Starting your own business can essentially change your life forever. This isn’t a step, it’s a full fledge dive into the deep end, and you want to ensure that you can and want to swim. For starters, it’s a huge investment of time and money. Then, you must come to terms with the fact that competition is high. So, before you take this massive risk, ask yourself the following questions:
Can you afford it? Even with raising capital, you’re going to spend a significant amount of your own money, that you might not get back if things don’t work out as expected - which leads us to the last question.
Are you prepared for failure? As much as we’re crossing our fingers for you, it’s important that you brace yourself for an unfavorable outcome. Be honest with yourself when answering these questions, because once you jump there’s no turning back.
Researching the market you’ll soon find yourself in the middle of is crucial. Before you swim with the big fish, you need to start in the shallow waters. Your business begins with an idea and that idea needs to evolve before any other actions are taken. The first thing you want to ask yourself is: “what do I want to achieve?” It’s imperative to define your realistically attainable goals and objectives early on - then, return to them often, as they can help steady your balance if you begin to veer off track.
Is there something that hasn’t been done, that you believe to be life-changing or highly useful for a given purpose? Is there a process that needs fixed or simplified? Can your skills be beneficial in an area you’ve never touched before? These are a few questions you can ask yourself to start coming up with business ideas. Likewise, you can also check out this list of 70 home-based business ideas to get your creativity flowing.
Did you know that 42% of businesses fail because there is no market need? To prevent this, you’ll want to make sure that your idea has the potential to succeed by understanding how and where it fits in the market. This begins when you do intensive market research on everything from potential customers to your competition. A Google search and hitting the library are good starting points, but you’ll also want to go more in depth and gather first-hand research from surveys and focus groups.
Take your time to understand if there is a demand, whether it’s already been filled and, if so, how you can do it better. You can move on only after these questions have been answered and you feel confident.
After you’ve set your goals and visualized what you want to accomplish, construct a business plan to organize and streamline your ideas. This can be used not only to attract potential partners, investors and banks, but also to help you realize that it is the beginning of something very real in order to keep you grounded and focused. Here are some of the most essential elements to include:
Industry analysis: The best way to describe this section is putting your market research into a formal document. Here you should answer ‘How large is the market you’re interested in and how is it expected to change? Who are your competitors and what are their key strengths and weaknesses?’
Financial projections: How much will you need to invest at first? How long until you’ll start earning a profit? Do you need investors? These questions are a good starting point, but we’ll dive deeper into it below.
Now that you’re feeling pretty confident - and maybe also a bit antsy - it’s time to take your business for a test drive. You don’t want to launch with any significant mistakes that could have easily been corrected ahead of time.
Regardless of whether you’re providing a service or a product, test it with your friends and others you know in order to get a feel for how the experience will be for your customer. Ask them to be brutally honest when giving their feedback. And be sure to either record or take extensive notes on these answers so that you can return to this information and use it to make improvements.
So you’ve cautiously taken all the necessary steps to make sure your idea is worthwhile. Yet, nothing feels more real than the moment you finally name your business. Take your time though, it’s okay if you spend awhile on this step. Once you decide on a name, it will be everywhere from your website’s domain to all the paperwork - and hopefully on the mind of all your potential customers.
You can choose to structure your business under any of the following titles: Sole Proprietorship, Partnership, Corporation, S-Corporation, or a Limited Liability Company (LLC). Deciding which one will serve your needs best depends on multiple factors, such as how much personal liability you want to have, tax expenses, and business registration requirements. For example, a sole proprietorship is the easiest to file, but has the most personal liability. LLCs relieve you of many personal liabilities, but come with expensive tax payments.
There are many factors to consider when structuring your small business. A great place to start is by reviewing the choices and related factors via the U.S. Small Business Administration’s business structure breakdown.
It’s important to get all the legal and formal paperwork done before you take your business out into the world. If you’re establishing your business in the U.S., you’re obligated to check all of these boxes:
Register it: This can be as simple as reporting your business name to your state and local governments, or perhaps not registering at all. The process depends on how you structure and name your business. Here is everything you need to know to register your business.
