A lot of people have dreamed of establishing their own business or have thought of creative ideas they want to profit from. However, not everyone has the drive to pursue these dreams. You read about finance on sites such as Live Well and start to develop a profit-oriented, business-centric mindset. And now, you want to become an entrepreneur and have control over your work. But, you don’t know where to start. If you have the drive and dream for entrepreneurship and want to turn it into a reality, here’s a simple guide to starting a small business.
Generate an Idea
Every business starts with an idea. And it doesn’t have to be a completely fresh or innovative idea that no one has ever thought of before. Don’t pressure yourself into becoming the next Steve Jobs. It’s completely okay if the business idea you’ve come up with already exists. Just make sure to improve upon that idea by adding in some innovation and your unique spin to it.
What’s important when generating a business idea is that it answers the following questions:
- Is there a need for this?
- Does it address an issue or problem that people face?
- Is there a demand for this?
Conduct a Market Study
Now that you have an idea you want to pursue, you must put it to the test by seeing if people are interested in the product or service you are offering. Conduct a survey that presents your business idea to random people and get their input. Ask them if they like the idea, if they would be interested in purchasing your product or availing your services, how much they are willing to pay for that product/service, what factors would affect their purchasing power, which features they like best, which features they’re not that interested in, and areas for improvement. Also, don’t forget to ask some demographic questions to help you identify your target market.
Create a Business Plan
A business plan is an outline of your business. A traditional business plan is typically comprised of the following parts:
- Executive Summary. Think of this as the abstract of your paper. It summarizes the entire document by highlighting essential information.
- Company Description. This includes the business name, the company’s vision and mission, the objectives of the business, your business goals, and the size and location of the business.
- Products/Services. What are you selling? What need or problem does your product/service address?
- Market Study. This includes marketing analysis and marketing strategy. In this portion, you’re supposed to show your target market, the competitor analysis, a demand forecast, pricing, and promotion, among others.
- Design and Development Plan. This features the design of the product and how it will be developed. It also shows how much it costs to produce the product.
- Operations and Management Plan. This shows the business structure and how the business will be operated.
- Financial Analysis. This includes the capital needed to start the business, operating expenses, expected growth, return of investment, and other financial factors.
Plan the Finances
You need to figure out how much you need to start the business and where you’re going to get that money. To estimate the amount you need for initial investment you must consider one-time costs (permits, equipment, legal fees, etc.), operating expenses, and monthly dues such as rent, utilities, and salary.
Get the Legal Work Out of the Way
Now it’s time to register your business, get the necessary licenses and permits, set up a bank account, and if needed, get a trademark, copyright, or patent for your product.
Develop Your Product/Service
Before you go and sell your product, you must first develop a prototype. The prototype is essential to iron out the kinks and improve the product so that the customers will be able to get the best version of your product. To develop your product you need to source the right parts and develop a good relationship with your supplier and/or manufacturer (for smoother business transactions in the future and customer loyalty perks). For skills-based businesses, this step would include creating a portfolio of your work.
Build Your Team
You need the best hands on-deck if you want your business to run smoothly. Create an organizational chart and make specific job descriptions for each position. Once you’ve established that, you can now start screening people for the job.
Decide on a Location
This step isn’t necessary if you plan to set up an online business. If that is the case, though, you still need to establish your website or whatever platform you decide to conduct your business on.
If you will be having a physical location for your business, consider your options such as a home office (if you’re only handling a small team), a shared office space, or buying/leasing a commercial place. Consider whether your chosen location is appropriate for your business operations. Also create a layout of the place, considering equipment and flow of the process from station to station.
Promote Your Business
Now that everything is set, you need to promote your business. All your efforts would be put to waste if no one knows about your business. Create a market plan to draw in customers and don’t forget to establish an online presence so people will know where to find you.