Millions of people fantasize about saying bye to their bosses and starting their own businesses, but very few ever do. That’s understandable. The process of turning a desire to create a business into something tangible isn’t easy. But for those who possess enough entrepreneurial spirit to power through the roadblocks, the financial and personal rewards business ownership can provide are unmatched by almost any other life experience. Although the journey for each business differs, all of them must pass through several of the same steps. This article will help you face these basic steps for starting any business with the confidence you need to help you realize your dream.
Identifying and Evaluating a New Business Idea
You probably already have some sort of idea of the business you want to start, but that doesn’t mean you should skip this step. Rarely is anyone’s first concept the best, and it’s far better to discover any fatal flaws at this early stage than when you have already invested more time and money in an unworkable idea. Therefore, go ahead and brainstorm at least five possible businesses, giving yourself the freedom to be as creative as possible.
Once you have a list of what you think are five good ideas, quickly evaluate them to see which one is the most worthwhile to pursue. A standard method of assessing a potential business is the SWOT method. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is a quick way to determine if a particular business is worth pursuing. For a business startup:
- Strengths are any skills or assets you already have that will set your future business apart from competitors or fulfill a need.
- Weaknesses include any obvious knowledge or resources that you will need to acquire.
- Opportunities are fortuitous outside situations you can exploit.
- Threats are existing conditions that can damage your business.
Creating a Realistic Business Plan to Set You Up For Success
After using SWOT or another method to narrow your list of potential businesses down to one, it is crucial to come up with a business plan. Many entrepreneurs who are self-funding their startups skip this step because they believe business plans are overly complicated and are only truly necessary for businesses that require outside funding. Yes, a good business plan isn’t easy to put together, but it’s even more critical if you are using your own money. After all, since the majority of small businesses fail within the first three years of starting, anything you can do to protect your investment is essential.
You can find online different business plan templates to help you assemble one that is relevant to your type of business, but ultimately, the plan will only be as good as your experience and the data you use to support it. That means if you don’t have a background in business or up-to-date and accurate numbers, you’ll probably need extra help. That’s fine. The more assistance you have now, the better. Hiring a business consultant is one option, but you can also use freely available assistance through a Small Business Development Center, SCORE, or your local Chamber of Commerce.
Choosing the Best Business Structure For Your Startup
Now that you have a good business idea and a workable business plan for turning that idea into something real, it’s time to decide how you want to structure your company. There are many structures a company can take, but for small businesses, the most common are sole proprietorships (SP), limited liability corporations (LLC), and S corporations (S Corp).
Each type of structure has benefits and drawbacks, and choosing the wrong one can be an expensive mistake. Seeking sound advice from an accountant or other business expert can save you a lot of money and headaches down the line. The IRS website is an excellent place to start exploring which structure may work the best for your business.
Keeping It Legal and Steering Clear of Common Pitfalls
When starting a company, it is vital that you do it properly. That means dealing with a lot of seemingly unnecessary paperwork and spending money you would rather save for other startup expenses. It is easy to overlook something crucial during this phase, so you will probably want to talk with an industry expert in your local area, such as a more experienced business owner, a local government tax office, or an attorney.
At the very least, all businesses will need to register the company’s name and obtain the proper permits or licenses. In most cases, you will also want to look into getting federal and state tax ID numbers, applying for an employer identification number (EIN), and purchasing various insurance policies, including liability, business interruption, unemployment, and workman’s compensation. You must also understand federal and state employment laws so you don’t run into trouble in the future.
Developing an Identifiable Brand For Your Business
A strong brand identity is critical when starting any company since it is the primary way your customers will recognize your business in a crowded marketplace. A great way to fast-track your brand’s identity is by using a logo. A logo not only visually represents the products or services your business sells but also promotes the culture and values of your company, so it needs to be good. While professional graphic designers are expensive, using an online DIY logo maker can deliver outstanding results for much less than a designer would charge you, so it can be a good place to start.
Once you have a logo you love, you will want to incorporate the design and color scheme into all of your business designs, social media posts, and marketing. You may also want to copyright your logo to protect yourself from other companies using it. In addition to choosing a logo and color scheme, consider other design elements, such as typographical elements, that you want to include in your advertising campaigns.
Securing Funding to Complete Your Business Goals
After filling out the framework for your new company, it is time to make sure that you have the financial backing to bring your business to the public and give it the best chance to thrive. While over 75 percent of small business owners pay for startup costs out of their pocket, not everyone has that option. Although there are dozens of creative ways to secure funding, some of the most traditional methods include bank loans, SBA loans, loans from family and friends, grants, and angel investors.
Even before securing funding, setting up a bank account in the name of your new business is a good idea and very recommended. A separate bank account helps separate your business from personal funds and may be required depending on the business’s structure. A business account may also be necessary for applying for lines of credit and credit card processing.
Setting Up the Physical Space For Your Business
With most of your business ready to go, you should already have the lease signed and the basic build-out completed. If not, securing the right location based on your business plan must be your top priority. But after the initial work is complete, you need to create an inviting interior design that is practical and meshes well with the image you want to portray to potential customers.
In today’s online and remote work world, many business owners are forgoing traditional offices and retail spaces and opting for 100 percent internet-based businesses. But even if you intend to work and run the business from your home, you will still need to create an environment that fosters productivity and professionalism.
Dare to Live Your Dream of Starting Your Own Business
The last step is perhaps the hardest of all–opening for business. But if you follow the steps above and remember the key takeaways below, you’ll discover that building a new business isn’t as impossible as you may seem at first:
- A business idea will never come to you fully formed, so don’t fall in love with a bad one. You must always be willing to evaluate it, adapt it, or eliminate it based on objective facts and figures.
- You don’t have to do it alone. The ability to quickly find the best experts to guide you in the right direction is even more valuable than knowing the correct answers 95 percent of the time.
- Create a business that represents you and what makes you unique as a person. From the products or services you offer to how you advertise, the more of you that you merge into your business, the harder you will be willing to work to make it successful.