After interviewing several young entrepreneurs, I wanted to write a simple guide to starting your own business.
How to Start a Business
Start with an Idea
The first thing you need to do when starting a business is to start with a great idea. It could be something that you are good at doing or something you’ve been thinking of doing for a while. One piece of advice I received from a successful entrepreneur was to write down my business ideas as they came to me. I found that, over time, I was generating lots of new ideas without even trying. When you challenge your mind to continue thinking of ways to make everyday tasks easier or more enjoyable, you’ll be surprised how fast and frequently ideas come to you.
What ideas are best? Your business should be one that adds value to the customer. Do I really need another set of knives? Probably not, but if your knives can cut better than the ones I have, you are adding value.
Find a Need
That brings me to the next point. Your business should serve a need. What if I’m a caveman and I don’t use knives to eat? Then your product would not be filling my need. But all you have to do is find the customers that do have the need. That’s the reason that I started this blog. I realized that young adults want to manage their own money, but they may not know where to start.
Write a Business Plan
The next step you need to take is writing a business plan. These are the general questions you’ll need to answer. How will my business make a profit? Who is my customer? When will I break even? How will I get to my potential customers? How do I protect my business? Inc.com has a really nice guide on how to write a great business plan. Remember that your business plan is a living document and it will change as your business grows and your needs change.
Write a Business Outline
Writing a business outline is a good starting point for writing your business plan. In your business outline you’ll write down every idea you have about your business and the answers to the general business plan questions. Use this outline as a brainstorm where you dump all of the ideas you have or want to have for the business. Then you can organize your thoughts in your actual business plan.
Pitch Angel Investors
Your financials show investors how they are going to make money. You will do this by telling the story with your financials to raise business capital. Investors want to know when you will break even and when they will get back their initial investment. If you’ve seen the show Shark Tank on ABC then you are familiar with pitching angel investors. You need to know your numbers. Deals are made on the numbers first then the business behind it. Without a solid financial plan your business will fail.
Market your Business
Your marketing plan details how you will reach your target customers. It will include the members of your target market and how you will reach them. You will need to conduct market research including taking surveys and polls to gather information relevant to your industry and business. After you do this, you can use channels such as email marketing to reach your target audience.
Set up a website
Your online presence is an important part of your overall branding strategy. Potential customers who are curious about you will usually do a quick Google search to find out more about you. If you don’t take control of your online presence you have no control over what results come up when someone does decide to Google you. I purchased my domain with a coupon I had through GoDaddy and I host the website with Hostgator. I’ve found these services to work well for the many websites that I own. Use the coupon code smallbiz01 to get $9.94 taken off the cost of your Hostgator hosting package.
Start a mailing list
“The money is in the list.” Companies like Godiva, who gives away free chocolate each month to customers on their mailing list, understand this concept. With a targeted mailing list you can stay in touch with your customers. Two popular online mailing software programs are MailChimp and Aweber. Both will allow you to create and design amazing newsletters. You should use your mailing list to provide even more value to your most engaged customers. You could offer discounts or coupon offers specifically to them.
Protect Your Assets
Choose the Right Legal Structure
Decide what sort of business structure you will want for your business. You might be best protected with an LLC, or an S Corp may work better for you. There are different benefits for each legal structure. LegalZoom.com is a good place to start for information on the structure that could work best for you.
Depending on what your product is or what industry you are operating in, you will need to get some sort of business insurance. A general liability policy may work for most businesses but you should contact your insurance agent to find out what insurance you will need to protect your business in the event of a lawsuit.
Protect Your Intellectual Property
You should file for patents for any innovative products or processes that you have. You will also need to protect your business name and logos with trademarks and copyrights. The worst thing that could happen to your business would be someone stealing the rights to your proprietary products.
Open your Business!
Congratulations! You are open for business. Now you get to work your business and build an asset that will continue to generate income.
For a more detailed guide, visit the Small Business Administration. They have a step by step guide and links to the resources that will assist you along the way.
What did you do when you first decided to start your business?