Starting a business will be one of the most daunting things you will ever do. But if you have got it takes to stick with it to the end, the upside can exceed your expectations. Learning the key steps on how to start a business and succeed is critical in setting yourself up for success.
Entrepreneurs are a unique breed; it takes a lot of willpower and a special kind of crazy to decide to abandon a job with a stable salary and pursue that dream or idea of yours. Making matters worse is the fact that statistics say that most businesses fail. So if you are going to start a business, you better do it right.
In this article, we will be going over 13 easy steps to take your business from idea to reality. Let’s dive in.
13 ESSENTIAL STEPS ON HOW TO START A BUSINESS
1. BUILDING CONFIDENCE COMES FIRST
Confidence is a very essential life trait to have, irrespective of what you are doing, anything done with confidence is more likely to succeed. Out of all the steps on how to start a business, I believe that believing in yourself is key!
As an entrepreneur, your confidence can come from various sources, one of which is your knowledge. Knowledge in the sense that you have done exhaustive research on the business you are about to start, you know about most of the challenges you are likely to face and how to deal with them. That being said, there will be a lot of unexpected twists and turns, ups and downs, just see them as part of the process. Every entrepreneur who has succeeded had to go through mountains of trouble and pain to get to the level they are today. If they could do it, so can you.
A mentor will also go a long way in keeping you confident, having someone to cheer you on when things are rough is great. Your mentor could be a business coach, a friend or a family member. But above all, the more you do, the more confident you become. So, instead of whining about your lack of confidence, take a leap of faith and get started already.
2. FIND THE RIGHT MIX OF PASSION AND SKILLS
As an individual, there are things that come easy to you, things that you are passionate about and can spend your entire waking hours doing. On the other hand, you have skills, skills you picked up on your journey through life, maybe these skills were passed down from your parents.
Finding a point of intersection or a sweet spot, where your passion and your skills can come together to create something awesome is amazing. Sometimes your natural instinct is to go all in and set up a business around your passion. That’s good and fine, being passionate will help you get started, but to get the results you want from your business, you are going to need some skills, and if you can’t hire help, you have to be able to do stuff by yourself.
But hey, lucky you, skills can be learned. No one is born knowing how to code a website, or how to bake a cake, they are all learned. So, if there is a skill that is critical to the success of your business, apply yourself and get studying. In no time, you will know enough to be dangerous.
3. BUSINESS IDEA BRAINSTORMING
Its time to come up with a business idea. And contrary to popular opinion, you are not supposed to know right from the get-go what business idea you want to pursue when you start your entrepreneurial journey. Brainstorming for ideas is allowed, and most times it leads to wonderful ideas.
Firstly, when seeking ideas, you need to pick a niche. Immerse yourself in that world, know all there is to know about that field. Secondly, consider other businesses you know and love. What do they do well? what are their shortcomings? Lastly, what problems do you experience in your life and want to solve? Carefully pondering on these 3 things will yield a basket of ideas. It’s now left for you to pick one into which you can channel your passion and skills. Goodluck.
4. DETERMINE VALUE CREATION (PRODUCT/SERVICE)
What unique value is your business bringing to the table? What do you intend to accomplish that no one has done in the past? Peter Thiel; a renowned investor in his book, “Zero To One” says “every business is successful exactly to the extent that it does something others cannot”. That goes to tell you how important your unique selling proposition is when starting a business.
Your goal in business should be to generate value in such a way that it gives you a reward (profit) after costs. So, how do you give value? By giving your customers what they want, by making life easier for them, or by helping them solve a problem.
You should know the “why” before you start your business. What is that thing that differentiates you from other competitors? If you want to build a sustainable business, it will all depend on how unique and important the value you deliver is and how well you can market the value to potential customers.
5. CAN YOU MONETIZE YOUR BUSINESS IDEA? (MARKET RESEARCH/ FEEDBACK)
Sometimes, people go into a certain endeavor or business without having a clear plan of how they intend to monetize their audience, Big mistake. Like it or not, except you are an NGO, the essence of getting into business is to make money. Before embarking on any business, there should be a clear plan on how you intend to monetize. You don’t have to start making money right away, but there should be a solid plan in place.
A starting point is to do market research, carry out some feasibility studies to see how viable your idea is. Your business idea might be great but are people willing to pay for it? Or do the costs associated with the business far outweigh any potential profits? All these and more are questions you need to have at the back of your mind when doing your research.
Carry out surveys both online and offline; ask potential customers what they want and whether they will be willing to pay for your product/service and if yes, how much? Also, talk to persons who run a business similar to yours, ask them about their challenges and pain points.
All in all, thorough market research should give you a clear indication of whether to proceed with your idea or to stay away from it.
6. WORK ON A BUSINESS PLAN
Your business plan is essentially your roadmap to success. There is a saying that goes, “if you fail to plan, you plan to fail”, and it is quite correct. Writing a business plan makes you go over every detail about every aspect of your business. It affords you the opportunity to really think through everything and come up with a somewhat foolproof plan to success.
A standard business plan should contain market analysis, information on your competition, your marketing plan, financial plan, operating plan, and management plan.
The market analysis gives an overview of the market and shows the demand for your products/services.
The competition analysis shows your competitors; what they do well and what they are doing wrong and how you intend to “steal” market share.
The marketing plan is basically all about your strategy for getting your first batch of customers/users. Do you hope to attract customers by offering a better service? or by starting at a price lower than that of your competitors?
