An infinite number of businesses continuously contribute billions of dollars to the global economy. However, not every business is positioned to be successful. Having a great idea or offering a unique service is the way forward. But how does one move an idea that solves a certain problem, from just being an idea to a lucrative business? Here are 5 main steps one must take to start a business and ensure the longevity of their ventures.
1. Do Your Research: The How-Tos and the What-Nots
It may seem daunting at first, but starting a business can be easily deciphered if you know what kind of waters you are dipping your toes into. The more you know, the better prepared you are. By doing your due diligence, you will not only be able to effectively plan your business strategy and source finances. This step will also enable you to forecast potential risks and losses. Devising contingencies in place if things do not go as initially planned, would be the way to go.
Expert Insight: Attend seminars, go online, and talk to friends with businesses. Ask business owners how they started their business and get their insight. The information from experienced individuals will help manage your expectations, provide valuable lessons learned and. Remember, there is no information that is not relevant.
Only a third of businesses worldwide survive for at least two years, and nearly only half survive for five!
2. How actionable is your Business Plan?
The next step is putting the information gathered into actionable business plans. This is where a business plan becomes handy. No matter how big or small the business is, having a business plan is important.
According to Wikipedia, “a business plan is a formal written document containing business goals, the business methods on how these goals can be attained, and the time frame within which these goals need to be achieved.” In short, a business plan is a business' road map. It provides directions on where the business should go and helps avoid any bumps in the roads. It is a blueprint that should guide the business from the beginning until, eventually, its growth. Think of it as a tool to manage the business' growth and goals.
Expert Insight: A business plan should conform to the generally accepted guidelines. However, it does not have to be a hefty document with substantial data. Instead, it can be a simple document outlining what your plans are for the business. Here are some basic questions to ask while making a business plan:
- What is your business concept?
- Who is your target market?
- What is your market strategy?
- What is your business goal?
- How will you finance your business?
3. Drawing Out Your Financial Blueprint
Many startups fail because they run out of money even before they turn a profit. Whether you are planning to finance the venture itself or plan to seek outside financial help, it is vital to plan.
Expert Insight: It is not a bad idea to overestimate the amount of capital needed to start the business. Sometimes business takes a while before it can generate profit, so having that extra resource can keep the business afloat until it can finance itself. Performing a breakeven analysis is also another good way to know when the business will be profitable. The breakeven analysis helps a business owner understands what the minimum performance the business must reach to break even or to avoid losing money.
4. Making It Official: Commercial Registration
Once a business plan has been laid out, and the financing resources have been decided on, the next step to starting a business is registering it. In today's market, “branding” is everything, and it all begins with the name of the business. The business name will play a vital role in almost every aspect of the business, so choosing the right one is crucial.
Expert Insight: After deciding on a business name, make sure to check if it is already trademarked or in use. This will prevent any unnecessary headaches in the future. Paperwork is also a normal part of the process when starting a business, so be prepared. Know what documents are needed and have all the necessary documents on hand.
5. Promoting Your Business
Promotion is a crucial element in introducing the benefits of the business' service or product to its potential market. There are various ways that a small startup business can promote their business without having to rely on a big marketing budget. With so much competition, small businesses must use the resources they have to promote their products or services most effectively without the big budget.
Expert Insight: In this era of digitisation, going online is integral in helping a business reach a global market with minimal investment. A business that understands how critical it is to have a significant online presence will have a better chance of being successful. Branding also key. Branding goes beyond just a good logo. A “brand” represents the people's perception of the business, whether it be its customer service, reputation, or value.
In conclusion, there are 5 major crucial steps to starting your own business:
Do Your Research: The How-Tos and the What-Nots
How actionable is your Business Plan?
Drawing Out Your Financial Blueprint
Making It Official: Commercial Registration
Promoting Your Business
Starting a business takes a lot of work. And while these steps may help start a business, it is essential to remember that every business is unique, and there is never a perfect plan. One must be prepared to adjust and adapt to changing situations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.