So you’re thinking about starting a business? That’s great, in a country like USA 543,000 small businesses start each month, however many businesses that start off well face many problems and can’t continue due to unanswered questions from the beginning of the project and incomplete strategies, but we are here to help you overcome these obstacles and here are 5 major steps in starting a small business.
Step (1) Write your business plan:
A business plan is an important map for your business and one of its cornerstones. This document usually projects 3-5 years ahead and outlines the way a company intends to take to grow revenues.
There are several elements to be included in your business plan, like:
1) Executive summary: The executive summary is considered the most important part of your business plan, especially for a newly starting business. This section briefly tells your reader where your company is, where you aim to take it, and why your business idea will be successful.
If you are just starting a business, you won’t have as much data as an established company. Instead, focus on your background and experiences as well as the decisions that made you start this particular business.
Demonstrate that you have done thorough market analysis. Include information about a need in the market you’re targeting, and how your particular solutions can satisfy it. Convince the reader that you have what it takes to succeed in your target market, then point out your future plans. Also, if you are seeking financing, the executive summary is your first chance to attract a potential investor’s interest.
2) Company Description: this part of a business plan is a high-level review of the various elements of your business and can help readers and potential investors quickly understand the goal of your business and its whereabouts. You should describe the nature of your business and the marketplace you’re targeting and explain how your products and services meet the needs of your target marketplace.
3) Market analysis: In this section of your business plan you should point out your industry and market knowledge as well as your research findings and conclusions. You should include:
a) Industry description and outlook and information about your target market.
b) Size of the primary target market and how much market share you can gain.
4) Organization and management: In this section, you should include: Your company’s organizational structure, details about the ownership of your business, profiles of your team and their qualifications. Getting help from experienced personnel can increase the chances of success of your business and increase the trust of potential investors in your business.
5) Service or product line: This is where you describe your service or product, pointing out the benefits to potential customers and focus on why your particular product will fill a need for your target customers.
6) Marketing and sales: This is where you make customers, the beating heart of your business. Your marketing strategy should be unique to your own business and always developing with the stage your business is in. For a starting business, there are common elements to be included in your marketing strategy, like: a market penetration strategy, a growth strategy and a communication strategy through which you will reach your customers, like advertising or personal selling or printed materials or all of them combined.
7) Funding: you should determine whether you need funding or not, and if you do, point out your current funding requirements and any future funding requirements over the next 3 years.
8) Make your business stand out: When starting a business, be sure to understand what makes your business unique. What needs does your product or service fulfill?
In markets with several needs, try excel in one product or service alongside providing the usual products or services needed by that market.
Step (2) Choose the location of your business:
Choosing a business location is probably the most important decision a small business startup will make and so it needs thorough planning and research.
Besides choosing a location that allows exposure to potential customers, there are other things to be considered when choosing a location for your business:
1) Brand image: is this location consistent with the image you want to maintain?
2) Whether the neighboring businesses are complementary or competitive.
3) Will this location support future growth?
4) The hidden costs, like renovation, decoration and upgrades, is something that is usually overlooked and one that can cause major hindrances ahead.
5) Understanding the laws regulating the area where you want to locate your business is very important to avoid any legal problems and also check if your business is compatible with a government’s financial incentives for small businesses or not.
Step (3) Business financials:
Before starting a business, it is very important to get your finances in order.
Estimating startup costs is essential. To determine how much seed money is needed, you must estimate the costs of doing business for the first few months. Determining costs is very important in laying out the financial plan for your business. Some costs will be one-time costs as the price of a sign for your business. Some will be ongoing costs like insurance, while other costs will be fixed like rent and wages or variable costs like shipping a packaging. Assessing these costs for the first few months paves the way for a sound financial plan.
Since starting a business can be a strain on personal finances, you should be patient. It takes time for new businesses to turn into profit and so you should be patient and conservative as any imbalance in your personal finances can affect your business greatly.
One more thing, sometimes additional funding will be needed for your business, therefore you must put in mind types of financing and its regulations as well as the ability to repay the money you borrowed for your business.
Step (4) Register your business:
Choosing a name for your business is important in planning a business. Some startups choose a name that reflects the idea of their business but fail to consider other things that are also important in the long run, like how will that name look on the web, as part of a logo and on social media. Also what connotation does the name imply? Does the name appeal to your market? Among many other things.
What’s left is registering your new business name and applying for a trademark.
Step (5) Hiring and retaining employees:
There will come a point where you will need employees to help you with your business, and there are various elements that must be put in regard, like:
2) Writing effective job description to make sure that the applicants fully understand their roles and what the job requires.
3) Thorough pre-employment background checks are very important when it comes to hiring new employees.
4) Required employee benefits like insurance, medical leave and workers compensation play a major role in whether a potential employee will decide to work for you or not, since these benefits affect the employee and his family.
Now you have a strong base to help you start your own business and work your way through the basic steps to a successful business.