Is your product already patented? Is the cost of starting that business too high?
- Availability of substitute goods and services. What are those goods that would indirectly provide a similar service to your customers or clients? Sugar and honey are different products but both can be used as sweeteners for tea.
When you combine your market research with your market analysis you come up with a competitive advantage. This helps form a market strategy which will help you enter the market ready to get your market share or even outcompete all your competitors. It will also help you minimize risks and challenges that you may face on entry into the market. At end of your market research, you will be able to know who to sell to, where to sell from, when to sell, how to sell and at what price.
Step 3: Write a business plan
A business plan is a written document that describes in detail a starting business and defines its objectives, how it is to go about achieving its goals and also carry out its operations. A business plan shows a written roadmap for the firm from financial management, marketing and operational stance which helps you to structure and grow your business.
It guides you through all stages of starting and managing a business. A well written business plan can help you raise funding to start your business and also attract business partners. You can write a business plan basing on the traditional type or the lean start up business plan.
The traditional business plan is a detailed one giving full details of every section of the business plan. It is usually a booklet of at least 10 pages.
The lean start up business plan is a brief of 1 to 2 pages giving highlightable insights about the business.
Usually if you are to use the business plan to raise funds or attract business partners, you will have to have both types. The lean business plan will help you pitch the business idea to potential investor. Incase they need more information, you will give them the detailed traditional business plan.
Click here to learn how to write a business plan.
Step 4: Raise funding for your business
After you have finished writing your business plan, raise funds to finance the start of your business. The funds may come from various sources. However, it is important to consider using a source that will enable you retain a great percentage of ownership and control of the business.
The safest option is self-funding. The funds can come from your savings, sell of an asset or from relatives and friends. You may also turn to your 401k. If you choose to get funds from your retirement accounts, ensure to consult with your financial advisor or policy administrator to avoid any penalties or delaying your retirement.
Even though you may bare the maximum risk if you opt for self-funding, you maintain full control and ownership of the business.
If you can’t raise the startup funds by yourself, you can seek external funding from angel investors and venture capital firms. You can also apply for loans from banks and credit unions.
Note: if you opt for venture capital firms, please be keen when reading through contracts and agreements to change anything that doesn’t serve your interests.
Step 5: Find a location for your business.
So, you have raised funds for your business. The next thing you need to do is find that ideal and suitable favorable place to locate your business.
When locating your business, consider the following factors to get the best for you, your business and your market position.
- Security. Look for a place with good security to ensure that your business premises and property are safe from both damage and theft.
- Potential for growth. Usually business get locations that limit expansion when need arises. It is important to put that into consideration to avoid incurring costs of moving from a smaller location to a bigger one. The costs may include; loss of some customers, purchasing bigger land, advertising and branding among others.
- Accessibility. One of the major factors to consider is accessibility. A location that is accessible to customers or clients is most ideal. It is also important to consider accessibility to raw materials, labor, financial services etc.
- Rent rates. The cost of the location. In some areas the cost of location may cost as much as three quarters of the entire capital. Consider finding that location that is within your budget yet accessible and secure.
- Competition. Analyze the level of competition and number of competitors in the area before setting up. A highly saturated market in an area may not be ideal for a starting business. Unless you have a very unique service or product, it is better to set up in a new market where you can easily dominate a good share of the market.
Step 6) Choose a business name.
When naming your business, choose a name that identifies with the company. A name that does not clash with your products or services. To attract even more customers, consider a business name that communicates a great experience, quality and that which stimulates emotions. My friend’s club is called Cloud Nine. An idiom that means a feeling of elation
Your entity name is how the state records your business identity. In some countries or states, that name is protected from being used by other entities after it is registered.
Also ensure to trade mark your business. The trade mark is a mark subject to trademark infringement lawsuits that protects your brand, name, and products from being used by other businesses. A trademark is also an identity of a business. For example, a bitten apple is a trademark for Apple Inc.
When choosing a business name, check availability of its domain name for the business website. Its injurious to the business to be under a name whose domain belongs to another company or individual. It also affects the business to have a domain name different from that of the business name. The modern world of business greatly depends on online business which makes a domain name for the business website a big concern.
Step 7) Business registration.
To make your business legal or a legal entity, you need to register it with the national registrar for businesses. The how and where will depend on the nature of the business.
However, not all businesses need to be registered with the state. If you are starting an online business-like affiliate marketing or sell of courses, you need not register anywhere except your online accounts.
Analyze the nature of your business and its legalities in your country to ensure that you operate from the legal side of your country. Registration of your business will also enable you access personal liability protection, legal benefits, and tax benefits.
Note: Check out the process of registering a business in your state or country from concerned institutions.
Step 8) Apply for the federal tax identification number.
All countries have bodies that collect taxes and issue business identification numbers. Check with your federal tax body and register for a tax identification number.
However before you register ensure that your business is eligible for registration in your state/country.
The tax identification number helps you pay taxes and file for returns.
Step 9: Get business licenses and permits.
Apply for the business licenses and permits from the responsible body in your country. Some businesses are regulated by a number of bodies for example businesses that deal in medicine acquire permits and licenses from all the concerned bodies.
Step 10: Open a business account.
With everything in check, its now time to open a business bank account to separate your money from that of your business.
A bank account will also enable you ensure money safety since cash is at a high risk of theft. In addition to that, a business account also helps stay compliant, legally protected and also provide benefits to your customers and employees.
Contact your local bank to advise you on the ideal bank account to start with for your business.
Step 11: Set up and start operations.
Congratulations. We have finally gone through the entire process starting up a business. Its now time to follow our business plan and run the business to make profits.
Conclusion: The dynamics of running a business vary. At the start of a new business, the experience is very challenging and testing. Crawl, limp, walk or run as long as the business is moving, believe that its going to pick very soon. Do not give up. Look for motivation from people that have walked the journey you are taking. Show up every day. Treat that business like a baby that needs all love and attention. Remember that you can not harvest where you do not inspect so ensure that you show up everyday to monitor your business. I wish you success and profitability in your new business. Share with me your experience in starting a business in the comments.