Starting and owning a business is a lifelong dream for many. However, it can feel awfully intimidating to actually take the leap and pursue your business idea. To make it easier, here’s a list of four essential steps that you need to take if you want to start your own small business.
Market research is an essential part of any business strategy. By conducting market research, you’ll more likely be able to identify gaps in the market you’re attempting to enter and find opportunities to profit.
If you’re thinking of starting a business, then you probably already have a general product or business idea in mind. But will it be viable in the marketplace? Or are there competing businesses already fulfilling the needs of your potential customer base?
For example, if you want to produce a line of CBD-infused products, you’ll have to scope out the competitors. Established companies such as CBDfx already offer a variety of CBD-infused products, so, in this case, what would your company offer that they don’t?
In many cases, successful small businesses either cater to a growing demand for a product or service, or else function in a niche market where there’s less competition. In order to do proper market research, you’ll want to ask a few questions:
Once you attain a solid understanding of the marketplace and answer these questions for yourself, you’ll be able to move onto the next step.
A business plan is essentially an outline of how you will run your business. It should state your company’s short- and long-term goals and describe how you will go about achieving them.
In a typical business plan you’ll also lay out all of the general operational elements of your business. You should describe how you’ll finance it, how you plan on making a profit, and what your marketing strategy will be, in addition to stating the purpose of different roles within the company, particularly with regard to the executive and management teams. To create the most effective plan for your company, try using LivePlan’s online business planning software, which supports over 850,000 small business customers.
A business plan is important because it gives you a sense of structure and organization when starting out, but that’s not all. If you plan on getting a business loan from the bank or securing investors, they’ll likely want to see a comprehensive business plan before giving you any money. That’s because even if you have a great idea, they want to know that you’ve taken the time to think out how you’ll sustainably generate profits.
Starting a business takes money, so get your finances in order before you decide to open up shop. How much initial investment your business will require ultimately depends on the type of business you plan on running—it may cost a few thousand dollars, it may cost millions. In either case, you need to figure out how you’re going to cover those initial costs in the period before you start making a profit.
Start by making a budget that details all of your projected expenses. Be as comprehensive as possible and write down everything from potential big-ticket items, such as employee salaries, leasing, and marketing costs, to more minor expenses, such as trademark and licensing fees. With a detailed budget, you’ll gain a better understanding of exactly how much money you need in order to open and maintain your business for a given period.
Once you know how much money is needed, you can decide how you want to finance your business. If you don’t have enough capital on hand, there are a number of ways to secure financing. Go to the bank and apply for a small business loan, find private investors using sites like AskForFunding.com, or even try crowdfunding your business. All of these methods have their own unique benefits and risks that you should analyze before making a decision.
After you’ve done your research, fleshed out your plan, and sorted out your finances, you need to build a team. Hire exactly as many people as you need—remember that, in most cases, it’s better to underhire than to overhire, as those extra salaries can quickly add up and end up costing you a lot. And don’t just hire more people because you have the capital, only take on employees that are absolutely essential.
Most importantly, hire phenomenal employees. Surround yourself with bright, hard-working people who believe in your company. By building a great team, you’ll be setting yourself up for future success.
Starting and running a small business can be extremely difficult, and comes with many risks. But the many benefits, such as being your own boss and pursuing your passion, can end up outweighing those risks when it’s all said and done.