Are you ready to start your own business? If you’ve got your business concept in mind and are ready to dive in, read this article first.
In a world where we’re inundated with small-business success stories, it may seem like it’s relatively easy to start a business these days. All you need is a great idea and a bit of money, right?
Well, yes and no.
Some parts of starting a business are easier than ever before — but you should still be prepared for a lot of hard work and a bit of legal know-how. Here’s what you should keep in mind as you build your business and prepare for your future as an entrepreneur.
Take it from me: as your business develops, you’ll alternate between feeling excited and confident to wondering why you ever started this project. To be a successful entrepreneur, you need to have an excellent system for managing anxiety and self-doubt. Before you start building your business, do an honest self-evaluation of your strengths and weaknesses. Are you prepared to face many challenges simultaneously? Do you have the resilience to deal with stressful situations and compartmentalise issues? Do you know the basics of how to run a business and make it profitable? Be honest with yourself and be willing to work on self-improvement as you work to build your business.
Know your why
These days, it seems like everyone is starting a business. It can be difficult to set yourself apart. The truth is, if you don’t know why you’re starting a business or what makes you unique, you’ll have a hard time establishing the trust necessary to convince others of your value proposition. Your “why” also feeds into your brand, and your values play a major role in making you stand apart from the crowd. (More on branding in a moment.)
Plan, plan, plan
The number-one cause of failed businesses is a lack of planning. Sadly, an awesome business idea isn’t enough to guarantee your success. Some great ideas are ahead of their time. Other businesses fail because they aren’t properly positioned within their target market, or the costs of doing business simply outweigh the profits.
That’s why extensive market research and business planning are both crucial to the viability of your business. A full breakdown of everything that should go into your business plan is beyond the scope of this article, however, you’ll definitely want to:
- identity your target audience and customer base
- thoroughly research your competitors and understand what makes you unique
- test your idea and assess its appeal (consider surveys and focus groups)
- fully develop your business model and understand how you will receive and document income
- determine your startup costs and conduct a breakeven analysis
- decide now whether you’re building a business to keep or sell
Be open to feedback — and resilient to criticism
Notice I said resilient, not resistant. Everyone has haters, but part of running a successful business is to understand the difference between helpful feedback/constructive criticism and naysaying/unfounded criticism.
You need to know how to take the good with the bad, then turn your feedback into action items to build and grow your business. I’ll be honest, running a business means having a tough skin — and you have to be willing to fight for your business in the face of adversity.
Get your legal ducks in a row
It’s tempting to wait until you’ve “made it” to officially start your business, but it’s always a good idea to ensure that you’re running a legitimate operation and complying with all state and local regulations. Take the time before you dive in to get your business established in legal terms. Here’s a quick checklist to follow:
- Decide what your business structure will be. (LLC, corporation, partnership, and sole proprietorship are the basic options.)
- Pick your business name. (Be sure that it’s not taken by someone else!)
- Register your business with appropriate authorities. This means getting a state tax ID, along with any required registration with your state’s business listings.
- Obtain necessary permits. This can take some time, so start sooner rather than later.
- Get your business license. Check with your local tax collector to learn more about what’s required here.
- Open a business bank account. It’s crucial to keep your personal and business finances separate. Start now with an account dedicated to your business.
- File any necessary trademarks, copyrights or patents. Protect your intellectual property now.
- Obtain business insurance to protect your assets.
Look into financing options
Yes, it takes money to make money. Thankfully, there are plenty of options, especially for female entrepreneurs, to help offset the startup costs or keep you from having to pay excessive funding out-of-pocket. It can often take up to two years for your business to turn a profit, so you’ll want to be sure you have a robust financial plan and lean on external financing whenever necessary. There are many small business loans and grants that are exclusively available to female-owned businesses. These can be invaluable to your new business’s success.
Be prepared for tough times
While you may have to take on a loan or open a business line of credit to get started, you still need a plan to protect yourself. The recent economic crisis has proven that businesses with cash in reserve and financial plans that enable cash flow are much more resilient in the face of economic downturn. Make a plan now for saving and investing for your business. In fact, strategic investments can be an additional income stream to supplement your core revenue.
Call in the experts
This may be ironic, but don’t rely solely on the internet as your primary source of advice. There are countless articles to read about all the nitty-gritty details of starting a business — but nothing replaces the counsel of expert consultants. Remember, every business is unique, and it’s well worth your money to hire an experienced accountant, tax advisor, or lawyer to ensure that your business is above-board and protected. Plus, do you really want to deal with your accounting, taxes, and legal issues by yourself? Take it from me: you don’t. Focus on your area of expertise and find experts in those areas to shine in theirs.
Figure out who you want on your team
If you’re not planning on running a solo enterprise, start thinking now about the type of people you want on board. Even if you’re not ready to hire or bring on a partner, decide now what the future of your business will look like. Who will join the team full-time? Will you need to hire freelancers? How much of the business will your partners own? These are decisions you should think extensively about now so that when a recruiting opportunity strikes, you’re prepared to speak with authority.
Launch your branding and marketing efforts
A lot of new entrepreneurs are confused about the difference between marketing and branding. Put simply, the former is what you say about your business; the latter is what your customers say about you. Ideally, you have some say in your branding, which is why it’s important to decide your key message, marketing strategy, and how you’ll advertise your business well before you start putting it out there.
Inconsistent messaging, a confusing website or social media presence, and poorly done ads can derail a new business’s growth. Create a thorough, detailed plan for marketing your business, and consider bringing in branding and identity design experts to help you align your efforts with your intended audience. It can be hard to see your brand the way that others do, so having a third party that can assess your business and branding objectively is invaluable.
Have a plan to scale up
The other main reason that new businesses fail is that they lack a competent growth strategy. As your business becomes more popular and you start to see more orders or appointments, you need to be prepared to accommodate this increase in demand. Do you need to “niche down” your services? Should you add more members to your team? Does your pricing model need to change? Have a plan now so that you’re not suddenly overwhelmed by success and lacking in time or resources to expand properly.
Starting a business is an exciting opportunity. As with anything, careful planning and strategy save you a tonne of headaches down the line. While you may be eager to get started, you’ll be much more likely to succeed if you do your due diligence. As the saying goes, slow and steady wins the race — so take your time to give your business the best chance of success!