Obtain your ID numbers: You’re going to need to obtain your federal and state tax ID numbers, also known as your Employer Identification Number. It’s how your business is recognized by the government when it comes to paying taxes.
Apply for the necessary licenses and permits: This isn’t relevant for all businesses, but it’s important that you check for yourself. If your business activities are regulated by a federal agency, such as the case if you sell alcoholic beverages or broadcast on a public radio station, you’ll need to sign up. You can review this list of business requirements for federal licenses and permits for more information.
Start by opening a bank account. From here, you can begin wheeling in profits and accepting capital from investors. Depending on the type of business structure you choose, you might be required to have a separate bank account from your personal one.
Now that you know where your money goes, you can devise a plan for how to raise money for your business. There are many strategies you can take, from applying for grants and loans to setting yourself up on one of these crowdfunding sites.
You’ll also need to regulate your finances through budgeting and keep track of your income and expenses. This is to both understand how much money is coming in and out, and to be able to pay your obligatory taxes. To learn how to do so, turn to this guide to small business accounting.
Start from the top. Maybe you’ll want to work with a co-founder? With the addition of a business partner, you’ll have another person to bounce ideas off of and help you along the way. Look for a partner with strengths that you don’t specialize in in order to fill in the missing pieces of the pie.
The same concept can be applied to employees. Unless you have a very small scale business and want to be a solopreneur, it’s going to be quite difficult for you to wear multiple hats. These include being an accountant, head of marketing, software engineer, and so many other vital roles. There comes a point when you need to hire a team or turn to freelancers/ independent contractors for assistance. When you begin the hiring process, it’s crucial to factor in your budget, your needs, and the company culture you want to portray.
Your logo will be one of the most memorable parts of your business, so make sure you get it right. Luckily for you, you don’t need to be a graphic designer to create a one that fits your needs. The Wix Logo Maker will let you design one in a snap after answering a few simple questions about your business and styling tastes!
You’ll also want to make sure that all of your other assets are aligned and fit into the style of your brand. These include your slogan, color palette and font styles, business cards, social channels and anything else that has your business name marked on it. Your website too, of course, but we’ll dive into that more below.
This might be the center of your business, such as the case of owning an online store, or it might just be another way to keep interested parties informed. Either way, building a business website is an absolute must in this day and age.
An important note: Keep in mind that your website is (sorry to be blunt) essentially pointless if no one can see it on the web. This is where proper SEO (search engine optimization) comes in. In simple terms, it’s the process of using techniques to help your website rank higher in specific keyword search results. So, use these smart SEO tools to get your site out there.
If you’re a public-serving business that offers services at least partially outside of the online whelm, you’ll need to buy or rent an office space or store front for your brick and mortar shop. This will require another round of research - but trust us, it’s worth every second of your time.
When you hit the books, think about the neighborhood you see yourself in, the people that hangout there, the vibe, the foot traffic, and where your competition is located. Also factor in the affordability and practicality of this major decision. Of course you can always move, but that’s an added expense and loss of time you don’t want to deal with if you don’t have to.
Side note: After establishing your physical location, you’ll want to list your business in local directories, like Google My Business, Apple Maps and more places shown in this list of free places to promote your website.
Now that you’ve launched your business and published your website, scream it from the nearest rooftop (metaphorically speaking, of course). What we really mean is to build a social media marketing plan, start a blog, and implement an email marketing strategy.
Use these outlets to discuss business updates, share relevant industry related news, and connect with your current and potential customers. Today, people want businesses to be relatable, and these online resources allow you to do just that.
Every move you’ve made has been a mistake or a success. You’ve learned that from your financial tellings, your website analytics, and from your customer feedback. These methods of trial and error shouldn’t get your down though, but rather make you wiser.
So keep on going. Don’t be afraid to experiment with new goals and objectives after analyzing the past ones. You’ll succeed in some ways, and others you’ll make more mistakes. But then you get back up and try again.
The life of an entrepreneur is all about adapting to unexpected turns and bumps in the road. The more you gain experience from these, the closer you’ll be to succeeding and becoming a leading brand in your industry.
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