Starting a business is a tempting opportunity for many reasons: freedom, independence, the opportunity to chase you dreams, the list goes on. In this article, we’re giving you, an aspiring small business owner, a general guide for turning your business idea into reality. This list covers the steps necessary to start your very own business. We’ll take you from the planning stages to the launch.
Your Dream is Unique
Of course, every business is unique. For this reason, we can’t give you an exact guide to starting your dream business. Our list is general, and covers the steps necessary to start your own business, but you’ll need to take these steps and apply them to your specific plans. This being said, we’re confident that you can apply this guide to your own small business plan to achieve success. Let’s get started.
How to Start a Business
1 – Choose Type of Business
The first step in your business journey is to decide the type of small business you want to pursue. It doesn’t have to be overly specific at this point because we’ll narrow it down as we go on, or decide whether it’s feasible at all.
As the sole proprietor, do you want to sell a product, run a service, or develop something unique? We don’t need to tell you that there are infinite possibilities for a small business owner, and you need to decide what most appeals to you.
2 – Preliminary Research
Oftentimes, a small business idea will fall apart before it gets past the planning stages, and that’s completely fine. Before you get too attached to an idea, you need to discover whether it’s feasible, which requires careful, extensive research. You need to decide whether you can turn the opportunity into a successful business. Here are the main factors you need to consider:
- Market Size: Do research on the size of the market in which your startup business would operate. How big is the market? How many competitors exist? Is there room for more competitors or is the market saturated? What are the barriers to entry? Look at whether the market is shrinking or growing and whether you think your idea could thrive.
- Target Market: Do extensive research on your target consumer. Who are your potential customers? Determine every detail you can about the person who’d most likely purchase your product or service. Use existing businesses as a benchmark. Evaluate whether you could realistically reach this target consumer with your product or service.
- Competition: Do extensive research on the competitive environment. How many competitors exist? What is their market share? If there are more competitors, it might be a sign that the market is reaching or has become saturated, which would make it more difficult to establish yourself as a new business.
- Legal Restrictions: This one depends on where you are running your business. See whether there are specific rules & regulations which govern operation in this space. Examples include permits, licenses, importing restrictions, intellectual property concerns, general legality, etc.
3 – Business Plan
Once you’ve done your research and have decided your small business idea is worth pursuing, it’s time to make a business plan. It’s recommended that you make a business plan early in the process so you have a template to guide your decision-making. This plan will change a lot as you go, but it’s great to lay the groundwork.
Your initial business plan should outline how you intend to structure, operate, and grow your business into the future. It should touch on all three areas, with a solid level of detail for each. Be as specific as you can given how early you are in the process.
4 – How Will You Get Funding?
Money is something you’ll have to start thinking about early in the process. You need to examine how expensive you think it will be to start/run your startup, and how you intend to get this money. You need to know what you’ll need to invest to get your business started, and the cash flow you’ll need to keep your business running to eventually make a profit.
Then, decide where this money will be coming from. Will you need funding? What are your startup costs (for inventory, equipment, land, etc.)? What will your margins look like, especially after you consider factors like sales tax? Basically, you need to know what it will cost to start your business, where this money will come from, and a picture of your cash flow once the business is able to start.
You need to have a detailed idea of all these variables so you can start to make a realistic plan of the feasibility of your small business idea. You can also use this information to present to investors or to secure a small business loan.
5 – Structure Your Business
If you’ve made it this far and still think your small business idea is feasible, then it’s time to get into the real, structural details. Choosing a business model/business structure is important for legal and operational reasons.
The business model you choose will depend on your country of origin and the legal structure/environment specific to your area. Generally speaking, you will be choosing between a structure similar to a sole proprietorship or an incorporation.
Sole proprietorships tend to be simpler to form and operate, but it also gives you personal liability for your business’s actions. If you are planning to start your business with more than one owner, you might consider incorporation (or a Limited Liability Company).
6 – Licenses and Regulations
There are many legal requirements which might influence how your business operates. These regulations will differ depending on the laws specific to your country or specific area. You need to research these regulations before you get started, pursuant with our advice above.
You must have a complete understanding of which type of business license is needed to start your business, and the licenses/regulations that will govern your business activities going forward. Then, you need to do the necessary paperwork and licensing to get in accordance with these guidelines.
It is usually a good idea to consult a professional on this process, especially if you are operating in an area that is known for strict regulation (food services, importing, etc.) A professional can tell you what you need to get started and how to operate your business to stay in accordance with the law. It might be expensive up front, but it can save you much more money going forward.
7 – Administrative Organization
You’re now getting close to starting your small business! The next step is outlining the systems and processes that you’ll need for running your business. This includes task management, operational management, financial management, and more. Basically, you want a detailed plan for assigning tasks and managing the day-to-day operations of the business to meet your goals.
This includes the tools necessary to manage your business’s operations, finances, human resources, marketing efforts, and more. You need a plan that will respond to the challenges of your particular market and allow you to react as circumstances arise. You’ll need the necessary expertise and systems in place to manage these areas on a day-to-day basis, as well as to guide you into the future.
8 – Pick a Location
It was difficult to pick a spot in our list for this part. Realistically, you can start surveying locations as soon as you’ve decided the business is worth pursuing. Picking a location can be a difficult choice. It will heavily depend on the type of business you’re running.
If you’re running a service business, or selling products in-store, you’ll want to be close to your target market. If you’re picking a location for running the business’ operations, then you might be more concerned with size and price. Or, it might be the case that you can run an online business based fully from your home.
Whatever the case, choosing a location depends on a detailed understanding of your target market and your competitive environment. You need to choose a location that will help you run your business, and reach your target market in the most effective way. It might be a significant investment, which is why you need to base the decision on significant expertise.
9 – Organize Your Day-To-Day/Hire & Train Your Team
First, you put a plan in place for organizing your day-to-day. Now, it’s time to establish the necessary systems to make it happen. Before launch, you need to be fully prepared to hit the ground running. Assign roles, organize tasks, implement systems and procedures, and have contingency plans for what to do when unexpected circumstances arise. This might include hiring a team of employees who need to be fully trained and prepared for their role.
This will include a lot of careful preparation & planning, but it helps save a lot of trouble down the road. Once you launch, you want to have as many tasks on “auto-pilot” as possible, because you can count on the occurrence of unexpected events. This brings us to our final point:
10 – Launch
Once you have your small business plan in place, it’s time to launch. Launching your business as an entrepreneur is stressful and hectic, but these stresses can be reduced with effective planning and preparation. Use our list above to make all the necessary plans and preparations to launch your business effectively. You’ll have a plan in place to maximize your chances of success and react to unforeseen circumstances as they arise.
Conclusion
Launching a business is a lot of work, and the work won’t slow down once you get started. As long as you are prepared for these challenges and willing to put in the work to succeed, you have just as good a chance as anyone.
