Starting your own business is an inspiring decision in everyone’s life. The decision to quit your 9-to-5 job and to begin soaring on your own is everyone’s dream. After all, you get to do what you love and are good at – and you can also do it on your schedule. Plus, you get a certain feeling of accomplishment once you succeed in going into business on your powers.
As someone looking to start their life as a small business owner, here are some tips that you may wish to follow. The journey, while very exciting, takes a bit of research to prove fruitful. Sometimes, even the small stuff can make quite a vast difference – and in this article, you will learn in detail what you will have to do to start your own business like a pro.
- Understanding the Secret to Start a Business
- Brainstorm for Business Ideas
- Write a Good Business Plan
- Obtain Business Financing
- Determine the Type of Business You Want to Run
- Register Your Business
- Get Small Business Insurance
- Set Up the Location for Your Business
- Get Employees to Work for You
- Create a Website for Your Business
- Start Promoting Your Business
1. Understanding the Secret to Start a Business
Many people think about starting a business like “taking the plunge” – like going on a big adventure. However, what they do not understand is that starting your own business is not exactly like an adrenaline sport. Indeed, there will be quite a few heart-stopping moments (such as when you sign the lease, greenlight your first supplies, etc.), but starting a business is a bit more than that. You need to systematically move through everything, all while keeping onto a clear head.
First, you need to understand that you do not have to think of everything right off the bat. There are hundreds of variables here, all of which may change based on the problems you encounter. It is quite challenging to think of everything, which is why you need to have a thought process put in order as well.
Think about an idea – and then set a deadline for everything that you are planning to do. It might not seem important, but creating a schedule will allow you to keep track of your progress, keeping you virtually disciplined. You may not have all the ideas set in order, but by painting a picture before everything starts, you will know what you want to reach. As a general rule, here is the big picture that you may need to paint out from the start of your business.
- Assess your idea for the business and think whether it has any legs or not
- Write a short business plan with your goal and how you plan on getting there
- Do some market research where you learn about your competition and customers
- Build a sales forecast and get a realistic average representation of the numbers
- Think about the money and try to determine how much you’ll be making
- Think about the details of your business plan, including the marketing strategy
- Organize your finances and think about how exactly you will get that money
- Get started with your business
Granted, in the beginner stage, you will not have to think about every detail in particular thoroughly – but the generalities that will involve creating your business. It will give you the big idea you’ll be working on during the next steps. You might also want to consider joining some courses such as Monbi.com, where you can learn about the basics of being an entrepreneur.
2. Brainstorm for Business Ideas
Alright, so now you have made up your mind that you wish to quit your day job and start a small business. You’ve been playing with a couple of ideas – but how do you know if they are any good? Are you able to do all the research on your own, or should you ask for the help of professionals in the field? Decisions, decisions.
You will have to remember that not every business begins with a “Eureka!” moment. Some of them not even start with a business idea at all. Let’s take hobbyists, for example – these people might just fall into business by doing the things that they love.
Many businesses start upon just one idea: a different thought in a new place, or an old service that you decide to deliver online. In most cases, it doesn’t take a genius to come up with an idea. You just need to have the right eye for opportunity, and things should practically start working out by themselves.
To put your business into action, you will first need to start brainstorming for ideas. Indeed, finding a business idea through pure willpower might not be such an easy thing to do. Most people form these ideas very slowly. However, this should not serve as a reason for you to start brainstorming.
If you start brainstorming at this early stage, there’s a chance that you will have your Eureka later on. Many psychologists think that if you give your brain a task, it will continuously work on that idea even when you aren’t exactly paying attention. Think about how all the good ideas come to you when you are about to fall asleep, take a shower, or go out running – it works pretty much on the same system. The idea is there; your brain just needs to work on it.
