Starting a business gives you the opportunity to turn your passion into a full-time career. Maybe you have a great idea for a wonderful new product, or you have an innovative way to offer a service. Even though you are excited about your new business, you also likely feel a little overwhelmed with everything you must do. Here are six steps to help you get your business off on the right foot.
Research your market
One of the most important steps you should take when starting a business is researching the environment. Business News Daily suggests you first seek out your competitors. You want to know what other companies like yours are doing, and what you can do differently or better than what they are doing. If you cannot come up with a key differentiator, you may want to rethink your business.
You will want to make sure there is enough of a market for your product. If you are selling designer footwear and there are already twenty designer footwear stores in your city, there may not be enough customers to buy your product.
Identify your customer
After you have determined there is a market for your product, identify your target demographic. Think about who will buy your product. You can pull data about the population of your city online. This will help you determine how many of your customers are in your area and may give you crucial insights about their behavior.
You might find it helpful to create customer personas. Customer personas describe a customer within your target demographic. You include his or her gender, age, occupation, lifestyle, interests and behaviors. A persona can help you understand how a customer may respond to your business and what motivates and influences their behavior.
Set up the legal structure
You must decide whether you want to run the business as a sole proprietorship, an LLC, a partnership, a corporation or some other type of business entity. Each has benefits and drawbacks, and the kind of business and your goals should influence this decision. You must also name your company. You will likely need to register your name and business with the Secretary of State. Depending on the type of business, you may need to file for licenses and permits. You will also likely need a tax ID number or an employee ID number.
Write a business plan
Though you do not necessarily have to write a business plan, it is helpful for several reasons. It helps you really hone your business concept and thoroughly scan the environment. A business plan includes an executive summary where you describe your business, state what problem your company solves and identify why you are entering the market. You also include information about your target market and the future of your industry.
A plan includes a competitive analysis where you name the strengths and weaknesses of your competitors. You also include information about the development of your product and how your will business will operate. In addition to clarifying these things for yourself, a business plan is crucial if you hope to find financial backers or apply for a loan.
Many small business owners ask their friends and family to help fund their startup. You may also decide to pull money out of your savings account, retirements funds or selling off other assets. Another popular option is crowdfunding, which can be particularly helpful because it helps you identify a customer base. You can also apply for a small business loan, or you could seek venture capital support.
Starting a business can be a little scary. However, if you do your research, identify your customer, create a legal structure, write a business plan and find financing, you are well on way toward creating a successful business venture.