How
to Start a Business: A Step-by-Step Guide
Starting a business can be
hard work, but if you break down the process of launching your new company into
individual steps you can make it easier. Rather than spinning your wheels and
guessing where to start, follow this 5-step checklist to transform your
business from a lightbulb above your head into a real entity.
How to start a business
1.
Refine your idea.
“In the words of Simon Sinek, ‘always start with why,’” Glenn
Gutek, CEO of Awake Consulting and Coaching, told Business News Daily. “It is
good to know why you are launching your business. In this process, it may be
wise to differentiate between [whether] the business serves a personal why or a
marketplace why. When your why is focused on meeting a need in the marketplace,
the scope of your business will always be larger than a business that is designed
to serve a personal need.”
2.
Write a business plan.
Fledgling business owners can make a lot of
mistakes by rushing into things without pondering these aspects of the
business. You need to find your target customer base. Who is going to buy your
product or service? What would be the point if you can’t find evidence of a
demand for your idea?
Conduct
market research.
Conducting
thorough market research on your field and the demographics of your potential clientele
is an important part of crafting a business plan. This involves conducting
surveys, holding focus groups, and researching SEO and public data.
Market research helps you understand your
target customer — their needs, preferences and behavior — as well as your
industry and competitors. Many small business professionals recommend gathering
demographic information and conducting a competitive analysis to better understand
opportunities and limitations within your market.
The
best small businesses have differentiated products or services from the
competition. This significantly impacts your competitive landscape and allows
you to convey unique value to potential customers.
Consider
an exit strategy.
It’s
also a good idea to consider an exit strategy as you compile your business
plan. Generating some idea of how you’ll eventually exit the business forces
you to look to the future.
“Too
often, new entrepreneurs are so excited about their business and so sure
everyone everywhere will be a customer that they give very little, if any, time
to show the plan on leaving the business,” said Josh Tolley, CEO of both Shyft
Capital and Kavana.
“When
you board an airplane, what is the first thing they show you? How to get off of
it. When you go to a movie, what do they point out before the feature begins to
play? Where the exits are. During your first week of kindergarten, they line up
all the kids and teach them fire drills to exit the building. Too many times I
have witnessed business leaders that don’t have three or four predetermined
exit routes. This has led to lower company value and even destroyed family
relationships.”
A
business plan helps you figure out where your company is going, how it will
overcome any potential difficulties, and what you need to sustain it. When
you’re ready to put pen to paper, use a free template to help.