If starting a business is a dream of yours, you’ve probably spent hours on end envisioning how your idea would look in reality. Having a brilliant idea and turning it into a profitable business are two very different things, which is why it’s important to understand the steps you need to follow to get the ball rolling and build the foundations of a successful company.
With an opportunity to turn your passion into a livelihood, it’s easy to get carried away – but these early stages call for careful planning and preparation. Here are four essential things to consider if you’re looking to start your own business.
Brush up on your business skills
During these early phases of setting up your small business, it’s important to assess your industry knowledge, and whether or not you could benefit from some further training. Whether you enrol in a business degree to get a better grasp of complex business concepts, or you sign up for an online course to fine-tune your existing skill set, there are plenty of ways you can acquire the knowledge necessary to succeed in business.
Of course, as any business owner will tell you, it’s impossible to equip yourself with all the necessary skills and understanding needed for a lifetime of success in the industry without getting some hands-on experience.
As educated or skilled as you may be, it’s important to still go into this exciting endeavour with your eyes open to the prospect of unforeseen hurdles and obstacles that you’ll learn how to overcome as you go along. A sound understanding of key concepts is vital, but don’t ever expect to stop learning as a small business owner.
Conduct your market research
You’ve got a viable business idea that you feel solves a problem or meets a specific need – but is there a market for your product or service? Who are your potential customers? Which competitors are already serving them?
Think about what makes your small business unique, and why your prospective customers will want and need to use your product. Conduct market research to validate your idea and get some answers to these important questions before you proceed further.
All of this information will be laid out in your business plan. A solid business plan is indispensable, and establishing it should be one of your main priorities in the early stages of the process. It will outline your business objectives, target market, marketing strategy, financial projections, and more. Having a business plan in place early on will help you to stay focused and on track in the long term, but you should also be prepared to make slight tweaks as you go along and your business evolves.
Before getting too carried away with your brilliant small business idea, you’ll first need to think about the finances involved with setting up a company from scratch. There are lots of associated costs you may never have considered before, including insurance, research and technological expenses.
Beyond that, you’ll need to pay for staff, stock, utilities and a lot more besides. It’ll be worth calculating these costs by creating a list of all your one-off and ongoing expenses and adding a little financial cushion on top to give yourself some breathing room.
Once you know what you need to pay for, it’s time to start thinking about how you’re going to finance your plans. Will you use your savings, take a loan, or seek investors? Fortunately, there are lots of avenues for you to consider, so make sure you do your research to find out which options could be available to you. Ensure you have enough capital to cover your startup costs and keep your business running until it becomes profitable.
Another important step is setting up a business bank account. Having a separate account for your business can give you more financial security, make tax returns easier and allow you to build a business credit score.
Choosing your legal structure
Determining which legal structure your business will follow is an important step in establishing your company, and is a decision that will impact different aspects of your business for years to come. There are several factors to bear in mind that’ll influence your decision. For example, some structures will come with a greater level of personal liability than others, while the tax burden will also vary depending on your choice.
There are several options to choose from, including sole proprietorship, partnership, limited liability companies (LLCs), and corporations. Each has different benefits and drawbacks, making it important to weigh up your options carefully. It’s essential to do your research and consult with legal and tax professionals to make an informed decision.
Start on the right foot
These are just some of the many things you’ll need to do to establish a fully functioning business. One mistake lots of new business owners make is spending too much time on the branding and marketing side of the business too soon, ignoring the admin-heavy tasks. While the strategy behind a business is essential, make sure that you aren’t compromising the success of your business by overlooking the legal, accounting, and other admin aspects of your business.
Starting a small business is a journey filled with ups and downs – it requires patience, resilience, and a lot of hard work. By considering these four factors, you can better prepare yourself for the challenges ahead and increase your chances of success. Remember, there’s no perfect time to start a business – if you believe in your idea and are ready to work hard, take the leap and turn your entrepreneurial dreams into reality.