So, how to start a business? In this post, we are going through steps that will help you on your journey of starting a business. It all starts with an idea, with the right people to execute that idea.
However, there are some things that need to be done as well before you can really start hammering that business together. Let’s get right into it.
1. Have a perfect idea
Every business, good or bad, begins with an idea. You should have some kind of vision of how things are going to play out. How your business will eventually become profitable and make you money.
When thinking about ideas, there are industries that are in different stages of their lifespan. Some business models are slowly decaying, while replaced by others. Consider the phase of your industry when starting a business. This is a crucial step when starting a business. If your idea doesn’t work, it is hard to make it profitable.
There is a silver lining, if you don’t know if your idea is good or not, you can still make a business plan based on it, and see with the calculations, if it can be profitable or not. Be realistic when making estimates, the only person/persons that is going to suffer from your over-optimistic calculations is you and possible investors.
2. Make sure you have the skills to succeed
If you had your business idea based on your current education or previous job, you might already have the skillset needed to succeed with your business. However, some fields of business require some expertise in their fields. You can either learn to do everything yourself or hire someone to do the things you can’t do.
Hiring someone right at the beginning will increase the risks, since you will have to pay your employees no matter what. It is not a valid excuse that your business isn’t yet profitable, so you don’t pay your employees. One safer option is to hire professionals to do certain tasks from Fiverr or Upwork, for example.
Even if you already have expertise in the field of your business, you might still need some basic knowledge about how to run a business and how the accounting and paperwork should be done. Take your time to learn what you can beforehand, so it doesn’t all come as a surprise when you have all the things running already.
Like Sun Tzu said: “Every battle is won before it’s even fought”. Make sure you are prepared when you start your business.
3. Make a business plan
When you think you have your business idea, that is good enough to succeed, you should make a business plan. Business plans are often wide and formal, and that way you can easily calculate everything you need and how you would make money with that business.
A business plan is a good way to benchmark your idea and business before putting any money or large amounts of time into your business. If your business does not look profitable on paper in any way you try to calculate it, chances are, it probably won’t be profitable.
If the business plan templates are too formal for you and you don’t understand everything said in it, you can look for professionals who can help you out with that. Another option is to do a more informal version of the plan. If you decide to do one yourself, with your own template, make sure you have all the expenses in it.
Formal business plan has its own benefits. If you wish to have a loan from a bank or get investors on board for your business, they usually require a business plan. I have a longer post dedicated just to why you need a business plan. You can read it here.
4. Evaluate risks
After doing a business plan, and calculating some risks, if you decide to proceed with your plan, do a plan for risk management as well. When you think beforehand about what kinds of risks your business might face, you can prepare for them better.
When you know the possible risks, you can have a plan on how you will manage them if they happen. It is true that you cannot prepare for everything, but having plans in case some of them happen, that will reduce the risks of your business overall.
Another benefit of doing risk management is that you will sleep your nights probably a little bit better, knowing you already have plans in case something unexpected happens. More about risk management in your business can be found in this post.
5. Get funding for your business
Now, you are getting closer to starting your business when you have all the plans and skills needed. Next thing is to get funding for your business. Some businesses don’t need that much capital and can be started with just pocket change. If this is the case, you don’t need anyone else onboard and can begin just by yourself.
If, however, you don’t have access to high amounts of cash right away, you might need some outside capital to start your business. One option is to borrow from your friends or family. Make sure you pay them back eventually, or you might risk your relationships with them.
Another option is to go get a loan from a bank. This way requires more formal applications and paperwork for it to work. But this is one option as well, if you need huge amounts of money and you don’t have anyone else to borrow it from.
The last option on my list is to find outside investors. Basically, this means you will sell part of your company in exchange for funding. This in some ways will reduce the risk you are taking, but you are also giving part of your company away.
Every situation is unique, so think about what funding method works best for your business.
6. Choose a name for your business
Now, when everything else is set up, you are left with choosing the name for your business. You might already have an idea of what you will name it. Check if the name is available and go ahead. Just keep in mind, that if you plan on building a brand, have the name broad or narrow enough so it gives you room to expand in the future if you want to.
With small businesses, one option to name them is with your name and the industry or product your business is selling. For example, Nick’s Pizza might work well, if your name is Nick and you sell pizzas. Use your imagination.
7. Make your business official
The last step after everything is planned is to make your business official. It can take some time to register your business, so have enough time budgeted for it as well. If you find it too hard to register your business yourself, you can seek professional help for this step as well.
Final words
This is a step-by-step guide to starting a new business. Starting a business can be a long process, so have enough time budgeted for it. It doesn’t have to be a full-time job right from the beginning. You can easily start one while still working your day job.
Other business-related posts can be found here.
Hopefully this was helpful to you, have a nice day.