Running your own business is not a simple business, but it is a good career and lifestyle choice. You have to devote your time and concentration to it. Be prepared to continually be on the go until your business is established and takes off. Opinions differ on how to start a business.
1 – Have an idea
Find an idea. First of all, you will need an idea to start a business. This should be something you are passionate about, since your new business is going to take up a lot of your time and money.
- Generate business ideas by identifying things that people need that no one else currently offers in the market, something that doesn’t exist in your area, or that you can offer better than anyone. For this, brainstorm with close relations to bring out creative ideas.
Examine the credibility of your idea. Before going too far, think about the credibility of your idea. Is it something that people will actually buy? Will your idea be profitable enough to be viable? You also need to make sure your idea is doable. For example, a computer that can magically make food out of a stream of air is an impossible idea unless you’re Patrick Stewart.
Make sure your idea is unique. Whatever the nature of your idea, make sure it’s as exceptional as possible. This will help you eliminate or fight competition in a meaningful way and give your business a better chance of success. It’s not enough to think about slightly modifying a currently existing product, for example, making blue colored Redvines or something like that, because often that’s not enough to start a business, so you have to do more efforts to imagine something more substantial.
2 – Make a business plan
Determine the operating cost. You will need to present a solid business plan to investors and the best place to start would be to determine the estimated operating cost. This will help you estimate the amount of money needed to produce the product or offer the service you intend to create. This cost includes, but is not limited to, production costs, shipping costs, taxes, worker salaries, workplace rent, etc.
- Knowing the operating cost will be key in determining if your business will be profitable, as you will need to do a lot more to stay in business.
Identify your potential market. Be realistic. How many people are really going to use your business? How much will they be willing to pay for your services? If your estimates are significantly lower than what is needed to keep your business running normally, then you need to revise your estimates or change your plans.
Identify obstacles. You will need to plan ahead to deal with any issues that may hamper the operation of a business.
- Assess your competitors, if their market shares or product offerings are too strong and stable, then you will find it difficult to gain a foothold in the market. No one will want to buy an item that is as expensive, if not more expensive, than a great product or great service that already exists.
- You will also need to study related regulations and laws, especially regarding taxes. Check with local authorities and request information from the tax office .
- Make sure there aren’t prohibitive costs, such as equipment, that are too high to make a business profitable. For example, the automotive sector only really took off when Ford succeeded in developing more efficient manufacturing equipment to produce inexpensive cars.
3 – Define a business strategy
Develop a budget. Once you have a general idea of the capital needed to make your idea a reality, develop a budget to implement your business strategy and set the amount of money allocated for advertising.
Find ideas that fit your budget. Once you have determined the amount of your financial resources, identify the costs of different types of business strategies and come up with ideas for them, while staying within your budget. If you have a lot of money to spend on marketing, for example, you can opt to shoot a commercial. If your financial means are limited, you can make do with social media, which, while being very effective, requires very little money.
Plan the date and place of the marketing. Once you have defined your type of business strategy, think about the best places to advertise, especially the times of the day, month or year that will allow you to fully reach your target market.
- Be sure to use a marketing strategy appropriate to the type of people likely to be interested in your products or services. The use of social media is of little interest, for example, to advertise a cruise reserved exclusively for people aged 55 and over. On the other hand, if you’re advertising your new dance club, a print newspaper is probably not going to be your best advertising medium. It’s also pointless to advertise in Seattle for a service only available in Chicago, so consider geographic location as well.
- If your services are seasonal, determine the best time of year to advertise. Remember that in order to reach viewers of a certain age range, your television ad must be scheduled to air when those viewers are tuned in.
4 – Obtain funding
Contact your bank. Contact a bank with whom you already have a good relationship. Find out what kind of business they fund and how they might benefit your business. You will be more comfortable dealing with a bank you already know, as they will be able to access your financial records easily and will be more willing to finance your project.
Contact local investors. If bank loans are not enough, you can try to meet local investors. It could be that a local tycoon or other equally wealthy people have a stake in the success of your project. Look for people in your area who have funds and sufficient motivation to help you.
Contact venture capitalists. You can consider partnering with a venture capital firm that will provide you with experience, contacts and logistical management support. Also contact angel investors. They can help you if they see potential in your project. Some work through an association or network.
Talk to your family and friends. Some people who have known you for a long time will certainly trust you, especially if they know that you are hardworking, serious and ambitious. Be honest with them and they will support you to launch your business, both financially and on legal or marketing aspects. Be clear with them and tell them frankly that you will certainly not be able to repay their investment in the short term.