A business is basically selling of goods or services to the consumers making a profit from the difference between cost price and selling price. This simple definition is not the reality of business and as we go ahead we will realise how complex it is to start a business. Before we venture to Big Business Corporation we must discuss about small businesses that comprise 99.7% of the total businesses in United States.
There are 28 million small businesses in the USA that give employment to majority of US population. With a good idea and plan you can start your business but one should remember that the chance of failure is probable. Nearly 2/3rd of the businesses that take a start fails within two years and half of the total businesses fail within five years.
There is much to start a business rather than having capital investment. This articles will serve as a guide to all those who are interested in starting a business and that too with a guaranteed success.
Essential Steps to Start a Business are as follows:-
Making Up your Mind
All the successful businesses you see around have started from humble beginnings. Before you start it is important to make up your mind regarding what you want to do and what will be the result. Most people are passionate about start a business but they somehow fail to get a thorough plan on which their business will work.
Making up your mind means that you are ready for the challenges that come in your way as you move ahead with your business startup and you will accept whatever the outcome maybe whether good or bad. Only if you are prepared you should move ahead.
In-Depth Market Research
In-depth market research in simple terms means research about your business and to know about each and every detail that is connected with your business. In business terms it is called feasibility analysis report where an analysis is carried out on the supposed topic and various parameters are used to come to conclusion regarding the same topic.
A feasibility analysis report will carry information regarding a particular business, what kind of business is preferable in a particular market, who are your competitors, capital investment required, return on investment, growth period, pros and cons, some advice required to go smooth in your business and many more.
Prepare a Business Plan
Based on the outcome of feasibility analysis report you prepare a business plan. The research report will give you a basic idea regarding your business. It will give you some hard facts from which you can make further plans.
A business is a blueprint that carries in-depth details regarding your business. It is a memo that tells how you will start your business and what would be the end result if everything goes as planned. Business plans are of utmost importance as they are necessary on various points like getting approval for your business, business visa, bank loan, credit, hiring employees, collaborating with partners, etc.
A comprehensive business also helps you in guiding and building your business. Hire a professional who can help you in preparing your business plan.
Also read: Essential steps in writing a business plan
No matter how good are your plans and no how much guarantee they give for your business success, without a financial plan all will go in vain. Based on your feasibility analysis report you should prepare a financial plan which basically would contains details of how much capital investment is required to start your business, how much money flow is required to get it going and in how much time you will start to get return on investment. In how much time will you be able to recover all your investment and by when will you be able to reach a particular target?
Such questions set up your financial plans. The biggest problem that arises is getting a source of funding since you may not afford all the money that is required. Your financial plan should also have methods how you will arrange capital for your investment. This can include bank loan, credit from other sources, investment from partners, etc.
Deciding Business Location
The location of your business will play a key role in deciding the success of your business. If your business is a retail outlet then it should be at the centre of attraction in dense market area and if it is wholesale business then you can afford to have your location even on some remote area. The feasibility analysis report will give you a brief understanding regarding the location of your business carrying in mind various factors. The location depends on the type of business you are pursuing along with financial estimates and market success.
Deciding Business Structure
Whether one should go for LLP or one should go for partnership firm? Such questions remain always in mind while choosing your business structure. Your choice should strictly be based on the merits of such business structure. This choice mostly depends upon the type of business you are pursuing along with many other factors like the size of your business, total investment made, number of employees, investment module and many more.
The structure of your business has much say in the success and failure of your business therefore be smart in choosing the correct one. You must go back to your business plan and also to mentors and advisors while choosing the business structure.
Registration of Business
Registering your business requires you to furnish all documents relating to your business along with business plan and financial statement with the authority. Rules, documents and authorities change from countries to countries. On a basic note you will require your photograph, bank account, financial statement, investment amount, business plan, letter of recommendation, licenses, permissions from relevant authorities, etc.
Consult your business advisor regarding registering your business. It is not that simple and will require help from professionals who are used to it. It will make your work easy and hassle free.
Getting Required License to Operate
Suppose you are starting a factory that manufactures leather products therefore you will be required to take permissions from environment ministry regarding pollution issues. Similarly for each type of business there are various licenses and permissions required to go ahead.
