If you dream of owning a business but don't know where to start, we break it down into seven easy steps.
While some people are happy to be worker bees, others dream of being able to run the show.
If being a business owner is on your bucket list, you’re in luck. The process isn’t nearly as difficult as you might think.
Of course, there are many ways to start and run a business, and this article isn’t intended as legal advice or a guarantee of your success. However, if you want to run a business that is a step above selling Tupperware on the side, here are seven steps to help you hit the ground running.
Step 1: Start with the right idea
Your successful business starts with the right idea. How do you know if you have the right idea? Let’s answer that question by asking some more questions.
- Are you passionate about it? Or at least mildly interested?
- Do you have expertise in the area?
- Does your idea fill a need?
- Can it be profitable?
- What’s the competition like?
- Do you have access to any needed resources or supplies?
The best ideas often seem to be the simple ones. If you have to go to great lengths to explain why someone might want to buy your service or product, it may be time to head back to the drawing board.
Maybe take a look at other areas with similar demographics and see what businesses are thriving there but aren’t available in your local community. Talk to family and friends or head online to check out what other businesses are doing and how you could possibly do it better. Perhaps you have a hobby that could be turned into a business.
Step 2: Create a plan
Once you have a fairly good idea of your business focus, it’s time to start making some plans – not plans in your head but plans on paper.
Now, some people get stuck on Step One because they fear making a mistake in their business selection. The real mistake is letting the idea phase paralyze you.
At this point, your idea doesn’t need to be golden. You’re not spending any money on it yet. You can change it, or even pitch it, if it ends up not working out.
Creating a formal plan is one way to decide whether your business will be a winner or loser. And by formal plan, I’m not talking about a shiny dossier or professional business plan. I’m talking about you and a notebook sitting down and writing out what needs to happen to transform your “makes-me-giddy” idea into an actual moneymaking business.
My favorite business planning method is to reverse engineer the process. In other words, start with what you envision your established business looking like. Then, look backward and determine what needs to happen to reach that ending point. Make sure you are writing down firm dates for each step in the process.
Don’t worry if you’re not sure whether your timeline is realistic. That’s what Step Three is for.
Step 3: Bring on the experts
As a new business owner, you need a little outside perspective. Fortunately, there are numerous places to get free and unbiased advice.
You can read more about your options in this article regarding the three resources every new business owner needs to know.
I will add that when you get this unbiased advice, please take it to heart. As an unfortunate example, a few years back a couple in my community poured their life savings and retirement money into a business despite being advised by a counselor from SCORE that it wasn’t a good idea. They disregarded that advice and the business failed, along with their marriage.
Step 4: Take care of the legalese
I won’t belabor this point, partly because I don’t want to bore you and partly because it varies so widely from state to state and municipality to municipality.
However, you do need to take care of the legal and financial details before launching your business. That may include selecting the right business structure (the Small Business Administration has a good rundown of the various types or you could read our very own Stacy Johnson’s advice), opening separate bank accounts, applying for tax identification numbers, and receiving any necessary permits or licenses required in your jurisdiction.
Advisers from the SBA and other resources may be able to help you navigate the necessary paperwork and provide basic guidance. If you’re planning to spend a lot of money on your venture, you may want to pay an attorney to make sure everything is on the up and up before your business launches.
Step 5: Find some cash
No, there are no government grants for small businesses.
Some small-business owners open their own wallets or fire up a credit card for startup capital. If your pockets aren’t that deep, you could try crowdfunding or, for service-based businesses, use the Internet to minimize startup costs. There’s also microlending, friends and family members, or bank loans to consider.
For more information on your options, including government small-business loan programs, go to this article about how to find money to start a business.
Step 6: Market, market, market
You have a plan. You have the paperwork. You have the cash.
It’s time to launch!
A successful business is as much about having a good marketing plan as it is about having a good idea. You need to let others know about your fabulous new product or service, and asking your Facebook friends to share a status update simply isn’t going to cut it.
Since your business is new, you probably don’t have a lot of money to spend, but that’s OK. Constant Contact has put together this rather solid list of 10 ways you can market on a shoestring.
Step 7: Grow smart, not fast
Finally, don’t make the mistake of getting too big too fast. Hiring on employees right away can stretch your budget thin. Expanding your product line or clientele rapidly could mean quality suffers and customers are lost.
Slow and steady wins the race, and the same can be said for business success. Make sure you have the capital and the market data to back up any expansion. Go back to your original plans and build upon those rather than haphazardly jumping on opportunities as they arise.
Starting a small business doesn’t have to be difficult or complex. These simple steps will get you pointed in the right direction and your business off on the right foot.