Everyone can be a great businessman if they put their mind to it. There’s not really any need for a college degree for you to do that – and not even experience. You just need the right idea, a particular set of skills, and a well-detailed plan.
If you are reading this article, the chances are that you already have the drive to start your business – but you don’t know how to get started yet. To learn how to start a business from scratch, this step by step article should help you turn that small idea into a great success.
1. Make a Self-Evaluation
Before starting with your business planning, there is one question that you might want to ask yourself: why do you want to go into business in the first place? Depending on the answer to that question, your business might have a different nature.
For example, if you are looking to get some extra money, then you might want to go for a side hustle instead. At this point, leaving your full-time job might land you in even more trouble – in which case, your new business can just be something to bring you profits on the side.
On the other hand, if you are looking for more freedom, then it might be time for you to leave your corporate job and start fresh. Bear in mind that in order for you not to encounter financial issues, you might want to either save up some money first or quit your job only after your business gains some success.
That being said, once you figure out the reason for going into business, you also need to determine the kind of business that you want to get involved with – the industry that you want to invest in – and whether you have all it takes to do it or not. Here are some questions that you might want to ask yourself.
- What skills do I have?
- Where is my area of expertise?
- What is my passion, and does it line up with my area of expertise?
- How much capital will I need to get things started?
- How much money can I afford to use in the eventuality that my business will fail?
- What is the sort of lifestyle that I wish to live in?
- Am I even prepared to become a business person?
In this case, you will want to be as brutally honest as possible with your answers. This will set the foundation so that you may move forward – so, you should figure out the truth now instead of later.
2. Think of an Idea for a Business
Not everyone has that “Eureka” moment that makes them say “That’s it, I’m going into business.” Some people have a great idea and realize that it could be profitable – and those are the lucky people. However, some people might decide that they want to go into business – but without actually thinking of an idea for said business.
Therefore, the second kind of people will have to begin brainstorming for ideas. When cooking up a good idea, here are some pointers that you may want to keep in mind.
- Think what’s next: What do you believe the next advancements in technologies will be? How will they change the way business is done nowadays? Do you have the possibility of getting ahead of the course?
- Thing better, faster, and cheaper: Some may have a new business idea, whereas someone may think of something that is already on the market. If you’re in the latter category, you may want to think of the offerings as of now and see how you can improve them. People want fast, cheap, and qualitative products/services – so, think about how you can do that.
- Think problem-solving: What is it that bugs you the most about a particular product? In most cases, people would appreciate less of a negative than more of a positive – so, if you manage to solve that problem, your customers will thank you for it.
- Think new approaches: Try to apply the skills that you have to a completely different field. There are many businesses that handle things only one way simply because that’s how it’s always been done – but why not try it differently? In most cases, a fresh mindset should do the trick.
If you are still clueless about what you should do, you may brainstorm for ideas by asking other people. Talk to your friends and family on how to start a business online or seek some advice from people that have already been successful in business. Once you have a list of some good ideas, narrow it down to the one that “speaks to you” the most and move onto the next step.
3. Do Some Research on the Market
Keep a close eye on the market and see what other people are doing. Is there anyone else that is doing the same thing that you currently plan on doing? If there isn’t anyone doing it, why do you believe that’s the case? Did someone attempt to do so but failed in their process? Is there any good reason for why that happened?
Start by doing some research on any potential rivals that you may have. Try to figure out their objective (most businesses make it clear through their slogan), and see what approach you may take to make it successful. Also, be particularly attentive to what your potential clients may want. To determine whether your business idea has any future or not, ask yourselves these questions:
- How saturated is the market? Does your city actually need one more hardware shop? How much money is generally spent on the industry that you have in mind in the area that you are planning to open? Do you even have any more room to open up another similar business there?
- Will the market be interested? Let’s say that you are planning to open a goth shop in the neighborhood; will anyone even care that you are doing it? Or let’s say that you want to create an online service that day traders can use. Can you provide something that they can’t live without?
