Starting a business can seem like an impossible thing, especially if you’ve never done anything similar before. However, if you break the process down into smaller steps, it’s actually much more manageable than you may have ever imagined.
If you’re hoping to build your own company but aren’t sure where to start, you’re in the right place. There are six basic steps you can take to start your own business.
1. Start with a Business Plan
So, you know what you want to do and the product (or service) you want to sell. However, knowing your product is only one part of the process. Remember, you’re not just selling something, you’re starting a business. And that means you need to write a business plan.
Your first business plan doesn’t have to be comprehensive. A simple one-page plan will do until you have the time to write something more detailed. However, there are some things even a basic business plan should have, including:
- Business objectives
- Legal structure of your business
- Basic marketing strategies
- Funding needs (if any) and strategies to obtain funding
- Financial projections
- Your business’ value proposition
- Customer segments you will target
- All potential revenue streams
Having all of this written down will ensure you have a document you can refer to anytime you have any concerns about your company’s direction. Additionally, even if you don’t think you need financing, investment, or a loan right now, you never know when you may need them in the future. A business plan is critical when applying for either of these.
2. Choose the Legal Structure
When you’re filing paperwork to “officially” start your business, you’ll need to decide on a legal structure before you can submit your application. There are several business models, and often, cities and states charge different fees depending on which type of business you’re starting.
Make sure to do your research and determine the fees for each type of structure. Additionally, before you go through with your company formation process, determine which legal structure suits it most. For example, if you’re opening a business on your own, a sole proprietorship is probably the right choice. On the other hand, if you are a co-owner with another person, you’ll have to opt for a partnership instead.
Depending on the fees of legally starting a business entity, you may decide that waiting for a few months and proving your business model works first may be the right choice. However, before you make any decision about the legal structure of your business, it’s always best to consult a lawyer or other legal expert. They’ll be able to advise you if the decision you’re debating is legal.
3. Research your Competition
It’s always best to know who and what your competitors are. Even if you’re planning to start small and focus on local customers, make sure to research larger competitors. This will give you a better idea of what your growth plan should look like.
Researching other businesses in your niche will allow you to figure out what strategies they used in the past that worked. This will give you a good starting point for your own marketing strategies and can help you avoid mistakes that have already been made.
Additionally, you may be able to find new ways to market your products and businesses based on your research. You’ll either find new marketplaces depending on where competitors market their own services, or you may realize that your major businesses rivals have missed a key customer demographic that you can spend more time targeting instead.
4. Set a Budget
One of the biggest challenges new businesses face is their budget. When you start a new company, you may find that it feels like money is constantly flying out of your pocket, and it’s simply never coming back in.
Going into work with a clear budget in mind can help reduce the amount of cash you burn. If you have a limit to what you’re willing to spend, there’s a lower chance that you’ll go over budget. Additionally, knowing how much money you have can help you determine:
- At what point your business will start to break even
- When your business should begin seeing its first profits
Ideally, your business should be profitable within 1 to 3 months of opening. That said, this timeline may vary depending on the type of business you own.
5. Build a Digital Presence
In today’s digital world, having an online presence is a must for almost every company, no matter their niche. This can mean a website, social media presence, both, or something completely different – either way, your business needs to be available online.
Even if you’re a local business, being reachable through the internet can help boost your sales. Research shows that 69% of Americans have shopped online at least once, and 25% shop online at least once a month. So, by buying offline advertising alone, you’re potentially missing out on a quarter of your customer base.
Additionally, people often like to do research on a company or a product before they make a purchase, and this research is generally conducted online. By having an online presence, you can create a positive image for your business. However, if you don’t have one, you open the doors to let other people create that reputation for you.
6. Listen to Feedback
If you want your business to succeed, you need to keep your customers happy – and an easy way to do that is to listen to what they have to say. Make sure your clients have a way to provide you with their feedback and when they do, try and listen as much as possible.
If clients feel like their opinion is valued, they will be able to trust and have faith in your business. Additionally, customers and other people who do not have direct involvement in your business are often able to point out concerns you may not be able to recognize. So, while it may be impossible to incorporate every piece of feedback you ever receive, implementing whatever you can will help.
Starting a business without prior experience may seem extraordinarily intimidating, but with a clear plan, it’ll be easier than you thought it could be. Additionally, having guidelines to follow will help ensure that you don’t just open a business but that you’re able to build a successful business.