To brainstorm for a few business ideas, here are some questions that you might want to keep in mind:
- What are people generally buying? (you may use estimation apps for big platforms such as Amazon, for example)
- What are the services or products that feature the best margin? (compare the retail prices for delivering specific services and goods
- What services or products could be costly to sell? (think about products that would not last on the shelf and that might be difficult to deliver efficiently)
Make sure not to overcomplicate things. At this stage, you are only brainstorming for ideas. Look for gaps in the market and consider which of your ideas are more likely to fill them. Also, make sure that you go for something that you enjoy doing. As Steve Jobs once said, “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”
Bear in mind that these ideas can be bold, but they may also be traditional – depending on the risk level that you are willing to take. A new approach may involve quite a lot of trial and error, uncertainty, and finding yourself in the difficulty of getting suppliers. On the other hand, tried and original ideas might increase the price competition and make it quite difficult for you to stand out. You need to consider all the advantages and drawbacks of every method carefully.
3. Write a Good Business Plan
Benjamin Franklin once said that “by failing to prepare, you are preparing to fail.” If you want to go big, you should carefully consider everything. Granted, writing a business plan might seem like a daunting process – but it does not have to be all that overwhelming. You may start small – and then build yourself up.
So, what is a business plan, anyway? Well, you should think of it as a road map for your business. You know exactly where you plan on going, and you just have to make sure that you have the directions down and that you don’t lose your way there. Thankfully, you do not have to make it extremely detailed right off the bat – mostly because there are two business plan types you will have to go for:
- Lean One-Page Business Plan: This is the initial business plan that you may go to build ideas in their first stages. It acts as a way of brainstorming, and it should help set your business in the right direction.
- Extended Formal Business Plan: While the lean business plan typically only has one page, the formal business plan is longer. It has more details in it regarding your business – and generally speaking, it is the plan that you will have to use when searching for business funding.
While these business plans are different in length, broadly speaking, they are almost the same. You mention who your target market is, how your product will benefit them, how you plan on reaching them, who will be your competition, and how much money you are expecting to make.
The key to creating a business plan is to start isimplistically– and then grow your project on the go. You may add in some headings and bullet points, and then develop that plan along the way. Things are likely to change continuously, and the chances are that new information is also going to come around. Think of your business plan as a living document that you will consistently have to modify as things are also evolving.
4. Obtain Business Financing
If you have plans to start a business, you may expect things to get quite expensive. Still, how are you going to pay for everything when you don’t even have the funds? Where can you get the business financing necessary to keep everything up and running?
Not every business can get all kinds of financing that they want. For example, if you are just in a partnership or are a sole trader, you won’t be able to sell a single stake in that business. Moreover, you cannot issue share documents if you aren’t a corporation. The base idea for your business may also affect the kind of business options that you have.
As a small business owner, there are two categories of funding options that you may go for, and they break down as follows:
- Loans: As a small new business, the best way to get funding is generally through lending. A loan is where you borrow money from a person or an institution, and then pay that money back – usually with interest. Most people decide to fund their businesses using a small business loan.
- Equity: Small companies can also obtain funding by selling specific parts of their business and giving them to an investor. It is an excellent way of earning funds with the business that you already have at hand.
Some informal yet effective ways to get funds for your business are also the presales. In this case, customers will be paying for a product or service before you even create it. However, equity and debt are the most common and preferable options – and a small business owner that has access to both tends to prefer debt.
Most people prefer taking on debt because it is much easier to find – and aside from the regular payments you need to get back to the lender, all the profits go right into your hand. You also have complete control of your business and the way that you want to lead it. The problem here is that since banks prefer the safer bets, it might be hard for you to get a loan with an innovative and risky idea.
It is not the same with investors and equity funding – they are all about the risky idea. Plus, you get access to their network and resources, and you can also look at them for strategic advice. The only disadvantage here is that those investors will have a certain amount of control over your business – and you may also have to sell them quite cheaply at first.
5. Determine the Type of Business You Want to Run
You also need to determine what kind of business you wish to run. You may go for service, merchandising, manufacturing, or even hybrid companies that provide customer’s use. Overall, here is what each business involves:
- Service Business: Provides intangible services that mostly include the use of professional skills. One example might be a salon, a law firm, a repair shop, and so on.
