The Process of Starting a Business
Owning a fully-functional business is a great way of enjoying self-employment and overall financial breakthrough. However, the challenge lies in the startup of that business. Too many people have attempted to start a business, only to give up when they start to experience the losses.
With the right strategies, you can be sure of starting a business and see it turn into a mega company in the future. But how do you go about it? Here is a look at the process of starting a business;
1. Evaluation and Preparation
Before you start thinking of how your business will be making money in the future, you will need to evaluate what you want, and what you are perfect at doing.
Ask yourself why you want to start the business. Do you need it for financial reasons or you just want to be your own boss? You should also consider the types of skills you have in the specified business. Is it a service or a product based business? Will you work part-time as you carry on with your current job, or you will work full time?
As you evaluate yourself and your situation, you will need to set goals and determine your strengths as well as your weaknesses. Keep in mind that a new business will demand most of your time, so ensure that you know how you will go about that.
2. Understand the industry
Understanding the specific industry of your business helps you to be more successful and secure. Now that you are focusing on a business that suits your lifestyle and goals, you will have to dig deep in understanding the target industry. The industry entails the customers, competitors, as well as other prerequisites needed to run the business.
Here, you can utilize popular search engines, like Google, to help you know about your major competitors as well as customers. You can also swallow your pride and talk to professionals in the industry. Other than that, you may find plenty of industry magazines, news sites, or books that might help you.
At this point, get to know the following;
- The demand for the product/service you are dealing with
- Cost of delivering your product/service to the market
- Ease/cost of acquiring a customer
- The strength and weaknesses of your competitors
You should have an idea of how much it will cost you to deliver your product or services.
3. Register/Insure the business
When you are ready to go into the market and battle with your competitors, you’ll need to register your business to make it real and legal. Ensure that you know the various business formations available; Sole Proprietorship, Partnership, Corporation, Limited Liability Company, along with their pros and cons. After the registration, you will be handed the permit and license, which makes your business legal.
It is advised to find a suitable insurance company to secure your business, even if it has not kicked off yet. If you cannot handle the accounting correctly, hire an appropriate accountant for that job.
4. Develop a business plan
While many people opt to develop a business plan before anything else, it is somewhat professional to develop it when you know what you want in the market, and if you have your legal documents. The business plan is a blueprint of how the business will run and is also used to attract an investor, partners, or a bank loan. Through the business plan, you will know how much you will need to start the business, and where it is projecting.
5. Work on the funding
The type and size of your business might force you to seek help from external sources. As you think of the perfect financial help for your business, here are some options to consider;
- Friends and family. The first people to go to when you are starting your business is those close to you.
- Bank loans. The bank can offer various financing options, like personal loans or private financing from their credit cards.
- Business angels. You can talk to a business angel, and provide them a detailed plan of your business to convince them.
- Venture capital firm. Some organizations are established solely to fund businesses.
Choose a financing option that is suitable enough.
6. Consider the location
When you have everything in place, you will need to decide where you want the shop to be. Ideally, set up your business location where it is easy for your target customers to get to you. Also, you should set it up where you can access various services and related organizations with ease. Consider how much it will cost you to rent the place or access it daily.
Once your business is up and ready to run, you will need to determine how things will be run in that business. Will you need to hire people? What strategy will you use?
As you prepare to start your business, keep in mind that it will never be successful overnight. Have patience, determination, and get the necessary help from an experienced business person.