Other parts of the business plan talk about how you intend to raise funds to get started and sustain the business. Your plan to hire competent staff and also the day-to-day cost of running the business, your location of choice, the equipment and facilities required, etc.
It is important to keep in mind that it isn’t especially compulsory to have a fully fleshed-out business plan (except when meeting with investors). Don’t let the lack of a comprehensive business plan prevent you from starting your business. Just do it. You will learn as you go along.
7. MAKE IT OFFICIAL (INCORPORATE AND LEGALIZE YOUR BUSINESS)
Starting a business comes with a lot of paperwork. You will have to register your business name, register your company, get your tax ID, permits and licenses, a business bank account and if your business involves the use of your intellectual property, a patent.
To ensure that you cover all your bases, it is wise to seek advice from a lawyer, so you don’t get blindsided by any legal problems.
Just as you need to register your business name in the real world, securing your business name online is also key. Be sure to buy the domains you will need in the future, domains that contain your business name in them, so someone else doesn’t make a quick buck by selling you a domain that should have been yours in the first place.
8. CALCULATE BUDGET REQUIREMENTS
When starting a business, you have to be careful about how you spend your funds. Those early days are meant for creative problem solving and bootstrapping. A good place to start is having enough money to run your business for a year when you start, there will be one-time expenses and also variable costs on a regular basis (monthly). Factor in your rent for the office space, salary for your staff and other costs associated with your business.
9. SOURCE FOR AFFORDABLE BUSINESS LOCATIONS
Depending on the size and nature of your business, you might not need to rent an office space when you first begin. Some of the biggest companies in today’s world started in a garage.
Working from home and letting your employees work remotely is an option. If your team needs to be under the same roof, you can then get an office space or a shared office space.
Aside from the finances associated with getting a business location (rent), you also have to consider how the location of your office or outlet (if you are into retail) will impact your business. Your business should be strategically located in places close to your target audience and easily accessible to customers.
10. BUILD YOUR A-TEAM
This is a tricky aspect of starting a business. Your goal should be to hire qualified and dedicated individuals who are motivated enough to bring your vision to fruition. You can’t expect your employees to be as motivated as you are, after all its ‘your’ company. But you can sell your vision to them in such a way that they feel a sense of ownership and are committed to making it work.
In the early days of a business, especially in tech startups, it is common for founders to offer their first set of employees some equity. This is usually the case when you can’t afford to pay your staff what they are actually worth. Just make sure you hire people who understand your goals and are willing to be a part of it.
11. SELECT BEST SUPPLIERS
If you are in the software business, you can outsource a portion of your operations to third-party vendors; tasks like accounting, customer support, and HR. If you are in the hardware business (selling physical products), you will have to work with suppliers or manufacturers. Get suppliers that can consistently deliver quality products at an affordable price and at the right time. If you are having a hard time selecting a supplier, another option is to call for bids from suppliers who are interested in working with you. Evaluate the bids you get and choose one that meets your requirements.
12. START ADVERTISING YOUR PRODUCTS/SERVICES
Now that you have everything set up, its time to throw your doors open to customers. And gone are the days of if-we-build-it-they-will-come, you need to advertise. These days, your advertising is just as important as your product itself.
It is a good idea to build hype around your business before you launch so that you get customers the very day you launch. You can offer special offers and discounts to your first batch of customers as an incentive. In today’s world, social media marketing is now more powerful than ever. Depending on your target audience (young or old, hobbyist or professional), you can decide on which platforms to focus your marketing efforts.
13. MAKE YOUR FIRST SALE (THERE YOU HAVE IT! YOU ARE OFFICIALLY IN A BUSINESS NOW)
Making that first sale will make you really happy. Knowing that someone out there believed in your vision enough to hand you their money feels great. But it doesn’t stop here, it’s now time to get more sales so you can meet your targets and hopefully grow your business. Just bear in mind that nothing comes easy, despite your best efforts, it will take some time for you to get the type of traction you hope for. Just stay the course and keep moving forward, one day at a time. In no distant future, you will be smiling to the bank.
Starting a business can be an amazing opportunity to work hard and not feel the urge to complain because ‘it’s not your business’, you celebrate your wins with all your heart and they make you proud more than achieving success working under someone else – because it’s your business.
By building a sustainable business, you help out society. You employ people who will help you materialize your vision in exchange for skills development, career development and personal development. You also increase your chances of becoming financially independent and enjoying life on your own terms.
I hope you liked the tips shared on this ‘steps on how to start a business’ post. This is just the first part of a series of posts, please check out the next one titled ‘how to grow your business‘, which will continue on from where we stopped here.
REFERENCES & FURTHER READING
Please check out more posts that delve into critical steps on how to start a business, and provide guides.
Thebalancesmb. Starting A Business. https://www.thebalancesmb.com/starting-a-small-business-4161641. Accessed on 04/08/2019.
Bennet Conlin. How to Start a Business: A step-by-step Guide. https://www.businessnewsdaily.com/4686-how-to-start-a-business.html. Accessed on 04/08/2019.
Mathew McCreary. The Complete, 12-Step Guide to Starting a Business. https://www.entrepreneur.com/article/297899. Accessed on 04/08/2019.
Alejandro Cremades. How to Start a Business. https://www.forbes.com/sites/alejandrocremades/2019/02/13/how-to-start-a-business/#10b0298a6e1a.