Does thinking about starting a business make you nervous? Do you feel lost about what you have to do or where to begin? If you answered “yes” to all those questions, you’ve come to the right place.
As a first-time entrepreneur, you’ll be overwhelmed with all the information a Google search on “How to Start a Business” returns. From the endless perks that come with being your own boss to the never-ending steps you need to take and all the hard work required to get a business off the ground, it can be incredibly confusing to the point that you simply push the idea aside till you’re “ready”.
Entrepreneurship is no way a mean feat. It is a herculean task. It requires taking risks, being diligent, identifying what people need – and a whole lot more. The good news is we are all born entrepreneurs, at least according to Steve Welch, a successful entrepreneur in the biotech field and best-selling author.
Although difficult, starting your own business is doable. And the following seven tips will help you get the ball rolling.
1. Determine What to Sell and Research Your Market
Invention and entrepreneurship are two very different things. However, an inventor can be an entrepreneur, and vice versa.
There is a belief shared by many that a business idea has to be unique and disrupt an industry. But that’s simply not true. In fact, many are held back by this belief.
Going by the dictionary, an entrepreneur is someone “who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so”.
You don’t have to invent something to succeed in business, but your idea must meet a market’s needs. According to a CB Insights report, 42% of startups fail because there is no demand for their product or service – in other words, they are not solving a problem.
To avoid failure, it is essential that you find out if there is enough demand for your product or service before you start. You can do this by identifying the demography which you intend to sell to and determining the value you’re adding to their lives.
Once you’re certain there is a demand for your service, another thing that is guaranteed to give you an edge over the rest and make you stand out from the crowd is adding what the market is already missing.
HR & Employment Forms, Contracts & Letters
Collection of 205 ready-made HR & employment contracts, letters & forms for record-keeping and managing your employees
2. Create a Business Plan
Benjamin Franklin once said: “If you fail to plan, you are planning to fail”.
Picture a ship, a map, and a compass. A map is a graphical representation of an area, while the compass helps the ship navigate the area. A business plan does all that and more.
It is important that you know exactly what you are doing. And a business plan can help you with that. It forces you to think hard about things like your mission, your product or service, the value you’re adding to your target market, and your future projection.
Meanwhile, if you hope to work with investors someday, a detailed and thorough business plan will go a long way in convincing them to come on board. People want to know where they’re putting their money, and that means working with someone who knows what they want and what they’re doing.
It also helps you connect the dots. For example, if something goes wrong, the plan you’ve laid out will serve as a good drawing board to go back to and evaluate your next move.
These are the five key parts of a sound business plan:
- Executive Summary: This provides all the essential information about the business, from its owners and the products and services that it offers.
- Company Overview: This should highlight your mission statement.
- Products and Services: This section should provide a comprehensive look at the intended products and services, and how they meet the current market’s demand.
- Market Analysis and Market Strategy: This is where you should highlight your target demography and your competition.
- Financial Overview: This is a speculation of your projected sales or assumptions.
3. Keep Costs Low
Twenty-nine percent of business startups fail due to finance-related challenges. Their failure isn’t necessarily due to their underfunding. On the contrary, most of them had too much money that they needlessly squandered on things they did not need.
As a first-time entrepreneur, you might be tempted to invest in the same things that well-established businesses have like a top-floor office, fancy furniture, and expensive gadgets. You might even decide to start hiring people that you don’t quite need yet – simply put: you don’t employ unless you can’t do without staff.
As you plan your business, make frugality your watchword. Keep your budget low and make sure every dime counts for something.
4. Create a Budget Spreadsheet
The chances of you spending more than what you earn in the early stages of your business are incredibly high. However, spending a lot is not as much of a problem as not knowing why you’re spending so much money and on what.
Having a budget ensures that you prioritize how you spend. Remember: it’s crucial that you’re frugal, especially in the early stages of your startup.
The first step to frugality starts with budgeting and tracking your spending. Having a budget also helps you monitor the business’s financial health as well as plan for the future. All this can be done with a budget template – and don’t forget to consider using various other business templates to get things off the ground.
Start Up Costs Budget Worksheet
This document is also known as a pre-operational expenses worksheet. It is used to record the start up expenses of a company including the cost of Licenses and Permits, Rent and Salaries.
5. Hire the Right Team
Do this right and you’re guaranteed to succeed.
Legend has it that Steve Jobs knew how to inspire his team to do what they never thought they could do. He also hired John Sculley who later fired him. What happened? They both saw things differently.
Twenty-three percent of startups’ failure has been linked to bad hiring. Hiring people who share the same vision as you is extremely important because, aside from the pay, that’s all you really have to offer as a startup.
Another thing you must look into when hiring is the flexibility of your employees. This is important because you simply can’t afford to hire someone in every division of your business, especially so early on. You need to find someone who can do a little bit of everything. Hire a programmer who knows a little about graphics, for instance. The idea is to have a team where they complement each other’s weaknesses. This, meanwhile, also gives employees a sense of belonging.
6. Make Sure Everything Is in Order
Some 8% of the challenges most startups face are legal issues. This occurs when you don’t know the laws that bind your business and your responsibilities as a business owner. Businesses operate under different laws and regulations, depending on the nature of their affairs and their location. For instance, the law that governs a home-based business is slightly different from a business with its own premises. Legal matters can be incredibly complicated, so the ideal thing to do is to contact your local government for the necessary permits and paperwork, as well as information for company formation and all legal aspects of starting a business in your chosen country.
7. Build Your Network
It is one thing not knowing how to connect with people and quite another deliberately ignoring the power of networking, and you’ll be the one missing out if you do.
Never fail to use your connections as the gap between your first and thousandth sale often depends on just who you know. It is, therefore, important that you actively seek new connections and maintain your existing ones. Attend network events in your industry and meet like-minded individuals – you just never know who knows who. One connection you make might lead you to scoring a million-dollar deal with someone in their network. You should also aim to network with people who have done what you are doing now – they may impart their wisdom on you, and you can learn from their mistakes and successes.
Are you a first-time entrepreneur who recently started your own business? Do you have any advice you’d like to share with us? Join the conversation below!
Documents for Starting and Running A Business
Package of 90 samples of business letters for effective correspondence, covering a wide range of business situations.