There are some basic licenses that is common for all. This includes business certificate, approval of business location, approval to carry out certain businesses, clearance from Municipal Corporation, etc. Getting permissions and license isn’t that easy and its hardship depends from place to place.
Some approvals can be granted by applying online while some have complex process. Take help from your advisor or agent as they are well versed with this.
Setting of Office Space
As mentioned earlier, your office location will have lot of say in the success of your business. Chose a location wisely which will serve as advantage to your business.
Suppose you are setting up a software solutions business then your location should be at a place that has better connectivity, proper infrastructure, ease in commuting to the office location, proper utilities, close to other software business solutions, etc. Your office space will also depend upon the size of your business.
The best choice would be to take the space on lease in initial days as it will require lesser capital.
Hiring of Employees
Hiring employees should always depend on strictest requirements. You should be specific while hiring employees. Based on the amount of work you are going to do, the size of your business, the capital investment and requirement, you should hire employees.
Draw an outlines of what kind of employees you need to hire, what will be their role and how can they be efficiently used. With the help of your mentors or those who are already in your field of business you can set up a screening committee to hire employees. It would be advisable to hire people who are multitasking.
If you don’t want to hire employees but want to go for independent contracts they you need to draft an independent contract agreement.
Accounts and Bookkeeping
For the progress of your business and smooth running it is necessary that you should keep a clean record of your accounts. Hire an accountant who is well trained in it and managing accounts. Accounts will help you on various fronts and especially during accounting, taxation and work assessment. Many authorities’ raid businesses and a clean account will serve the purpose right for you. A well-kept accounts is a sign of healthy business.
For any business to progress it is quite essential that it reaches to the potential customer and for this you need to draw a strategy to reach them. This is known as marketing where you advertise about your business and why one must hire you or buy your product.
Marketing is an essential ingredient in spicing up your business. The use of marketing also depends on the type of business you are in. Like if you have a small clothing shop in dense market then you may not require marketing but if you are doing business selling some new product or service then you may require marketing.
There are two types of marketing very common these days. The one is the traditional method of marketing and the other is digital marketing that has emerged in the last few years.
Since the whole concept of marketing has changed in last few years due to rise in digitalisation it is obvious for you to also invest in digital marketing. Digital platforms like social media, Google search results, ads on websites and many other platforms are potential places of advertisement.
Get into a contract with digital marketing firm to advertise. They use sophisticated techniques to target audience who are potential customers. Use such methods to boost your presence in the market.
Traditional Method of Marketing
Traditional method of marketing though may look outdated but also has firm presence. Ads based on posters, hoardings, pamphlets, on television, magazines and newspapers is known as traditional marketing method. This is also called offline marketing. It has been pursued since years and is still very common. Use this method of marketing in order to boost your business and make your presence felt in the market where you are competing.
Prepare Business Proposal
A business proposal is slightly different from a business plan as the former aims at specifically targeting clients and investors while the later serves for broader purpose. You may deploy similar method of drafting as used in preparing a business plan but with few changes. Here your target audience will be clients and investors thus you need to be more expressive and specific and write what interests them.
You should also be elaborative in your drafting. Take help from professionals in preparing your proposal. A business proposal is everything of your proposed business and lot depends on it so make it with precision.
Winning your First Client
It is always a big day for any one in business to win their first client. A lot more is required that what is mentioned here to win your client. From detailed analysis to your business proposal what is common in all of them is your effort and dedication to be the best in business.
A positive outlook followed by cheerful attitude will make you much more successful. Be expressive and persuasive while dealing with your client. Convince him why you are the best among all and why he is much more to gain with you in comparison to the rest. With the right attitude and dedicated work you will surely be a success.
There are many things that you won’t find written in any such manual on starting a business. It is grit, commitment, passion, correct and positive approach, dedication and positive attitude that will make you a success. You can only learn them by experience and with right approach towards your business.
Make sure small and initial failures don’t discourage you. Criticism don’t affect your moral. Be generous enough to learn from mistakes and be extremely pragmatic. That’s the key to triumph in any business