- How is your competition handling it? What are their strong points? What is it exactly that they are doing well and what are they doing poorly? What makes them unique? Are you in the ability to offer something different so that you may steer the customers in your direction?
- Are you able to reach your target audience? Let’s say that you are planning to sell inline skates. Is your plan to open a shop in an area that has the right-aged population – and that also has disposable income?
Once you are sure that your business idea is a good one, it’s time to dig even deeper. In this regard, you might want to look for information that may help you develop a great business proposition. This will make you unique while giving you a competitive advantage over your competition.
Remember, you need to look at both your competition and their customers. See what they are providing – and whether their clients are happy or not with what they are getting. See who is buying their product, which area they are from, what their ages are. It might involve quite a lot of detective work, but in the end, it will help you validate your business plan – and therefore, prevent you from wasting money.
4. Get Some Feedback
When you get into the business, you don’t just “jump right into it.” You first allow people to interact with it, after which you ask them what they think of it. Think about all the free trials you see for every product out there – they basically work on the same system.
When your business is just starting, a fresh set of eyes can help you find a problem that you may have otherwise missed. Moreover, these people may just turn out to be your brand advocates – particularly if you listen to their opinion and they end up liking your product.
One efficient way to utilize Facebook is to use the lean startup approach, one which involves three great steps: prototype, experiment, and pivot. Once you release a product on the market, get feedback for it, and then adapt before you go on to the next product. This way, you are able to continuously make improvements and ensure that it remains relevant.
You just need to be aware of the fact that, regardless of the type of advice that you receive, it will be useful. Some feedback will be good – but some won’t. You just need to learn how to cultivate that feedback and handle it so that you may further improve your product. Here is how you may do that:
You may end up with an “overactive brain,” so to speak. Blood will go rushing to your brain, you’ll get overly excited, and then you might end up jumping to the wrong conclusion. Slow down, take a step back to think things through, and then calmly consider everything that you just learned.
Say “Thank You”
From the first stages, you should begin by saying thank you – regardless of the type of feedback that you receive. Someone who gives you negative feedback probably won’t be expecting anything from you, especially a “thank you” – but if you do, you will likely earn their respect. This way, you will encourage them to keep being honest in the future.
Seek the Truth
Let’s say that someone does not like the idea of something that you just released. If that is the case, then this does not mean that they hate everything you stand for. Keep in mind that while it may not look that way to you, they are only trying to help – and they are pointing that issue out so that you may solve it. Their plan is not to quit buying from you altogether – they want you to improve so that they may keep buying from you.
Feedback is there so that it may help you improve your product. As Douglass Stone writes in Thanks for the Feedback: The Science and Art of Receiving Feedback Well, all types of feedback are actually there to help you provide something even better for the world:
“The focus should not be on teaching feedback givers to give. The focus—at work and at home—should be on feedback receivers, helping us all to become more skillful learners. The real leverage is creating pull. Creating pull is about mastering the skills required to drive our own learning; it’s about how to recognize and manage our resistance, how to engage in feedback conversations with confidence and curiosity, and even when the feedback seems wrong, how to find insight that might help us grow. It’s also about how to stand up for who we are and how we see the world and ask for what we need. It’s about how to learn from feedback—yes, even when it is off base, unfair, poorly delivered, and frankly, you’re not in the mood.”
All feedback is about looking for the grains of truth that will allow you to improve. This way, you will be able to pull your consumers in your direction, and even attract those that initially gave you bad feedback.
Look for Patterns
If you start noticing that you are receiving the same bad feedback on and on, then it might be a dead giveaway that there’s actually a problem there. At this point, the best idea would be to take notice and start acting. This lines up with something that Louie Ortiz, CEO of Monbi.com, also said:
“If more than one customer has a complaint about the same issue, then they are likely not the only ones. While many people out there are very comfortable with giving out comments and opinions, some may just withhold theirs – all because they do not want to deal with the confrontation. Out of five customers, two will actually express their thoughts, and the other three will be silent and never buy your product again. This is why you should be particularly attentive if more than two people complain about the same thing: if that happens, you definitely have a problem that needs to be fixed.”
