How to Start a Business in 10 Simple Steps
Starting a successful business is an alluring prospect for those with an entrepreneurial spirit. Running a profitable enterprise can set you on track to financial independence and help you realise some of your lifelong dreams.
The idea of being your own boss is definitely tantalising. In fact, according to Small Business Counts 2019, the Australian SME sector is growing exponentially.
But let’s be real, starting a new business can seem intimidating at first. However, everything becomes clear once you learn where to start and how to get going.
Regardless of whether you are a novice or seasoned entrepreneur, here are the 10 steps you should follow when building a business from scratch:
1. Invent a Business Idea
If you are thinking about starting a business, you probably have a rough idea of you want to sell or at least the industry you want to enter. The first step in building a business is developing a feasible business idea. There are a few ways you can pinpoint the most suitable products or services.
One, you can examine your hobbies, skills, profession, lifestyle, or even personality to find examples of goods and services that you can sell. Another way is to research existing businesses or products for unsatisfied market gaps.
A business idea does not necessarily have to be unique or otherworldly. But try to bring something new to the market or at least put a fresh twist on a familiar product or service.
2. Analyse Your Niche and Market
Once you have settled on a business idea, you should then conduct thorough market research into your niche. Size up the competition, learn the business landscape, and understand your potential customers.
Master all the ins and outs of the industry, from what sells and who is selling to who is buying. Doing so will help you understand the trade, limitations of the market, demand and supply, and more importantly, how your products or services fit in the target market.
3. Test Your Idea
Researching the market does not really tell you whether your business idea will work or not. You have to test your idea in the real world to determine its business validity. For starters, run your thoughts by some friends and family to get some feedback. If you need more in-depth scrutiny, talk to unbiased business coaches, consultants, or experts about your plan and what you hope to achieve.
You can also build prototypes and test services to sample your product or service in the natural market; this should give you more realistic feedback. Use social media, staging sites, pro bono programs, and focus groups to try out your products and services on actual consumers.
Make sure to fine-tune your business model, product, or service based on the useful feedback you get from trial runs.
4. Draft a Solid Business Plan
After a proof of concept, you will have enough information to write a business plan. A business plan is a formal document that outlines the goals of a business, and also describes the resources and efforts needed to achieve those goals. The SBA has a comprehensive guide on how to create a professional business plan.
Ideally, your business plan should explain your business model, challenges and risks, market projections, anticipated sales figures, and a course of action in great detail. It should basically be a blueprint for your entire enterprise.
5. Finance the Venture
One of the hardest parts of starting a business is acquiring enough capital to get the ball rolling. In fact, this is such a big problem that a majority of startups fail due to cash flow problems.
By now, you should already have an accurate budget for starting your business, so it should only be a matter of sourcing the funds. Financing a business is the first major commitment to the venture. Admittedly, it can be challenging to back a startup during the early stages. So, explore various business funding methods, such as:
- Investing your personal savings
- Collecting soft loans from friends and family
- Bring in investors
- Online crowdfunding
- Claiming government grants and subsidies
- Taking out bank loans
- Leveraging business incubators
6. Take Care of Enterprise Logistics
Set up the core enterprise infrastructure to enable the business. Establish the logistics of the business cycle — everything facilitating the supply, sale, and distribution of your products or services. Remember, every business has a unique set of requirements, so look for solutions that suit your particular business processes.
The requirements may include business premises, e-commerce website, retail front, suppliers, tools and equipment, staff, and distribution lines.
7. Seek Compliance with Business and Government Regulations
One of the most important decisions when setting up a business is choosing an ideal business structure. In Australia, you can register a business as a sole proprietorship, company, partnership or trust. The business structure you choose will determine the legal and tax guidelines that you must follow. Structure your business in a way that protects you from unnecessary liabilities and unfavourable business laws.
You will also need a licence or permit to run a business legally. Get a permit from the relevant local authorities or international governing bodies in case your business serves multiple countries. Keep in mind that licenses are only granted to organisations that meet specific compliance requirements. Some standard requirements include insurance, health and safety, quality, security, and legitimacy.
8. Brand Your Business and Advertise
Before you can start selling your products or services, you have to build a brand and get people interested in it. Branding is all about giving your business an identity — a way to set it apart from others. It involves coming up with a logo, colour scheme, catchy slogan, and business name. The brand should be synonymous with your products and services and the business itself.
Marketing is a whole other story of promoting your business to the masses and building a customer base. Depending on your target audience and business model, you can combine various digital marketing and traditional advertising techniques. Remember that marketing is a continuous process — it does not stop once the business gains traction. Your initial campaign should set the pace for a perpetual marketing strategy.
9. Launch Your Business
Set a date to officially open your business to the public, and device creative ways to trigger buzz around your product or service launch. Some of the most commonly used techniques to build market anticipation include pre-launch giveaways, limited time offers and discounts, pre-sales, and teasers. Build an enticing run-up to a climactic launch event.
The goal is to draw out the suspense for as long as possible and make a memorable first impression. However, a launch event is not just about showmanship or making an entrance; it can also give you some valuable insights into your brand’s appeal and the market’s reaction to your business. Plus, it can be a celebration to mark the hard work and triumph that brought you so far.
10. Prepare for Growth
There will still be a lot left to do after a successful business launch. With your boots on the ground, it becomes easier to read the business landscape more clearly and collect accurate facts and figures. Use that information to make projections and lay the groundwork for business growth. Identify your KPIs, sales patterns, bottlenecks, and growth curve to know where your business stands and where it is headed.
Hire a business coaching service to guide your enterprise on the correct path if you have trouble making the right business decisions. A business coach can help you stay true to your mission and on a steady path to success.
It takes a lot to build a successful business from the ground up. The best way to go about it is to break down the whole process into manageable stages and take one step at a time. When the going gets tough, remind yourself why you are doing it — focus on your endgame and let your motivation drive you. And do not be afraid to seek professional assistance whenever you need a helping hand along the way.