- Merchandising Business: Also known as a “buy and sell” business, this kind of business buys products at a wholesale price and then sells them at a retail price. Most of their profits come from selling products at a higher rate than they originally purchased them. Examples of such businesses may be stores, distributors, and other resellers.
- Manufacturing Business: Unlike the merchandising company that resells the product without modifications, a manufacturing business buys the raw material and uses it to create new products. The resulting price will be a combo between raw materials, employer labor, and overhead costs.
- Hybrid Businesses: Hybrid businesses are a combo between two or more types above. For example, a restaurant may provide a lovely freshly cooked meal (manufacturing), sell an excellent wine (merchandising), and make sure that the customers always have their orders filled (service).
You also need to determine whether you want to be a sole owner, a corporation, or part of a partnership. Most sole businesses generally go for a sole proprietorship, but depending on your preferences, you may also choose other types of businesses.
6. Register Your Business
You’re all excited to start your business as soon as possible, but there’s one more thing that you will have to remember: there’s still some paperwork that you will need to do first. These tasks won’t be fun in the slightest, but if you don’t want any problems with the law, you will have to register your business.
Since the government will want to know that you are planning to go into business, you will first have to get a DBA (Doing Business As). You may use your name, a fictive name, or the name of the company that you’ve all agreed on. For some extra legal protection, you may also want to trademark the business.
Once your business is registered, you should also get an EIN (Employer Identification Number) from the IRS. You may not need this if you do not have any employees, but they are the right way of keeping your business and personal taxes separate. Plus, it will mean less trouble for you if you decide to hire other people eventually.
You may also have to speak with the department of licenses and permits if you need special permission for your activity.
7. Get Small Business Insurance
Your revenue hasn’t even started rolling – so, at this point, you might be asking yourself: what’s the point of opting for insurance at this early stage of business planning? You may not be thrilled by the idea, but many lenders, along with the government, might require you to have some kind of insurance.
So, why do you need it? Well, the key to proper business planning is to be prepared for anything – even the worst. When you create the forecast for your business in your business plan, you will include your worst-case scenarios. The insurance will be an opportunity for you to cover all the risks that might occur.
Variety of Insurance categories – the most common including:
- Property: Property insurance, like home insurance, protects the premises of your business from theft or natural disaster. Since stashing all your assets in the building is quite common, this type of insurance prevalent.
- Public Liability: This insurance is proper to have if your business causes harm or damage to someone that is not part of your business. Let’s say that someone slipped over in your shop and broke their foot – if they decide to sue you, this insurance will cover you.
- Vehicle: If your business relies on cars quite a lot (e.g., delivery), auto insurance is also something to consider. This insurance will cover you in the event of theft or accidents.
- Worker’s Compensation: If you have employees, then the chances are high that you will also need worker’s compensation insurance. If a worker is injured on the job, this insurance will provide financial help. Bear in mind that this should by no means substitute safe practices. Be sure to make the workplace pleasant environment.
- Professional Liability: Let’s say that you or your employee made a huge mistake at work that got your company in quite a lot of financial trouble. This type of insurance might not undo the problem, but it will help with the economic damage in the fallout.
8. Set Up the Location for Your Business
Every business will need a base – but depending on the nature of your workplace, you may have to go for a different type of location. For example, if you decide to go for a work-from-home business, then you may set your home address as the location and start the business without listing an actual office. All communication and collaboration may happen online, and you may use project management platforms and software to see who is and who is not doing their job.
However, there are a few rules that you may wish to go by if you are working from home:
- Find out what you require: Do you need high-speed Internet? Is there a need for a perfect mobile reception? Perhaps you need the space for a computer or a printer – or maybe you need to set up a small studio. Regardless of what you need for your workplace, make a list, and be sure that your home office has everything necessary.
