Starting a business can be an exciting time for entrepreneurs – one full of big dreams for the future. But starting a business also involves considerable risk and requires a great deal of commitment (of both money and time) to succeed.
While it can feel overwhelming to start a business, following these steps can put you on the path to success.
1. Refine your idea
Even if you think you have the next billion-dollar idea, it’s important to think carefully about whether the concept is really a viable business.
“To truly understand the market and the needs of the market, you need to ask yourself a set of ‘Why’ and ‘What’ questions,” says Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council. the business? What is the problem you are going to serve in the market? ”
Start your idea past trusted people in your network and ask for honest feedback. Think carefully about criticism you receive and see if it can help you hone your idea. If possible, find a way to test your idea, whether it’s a pop-up store or a free service to some potential customers to see if the demand meets your expectations.
2. Create a budget (for yourself and your business)
While you may not need a formal business plan, you need to have an idea of how much money you need to run the business and how your business will earn revenue.
“Finding out the input costs and the selling price and all the components that make the economy work is very important,” says Tammy Halevy, executive director of Reimagine Main Street.
If you do not plan to draw a salary during the early years of the business, you will need personal savings or other funds set aside to pay for your living expenses until the business gets off the ground.
3. Find Out How To Finance Your Business
While there is no one “right” way to finance a business, this decision will later have implications for the value of your business and its financial flexibility. The best source of capital for your company will depend on several factors, including your industry, your access to investors and your feelings about debt.
Keep in mind that the vast majority of businesses are self-financed by the founder or with money from family and friends, as more professional investors or lenders usually want to see a record before separating from their own capital.
4. Build your team of advisors
At a minimum, you need a small business lawyer and an accountant. They can help you figure out the best structure for your business (whether it’s a sole proprietorship, a limited liability corporation or another structure), and make sure you set aside the right amount of cash for tax purposes.
“Hiring a good accountant can be the best use of your penny if you are anything other than a sole proprietor,” says Venkat Krishnamurthy, president of small business networking platform Alignable. “You can do it yourself, but it’s not too much money and it will serve you well in the long run.”
5. Rent carefully
Once you can start expanding your business, take your time to build your staff. Remember that the first few appointments will really help determine the culture and tone of your workforce.
“Adding an employee is a big step because it will change the way you spend your time,” says Greg Ott, CEO of small business credit market Nav. “But it can also be the key to unlocking the growth of your company. It is truly the path for most businesses to scale and grow and to generate more revenue. ”
6. Market your product or service
It’s never too early to start marketing your business. The best approach will depend on your industry and your budget, but it’s important to start thinking about branding and marketing early on.
While this is likely to involve building a website and using online marketing tools, it is also important to focus on building your network and word-of-mouth referrals. Try a few different methods to see what seems to work with your audience.
7. Prepare to turn
Remember that Amazon started as an online book sales company and Netflix sold DVDs by mail. Successful businesses change with the times, so expect to make changes to your business model if you see that one approach does not work.
“A lot of businesses end up in a different place than their initial starting point,” says Luis Ramos, director of business consulting at Accion Opportunity Fund. “That is why I always test the importance of getting out there and testing the product first. In the end, you can learn pretty quickly that what you think the market wants is not what it wants or needs. ”