In today’s economy, starting a business is a fantastic idea. It’s never been easier to set up shop, and start making money for yourself. With a unique idea and an internet connection, you can reach out to the masses. Consider some of the most successful companies on the planet right now. The likes of Google, Twitter, and Facebook all had humble beginnings. Google started out in a garage. Meanwhile, Facebook was conceived in Mark Zuckerberg’s dorm room. You can do the same with limited resources thanks to the fantastic power of the online world.
Of course, it’s not quite so simple, and there’s a lot of competition out there. As we have covered here on the blog, more than 90% of first-time businesses fail. However, I firmly believe that you can carve out your own business with the right attitude. Hard-work and innovation goes a long way in this industry, and building a successful company is possible. To do so, you need the basics in place early. So today, I’m looking at the A-Zs of starting a business. Where do we begin?
A great idea
First and foremost, you need a fantastic idea that will resonate with the market. Anyone can start a business, but can you start one that truly works? To do that, you need a unique idea, and a great concept. Perhaps it’s a core product at the heart of your company. Or maybe it’s a unique service that no-one offers. Take Snapchat for example. There were hundreds of photo and messaging apps already out there. But their one unique idea (self-destructing images) made them stand out. They’re now worth nearly $10 billion. What makes your product or service difference? What’s the great idea?
A lot of entrepreneurs like to jump straight into the main part of running a business. The truth is, you need to slow down a little, and conduct some market research. This market research is essential to understanding your audience and your competitors. Start by looking for similar products and services. What else is already out there in your niche? If you’re building an app company, what other apps are out there like yours? If you’re a consultant, what are the other consultants offering? Most important of all, who is your target audience, and what drives them?
As a startup company, you’re going nowhere without a strong, reliable business plan. You’ll need this plan to secure funding or loans from the bank. You’ll need it to show potential investors if you’re seeking venture capital. A good business plan starts by outlining your mission statement and core values. Why does your company exist? From there, go into more detail about how the company will ultimately make money. Lastly, think about an exit plan. Do you expect to sell the company in 10 years, or will you expand and continue growing? Setting out a road map for your business is crucial.
Startup costs and revenue plan
We talked earlier about the 90+% failure rate of new businesses. Well, the biggest reason for this failure rate is mismanagement of finances. Whether we like to admit it or not, business always comes down to money. If you can’t keep the business afloat, your dream is dead in the water. It all starts with a strict plan for startup funding. How much do you need to get off the ground, and keep the business ticking for a year? Ideally, that’s how much you need to get started. Every business is different of course, so do your own sums here. As for the revenue plan, you need a clear timeline for when the company will start to turn a profit, and how you will get to this point.
The admin checklist
So far, we’ve covered the creative and financial elements of getting started. However, don’t forget about the administrative extras. In this case, we’re talking about all the foundations that take place behind the scenes. It all starts with registering your business. A service like Your Company Formations Ltd. can help you register with the tax man. This makes your business official. From here, you’ll also need to consult a lawyer to draw up contracts and apply for intellectual property protections.
With all these aspects in place, you’re ready to introduce your company to the world. That’s where great marketing comes in. Don’t pour your money into marketing until you’re sure your core product is strong.
Starting a company is tough, but the rewards are well worth it. There’s no reason you can’t be the next big entrepreneurial success story. Good luck!