DETROIT – Starting a business, even on a small scale, is no small responsibility. This big dream of yours is backed by big challenges and struggles if you are unaware of how to start it right. Here are 10 steps to the right business setup to spread this awareness.
Step 1: Evaluate your business idea
Research, share and take feedback from others, and shortlist! Find out the potential for the growth of your idea. The idea with the highest potential is generally the most fruitful; do not opt for the one confined to a small market segment with hardly any expansion scope.
A great business idea becomes possible with the highest level of creative and judgmental thinking. So, it is worth brainstorming for ideas.
Step 2: Perform market research
You need to perform market research because it is an indispensable market research tool, as it helps determine whether your chosen idea can truly attract customers. It assesses the current trends and customer behaviors for shaping your strategy.
You should even go for competitive research to evaluate the product demand, local prices, and demographic data. Collecting these details via surveys and interviews of probable customers is possible.
In short, you come to know who your customers are and how to create selling products and services. It also helps in deciding your branding elements and business name.
Step 3: Business structure and logistics
It is now time to start giving your dream a reality. This is when you define your business in the following forms:
- Name: This is what you can obtain during market research. It should be appealing, easy to understand, and relevant to what you have to offer. For digital growth, consider buying website domains so your customers can find you easily online; they are usually affordable.
- Structure: This can be a sole proprietorship, Limited Liability Company (LLC), partnership, or corporation. Deciding this part is crucial, as it affects your ability to fund, pay tax, and manage personal liability. It is wise to consult an accountant or attorney to make the right decision.
- Location: You need to choose the place of your business headquarters and its operation style, such as a retail shop or a digital portal. In the case of the former, you must also consider issues such as parking, traffic, laws, utilities, delinquency, and local competition.
After determining these factors for starting a business, there are some more tasks to consider:
- Register your business.
- Apply to obtain tax IDs, licenses, permits, patents, and trademarks.
- Open a business bank account.
- Choose the best online credit card processing for small business
- Purchase insurance policies.
Step 5: Get funds
May it be any business, a startup always needs funds. Without it, no business can perhaps start. The amount needed is dependent on the type of business. Your business plan must have an operating budget for one year.
No matter which tool you use, include every probable expense, including overhead costs. One way to know how much you need and what profit you can get is to calculate fixed costs ÷ (item price – variable costs).
Once the yearly budget is set, raise funds via different sources such as personal savings, angel investors, borrowing from friends and family, small business loans, venture capitalists, crowdfunding, and incubators.
Step 6: Create a business plan
With the business idea, market research, and money determined, it is time to create an outline or blueprint of your business. This is a good, simple business plan.
The plan consists of the activities to be done in the upcoming short spell of one to three years. It should also have market research results and a cash flow analysis based on predicted expenses and earnings.
Step 7: Consider having co-founders and Leaders
This is optional but worth having for sharing the load and getting the benefits of lacking skills. However, just ensure that no single person gets a significant share of equity just because of their presence in the beginning.
You should consider building a team of people such as freelancers, consultants, employees, and contractors for smooth operations. Let this team choose an accounting system, select vendors, and hire other skilled personnel.
Step 8: Make prototypes
This is essential if you want the outcome right. Consider working with freelancers to build product prototypes. For offering a service, this may include designing copyrighted products for only your employees in the field.
Once built, put the product into test mode by establishing focus groups or scenarios in which randomly chosen people test your product and provide their fair feedback.
Step 9: Step into production
Once the prototyping gives you the most efficient design, you can start the actual production. Now, you should buy all the essentials to produce, which include configuring a manufacturing process, setting computers, and hiring managers and specialists.
Step 10: Spread the word
This is where marketing and public relations will play their role! Spread the word to your target audience using different media such as social media platforms and ads.
Following these steps will make starting any business free of hassles.
About Sarah Bullough:
Sarah has garnered success with the help of keen communication skills and the ability to expertly navigate through the fine print. With almost a decade of experience in the ever-changing financial industry, she has established herself as a stellar finance writer. Her financial acumen is second to none and this has helped her excel in the finance writing sector.