In the end, the faster you take action, the better it will be for business.
Customers love it when they feel like they are listened to. They give feedback simply because they are wishing to contribute to creating the best product for them – which is why you should make sure that you also engage in conversation with them. This way, you will give them more control, and they will feel more confident about returning to your product.
Don’t just leave it to the customer to write reviews for you and state their opinion unasked. It’s not in their interest to help you improve your product; the interest is in you and only you. The customer can always look for a similar product elsewhere – but if you end up losing your clients, it won’t bide well for you.
With this in mind, you might want to start asking out some questions. Try to find out why they liked a particular product – or why they didn’t. Is there anything you can do to make it better? Do you have any solutions for improvement?
That being said, as Pinterest founder Ben Silberman also states, you should be able to maintain a balance: “Don’t take too much advice. Most people who have a lot of advice to give — with a few exceptions — generalize whatever they did. Don’t over-analyze everything. I myself have been guilty of over-thinking problems. Just build things and find out if they work.”
Make sure not to forget the positive feedback in the middle of all the negatives that you receive. One way to ensure that you power through the negative feedback is to make something we like to refer to as the “wall of love” – a place where you can post all the positives later on. Not only will this help boost your morale, but you may also use these messages as testimonials for when the product starts selling. You may also want to learn how to start a business book to place those testimonials.
5. Make Things Official
If you are going into business, the government will certainly want to know about it. Plus, making it official will protect you from fines and whatnot and will also keep all the legal matters in check. For instance, once you make things official, you will not be concerned about anyone trying to steal your idea or suing you for something you didn’t even think was possible. Here are some things that you might want to tackle from the very beginning.
- The business structure (whether you want to start a partnership, corporation, or LLC, to name just a few)
- The name for the business
- The registration of the business
- Your federal tax ID
- Your state tax ID
- The permits that you are required to have
- The license necessary to run your business
- Copyrights, trademarks, or patents
- A business bank account
Some of these things can indeed be done on your own – but just to be on the safe side, you may want to talk with a lawyer. They should be able to help you out at first, to ensure that you aren’t missing anything. More often than not, business delays are happening simply because the business owner forgot to go over a few crucial things.
6. Create a Business Plan
The business plan is probably one of the most important things to consider upon starting out your business – mostly because it’s a detailed picture of what you expect your business to become. It will tell you and everyone that is concerned how it will evolve from the beginning to the end.
Bear in mind that you need to learn how to summarize a business plan if you want to be able to keep track of it. Very long ones are likely just a lot of fluff that no one cares about, and all it will do is confuse you. An ideal plan should be somewhere around 20-30 pages – plus 10 more pages that you allocate for monthly projection appendices and other details. If your plan goes past the 40-page threshold, then your summarizing skills are probably not that good.
As CEO of Monbi.com, Louie Ortiz states, a business plan is an essential part of starting a business – and without it, there is a high chance that you will not be able to succeed.
“Going into business without a business plan is like trying to write a paper without having a purpose in mind. You can talk all you want there – but unless you know exactly what point you want to get to, what outline you are supposed to follow, you will not be able to stay on track. The same thing applies to businesses. Without a detailed business plan, you can’t know for sure what to do or expect from a business. And while a failed term paper may just cost a bad grade, a failed business can cost you millions of dollars.”
Not everyone knows how to start a business plan right away. To make things easier, here are some important things that your business plan should cover:
The Title Page: First things first, you have to start with the name of your company – which believe it or not, can be harder than you initially thought it would be. When picking out the name of your business, you need to make sure that it is appropriate for your line of business.
Executive Summary: The executive summary will tell what your business plan will include, going all the way from the description of the business to the problems and solutions that your business is planning to approach. Bear in mind that the executive summary will generally be the one to attract the investors into working with you.
