How to Start a Business
The key to successfully getting a business off the ground lies in the careful planning of your soon-to-be-formed new enterprise. Running your own business can be incredibly rewarding, and not just from a financial point of view. The knowledge that you are the boss, together with the feeling of independence and confidence boost that comes with it is just as valuable as any financial gain.
Just be prepared for a lot of hard work – the reason so many business start-ups fail is because people underestimate the level of commitment involved. Read carefully to learn what you are getting yourself into and give yourself the best shot at succeeding in your endeavors.
Assess your skills
In order to succeed it’s important that you attempt something that you are actually good at. For example, if you lack creativity, then you don’t need anyone to tell you that you are not going to make your fortune through your art work.
Of course, everyone is good at something, or knowledgeable about something, and this is the key to success. Identify what it is you are good at, what your skills are, write them down on a list, and then try to utilize these strengths for your new business. Your skills are the key to succeeding in your new business venture, and these have to be used to the fullest.
Now take your list and try to come up with business ideas that fit the skills you have. Think, “With these talents and skills, what is the best kind of business I can apply them to?”
Let’s just suppose that your strengths include being well organized and good in the kitchen. Some of the ideas you come up with for a business would include a cake decorating or catering business from home, or else a restaurant or café if you are thinking a little larger.
Do the math
The next step, once you have settled on a business idea, is to sit down and work out how viable your business idea is. You’ll need to consider two things, namely (a) is there sufficient demand for the product or service you are offering, and (b) is the venture is going to be profitable enough to be worth your while?
Consider how much people are going to be willing to pay for the product or service you are going to sell. Find out what the realistic price you can charge for your services is, and then consider if this is going to generate sufficient income for you. For example, if you are a creative person and good with your hands, you may decide to start a business selling handmade garments. However, you need to consider the time involved in making these garments. If you can only make ten per month, will this generate enough profit to make the venture worthwhile?
Create a business plan
The primary reason for coming up with a business plan is so that you can evaluate every aspect of your business and see if it will actually work or not. You’ll need a well-written business plan if you are planning to seek finance to start your business, and even if you’re not, writing the plan will go a long way towards helping you develop workable strategies to ensure your business succeeds. You can also use the business plan to generate realistic financial projections, which will allow you to plan for future expansion.
Another key element of any business plan is marketing. This is the time to think about exactly what you will do to market your services and ensure a steady supply of clients/customers. It will also allow you to consider the impact of advertising costs, and therefore illustrate how much start-up capital you are going to need.
In most cases, there are three options available to them for financing. The bank or some other financial institution is the primary option for most people, while a second option would be to approach a private investor. Alternatively, you may be lucky enough to have friends or family with sufficient money to spare, who may be willing to get involved with your new venture.
Don’t forget, there are considerations for all three options. Private investors, family and friends may ask for a percentage of the business, while bank loans will burden your new start-up with repayment costs.
So you have the money, the plan and of course, you are bursting with enthusiasm. But you’re not quite ready to get started. One vital consideration before you go any further is the legal structure of your business. You can choose from a sole proprietorship, a partnership or a corporation. Beware that any financing decision you take could have an impact on your company’s legal structure. You will need to do your research and learn about the implications of taxation and other aspects of each structure. Take your time with this, and if you are unsure, consult with a legal advisor before going ahead.
Once you have settled on the structure, you can file your new business entity with the state and obtain the federal ID number you need to operate legally.
Getting the show on the road
All that’s left now is to work out where you’re going to base yourself. Depending on the nature of your business, a home office may be more than sufficient. Alternatively, you may need a larger office if you are planning on hiring employees, or even a commercial space if your business is involved in manufacturing or the sale of products to be consumed on site.
Finally, don’t forget about your taxes. Organize your bookkeeping needs, or if you can’t do this by yourself, speak to an accountant and get them to help you.
Now you are truly ready to make a success of your business, it’s time to open those doors and move on to the worries of day-today running of your business affairs.