- Separate your work from personal life: When you have a business set in your own home, it might be rather difficult to separate your work life from your personal life – but still, you must try to do this. Try to create a workspace that is separate from the standart living area. After all, you don’t want to pack up each time your family has dinner. You should also stick to a schedule to prevent the days from getting very long.
If you can’t work from home or want to keep your work life and home life separately, you might want to try renting a place. Lots of people will rent workplaces to you, no matter if you plan to stay there in the short term or in the long run.
Bear in mind that the location you choose can increasingly affect the revenue that you get. For example, if it’s in an area where people find it challenging to get to, it might cause some losses in the long run. Similarly, if the rent for your chosen place is too high, then you might end up paying too much for the location to save up any profits.
Make sure that your business of choice also has enough room for growth. If your business grows in the meantime, make sure that you have enough space for a desk or two. Generally, it might cost more – but you might find a landlord that offers flexible leases for new businesses.
9. Get Employees to Work for You
In most cases, a small business will start with only one worker – and that is the owner. However, depending on the indusry, you might need more people right off the bat to help you out. In this regard, where do you even begin to hire people?
Before you start employing people, keep in mind that the needs of employment vary quite a lot. There is a good chance that you might need:
- A generalist that may help you with a variety of tasks
- Someone that has certified skills (for example a plumber)
- Someone that has technical skills (for example a developer)
- Someone that has soft skills (for example, a sales representative)
Every profession and trade will pretty much have their expectations regarding pay and work. However, there are many businesses in an industry that can tell you exactly how to fare with an employee.
There are several ways for you to get employees for your new business – among which are included:
- Ask your colleagues
- Engage with an industry recruiter
- Discuss with your contacts
- Make use of job boards
- Make a post in industry social media groups
- Go through a search on LinkedIn
- Use a recruiter service online
- Talk with a tertiary institute
- Make online and shop window advertisements
When deciding on how much to pay them, bear in mind that each industry and area will have different norms. You should bear in mind that there are people out there that are motivated by things other than money. If you cannot afford to pay the sums, they are asking for, and you might want to make it up in terms of time off, mentoring training, or flexible hours. Make your employees think that working for you is worth it.
10. Create a Website for Your Business
Nowadays, everyone is looking up a service on the Internet whenever they need help. If there is no page for that particular service, then it does not exist. If you want your website to be successful, then you need to make it quickly found by potential customers. Here is how you can make a business website that you may eventually turn into a moneymaker.
- Register a domain name: Various companies provide domain names for you. Make sure that you go for something that is available.
- Get a website host: Getting someone to host your website is also necessary, as they will not only protect your website but also help sell your product. These hosts are can help build up your website.
- Choose a template: Depending on your preferences, you may have the website designed for you from scratch. However, many people are using pre-designed templates, as they are much cheaper and easier to use.
- Get a logo: No business can be started without a logo or not if you want to look professional. Ensure that the design fits your business idea because that is how your potential customers will end up looking at your service.
- Add content: At this stage, you might want to take a close look at your competition. Granted, you should not blindly copy everything – but it’s worth checking out for references. If something seems to be working for them, then it should be working for you as well.
Once you thought about all the details for your business website, it’s time to hit publish and get things going. Tell everyone about your website, post consistently – and with time, it should become more well-known.
11. Start Promoting Your Business
With everything set and running, it’s time for you to begin promoting your new business. The “just build and will come flocking” won’t just work in this scenario. You have to work for it yourself.
First things first, you need to come up with a strategy. Perform a SWOT analysis and try to determine what your business needs to perform at its best. Many companies benefit quite a lot from being active on social media, but you may also want to promote proper SEO.
Also, let’s not forget email marketing, testimonials, publicity, networking, and so on. All of this should help you raise your business’s ranking and make it all the more visible on the Internet. You might have to put in quite a lot of time, and you should also remember that the results will not be immediate – but eventually, it should pay off.
Starting your own business is an exciting and essential step in every person’s life – and you should do it while you have the opportunity. The earlier you start, the more time you will have to reap the profits of your idea. By following the right steps, you should be able to create a profitable business that will help you succeed.