Business Description: The business description is also quite an important part of your business plan. Here, you will have to describe exactly what kind of business you wish to approach, what the industry will be looking like, and how you plan to make it look in the future.
Market Strategies: You might have a fabulous business description – but unless you have a solid strategy for it, you won’t be able to accomplish what you planned. Here, you should talk about what your target market is, and about the most effective ways to sell your product to them. Think about the marketing platforms that you are going to use, and how you are planning to reach them.
Competitive Analysis: The strengths and weaknesses of your competitors should also be closely observed by you. What are they doing right now to stay on top? Is there any way that you can do it even better than them? Bear in mind that your purpose here is to be better – not to copy what your competition is doing.
Development Plan: What is the service or product that you want to start, and how are you planning to develop it? Think about the capital that you will need to make it possible, so that the business may function on a daily basis.
Finances: Where will you get the money necessary to start your business? How will you be able to keep the finances going, and when do you estimate the money will start flowing?
Keep in mind that each of these steps may take 1-3 pages, depending on the details of your business. Remember, try not to leave anything out, but also do not go overboard with the writing.
7. Finance the Business
You have the business plan in order. However, at this point, you will also need the resources necessary to start your business. So, how to start a business without money? That might not be entirely possible – but you can still find a way to get around. No matter if you need it for registration or labor, here are some sources that you might want to try out.
- Finance your business with your savings
- Appeal to your family and friends for a loan
- Go for a small business grant
- Begin a crowdfunding campaign
- Reach out to local investor groups
- Approach venture capital investors
- Go for startup accelerators or incubators
- Negotiate for an advance from customers or strategic partners
- Trade services or equity for startup help
- Go for a line of credit or a bank loan
There are numerous ways to finance your business. You just need to know where to look. Not everyone knows how to start a business with no money – but those that do also know that money can be found if you know where to search for it.
8. Develop the Service or Product
Now that you’ve put all that work in starting the business, it’s time to actually get things going and put that idea back to life. In the first stages, there are two things that you might want to focus on: quality and simplicity. Clients are not necessarily looking for a cheap product; they are looking for something that will last for quite some time – or at least give them their money’s worth.
Keep in control of your product and learn about it constantly. There’s no problem with hiring people to help you create the product, but this does not mean that you should leave everything in their hands. To ensure that the product is qualitative, you might want to go for specialists rather than generalists.
9. Build Your Team
You clearly won’t be able to do all the work yourself, regardless of how skilled at multitasking you might be. Sure, there are some businesses that might start as the “one-man” kind – but not all of them are like that. No matter if you need an employee, a partner or a freelancer, here is how you can make sure you hire the right people:
- Make Your Goals Clear: Before hiring anyone, make sure that they all understand what your vision is and what role they will be undertaking when they start working for you.
- Respect Hiring Protocol: When hiring a new person, you will need the proper forms. At the same time, you must ask the right questions. Make sure that you check with the local legislation.
- Create a Good Company Culture: For a business to be productive, the people need to be well-trained and respectful with each other. Make sure to set all the building blocks necessary for you to create a productive environment.
Make sure not to make any rushed decisions – because after all, they will be the ones responsible for the success of your business. Once you have the team, you may go for the next steps to start a small business.
10. Find a Location
You have the team – but before you launch your business, you also need to make sure that they have the right physical location to work in. No matter if you are opening a store or an office, make sure that the following aspects are convenient for you:
- Operation style
- Parking and accessibility
- Foot traffic
- Proximity to other businesses
- History of the site and image
- Building infrastructure
Once you narrow it down to the perfect location, it is time for you to prepare the place for opening and get the business starting. It may take some redesigning – but once the place looks the way you want it to, you will get a different feeling of accomplishment.
Starting your own business is not difficult to do. You just need to know exactly what steps to follow and have a clear plan. A well-organized business will have no problems surviving in the future. Hopefully, our “how to start a business wikihow” helped you figure things out as well.