How To Start A Business
Starting a business can seem extremely overwhelming and frankly just not attainable. There are a lot of steps in the process and it might seem like it’s not worth the hassle. But the people who think this are wrong. Yes, it’s true that the process can seem overwhelming, there are a lot of steps in the process and it might take some time before your company is profitable, but that doesn’t mean that it’s not worth the work. While the process is unique for each business, If you’re thinking about starting a business take a look at the general steps that are required:
Step 1: Come up with an idea
While this might seem like an obvious first step, because how can you start a business if you don’t know what it’s going to be, it’s a little more in depth than just having an idea. You need to do market research. Find a niche in the market that your business can fill- basically, how will you be different from your competitors? Who will your customers be? If you don’t have a clear understanding of this then you may not be successful in the long run. This step is crucial.
On another note, it’s really important to be passionate about your new business. If you don’t really care about what you’re doing and are just doing it to work for yourself the chances that you’ll be successful significantly diminish. Passion will help fuel you forward.
Step 2: Figure out how much you can invest
Almost all businesses will have start-up costs. Maybe you need to buy inventory or software or become licensed or certified. What you will need depends on what your business is, but the matter of fact is that you will more likely than not need money to start your company. You will need to figure out what your start-up cost budget will be. Before looking to investors and getting money from other people or sources, look at your finances and see how much you can invest in yourself. Some companies require a lot of money to get started while others might only need a little. It’s always important that you look at your finances and know exactly how much you are able to spend. Don’t go over that limit.
Step 3: Create a detailed business plan
Your business plan should be a very thorough, clear plan that includes a detailed summary of the purpose of your business (the information that you got from step one when you did market research) along with your mission statement. Be sure to define your target market, how to plan to sell to them, your market strategy, and your overall plan for launching and growing your business. Keep in mind that you will most likely have to show you business plan to others, specifically to investors, so this plan needs to be convincing and concisely sum up your plan for your business.
Step 4: Funding
At this point in time you have a clear business plan and know the market so it’s time to get some funding. While you will probably be able to cover the start-up costs of your business by yourself, funding your business is a whole other story. If you feel comfortable with it, reach out to friends and family and pitch them your idea. If necessary, find some investors that you can pitch your idea to. At worst the people that you pitch to won’t fund you. That’s okay. You can find someone else to pitch to and eventually you’ll find someone who has the funds and is willing to come on board with you. If you don’t get investors immediately don’t let that discourage you! If investors aren’t seeming to work out or you just don’t want to go down that path at first you can research business grants that you can apply for or maybe you can take out a small business loan as a last resort. No matter which path you decide to take, keep your costs as small as possible while being sure that you aren’t underfunding yourself.
Step 6: The legal matters
Now it’s time to decide what you want the legal status of your company to be: a sole proprietorship, partnership, LLC (limited liability company), corporation, or nonprofit. Doing so will help you figure out what your taxes will be. You also want to be sure to register your business name with the state government and get a tax identification number. Get any licenses, permits or certifications that you need to run your business.
Step 7: Start running your business
With steps 1-6 complete you are ready to get your business off the ground! Set up your social media properties, build a website, rent a space if necessary and get going.
For more personal finance and entrepreneurship advice follow me on twitter @MattSapaula. Good luck!