February 23, 2021
February 23, 2021
Conducting in-depth market research and choosing the best organizational structure are just some of the steps in the business preparation process.
Starting a business is exciting but can pose unexpected challenges if you don’t prepare for what may come.
This article will provide a step-by-step startup guide for aspiring entrepreneurs on how to start the business of their dreams – from developing a business idea to keeping your customers satisfied.
When formulating a business idea, start by determining your strengths, abilities, and interests.
Pick something you’re passionate about. Passion drives you to success because it allows you to commit fully to your goals despite the obstacles you might face when starting a business.
For example, if you enjoy writing and teaching, you can turn your skills into a successful business by creating educational content and online courses.
Tools like Google Trends help you evaluate and validate your online business ideas. It enables you to see if the trend of your market is growing or declining. All you need is to enter relevant business keywords into it, and the results will show the interest of search engine users over time.
Looking at the trends can help you conclude if the potential products or services can be a sustainable business idea. Continuously refine and redefine this idea until you find the right one.
Once you have specific products or services in mind, choose the industry you intend to serve – research existing companies, their products, and the target market they cover.
You can start by attending exhibitions and trade fairs to check your competitors’ booths and promotional activities. Walk the floor to see the product displays, engagement techniques, and sales pitches.
Find out about their current processes and figure out what they lack. Think about how you could fill the gap by starting your own business and delivering a more valuable product or service.
You can also learn about your competitors by performing a SWOT analysis. It will help you formulate business strategies to profit from their experiences.
Understand what they did right, what they did wrong, and avoid making the same mistakes with your new business.
SWOTanalysis.com offers a creative and professional template for businesses and career planning. Consider using this free tool to brainstorm and track your company’s progress as it grows as well.
Market research is essential because it provides insights into your competition’s practices, preferences of your potential customers, market trends, consumer behavior, and demographics.
Start by understanding who your customers are. Create buyer personas that reflect the people who will be buying your product or services.
Well-designed buyer personas can reveal insights into consumer buying behaviors. You can use this information to help you visualize the people that will buy your product or service, plan your communication campaigns, and build marketing strategies.
It can also give you ideas for improving existing products and coming up with new solutions to address specific marketplace challenges.
Once you have a clear picture of your target audience, it’s time to learn their actual characteristics, challenges, and buying habits.
There are different ways to obtain market data before starting a business. One of which is to determine your audience’s opinions about your products by conducting online surveys or focus group discussions.
For example, Google Surveys collects and analyzes data from users. Once you have created the survey and provided information about your target audience, Google Surveys will find the people who match your criteria, get them to fill out the survey, and present you the results within a few days.
Google Analytics is another useful tool that helps you learn more about your customers, including age, gender, and interests. You can install this free tool as a plugin on your website and view such information about the people who visit your site.
Another alternative option is to hire a market research firm that will provide expert research data on your target market. However, such services can cost anywhere from $4,000 to $50,000 or more.
To summarize your data, the findings should include the background of your study, the list of the participants, and the results of your research. Having all of the information laid out will provide context to the findings and ensure a logical flow of ideas.
Organize the participants into separate groups to better understand who your target audience is and what they look for in a product or service.
Make sure to analyze the information you gathered and evaluate how you can use your findings to build a brand and business plan.
A proof of concept (POC) is a validation that your business idea is proven effective and commercially feasible.
For example, you want to produce a self-published eBook. The POC goal can be to have 10 pre-orders for your writing project before mass production.
If you could get at least 10 people to pay for an unpublished book, it would give you the confidence to continue writing and producing.
Therefore, a POC is like a confirmation signal to continue with developing the product. You can proceed to the minimum viable product (MVP) phase after passing this stage.
When learning how to start your own business, there are different types of business plans you should look at.
All of them have different objectives, but making a traditional business plan will be more than enough for your startup business.
A traditional business plan deals with various topics necessary to finance a company, calculate future projections, and connect with customers.
It typically includes the following sections.
An executive summary describes your business, its vision, problems it seeks to solve, and financial predictions.
Start with a mission statement to explain the purpose of your business. You can further discuss the company’s brief history, management team, location, and the number of employees to build credibility.
Similarly, key achievements and milestones are necessary to track the company’s progress and measure its success.
Choose to showcase the products and talk about their features and benefits.
If you want to attract investors to your new venture, including the financial history and predictions is also recommended.
Lastly, take the opportunity to discuss your business goals. Explain within your business plan how you intend to grow your business in the upcoming years.
Disclose your business name and introduce the business owners in the company description.
If you seek investors, explain why your products are valuable to your well-defined target market.
Next, briefly discuss what you aim to accomplish over a specific time – whether to maintain profit or increase market share.
To demonstrate your desire to succeed, reveal your business plan alongside its scheduled starting date and the deadline for the following 12 months or so.
Also, state the legal structure of your business.
Lastly, mention the planned necessary steps to achieve success. Include a vision statement that presents the company’s future objectives.
Thoroughly explain your products and services. Focus on how they manage to meet your customers’ needs.
State the product life cycle under this section. It serves as a guide when formulating product strategy development as you reach success in the industry.
Besides, if your product is already undergoing market research or competitive analysis, openly disclose your business plan’s details and findings.
Conduct a market analysis to gain a deeper understanding of your competitors’ performance. Learn more about their strengths and analyze the trends for your small business to keep up.
Start by deciding on the purpose of your study. It could be for assessing the risks, reducing potential issues, or creating opportunities.
Determining the current state of your industry and its direction should be your next step.
Provide metrics such as size, trends, and projected growth, backing up your claims with relevant information.
Once you’re aware of the industry’s outlook, analyze the market, and visualize your potential customers.
Take note of the information such as their age, income, gender, location, and occupation.
It’s now time to list down your competitors and compare their performances.
Evaluate your competitors carefully and perform a SWOT analysis. This process can help you narrow down your biggest strengths and current marketing position.
You should now be ready to gather factual, relevant, and valuable data – the best decisions happen due to well-researched information.
SimilarWeb is a free competitor research tool you can use to access information about your competitor’s traffic and marketing strategy.
For an easily understandable business plan format, include the following points in your market analysis:
Describe your business’s legal structure – the three basic types of legal entities are sole proprietorship, partnership, and corporation.
The most popular business type is a sole proprietorship, which gives you full control of your company. It’s simple and easy to set up at a minimal cost. However, under this structure, you’ll personally be liable for all financial obligations of the business.
If your business has several owners, you can structure it as a partnership. Despite its simplicity and flexibility, the downside is that partners are personally responsible for the partnership’s liabilities.
Lastly, a corporation is a legal entity built by individuals or stockholders. Owners are not responsible for the debts or liabilities of the corporation, protecting their personal assets.
The primary disadvantage is the large amount of money needed to form a corporation, including extensive record-keeping.
Once you’ve finalized your business structure, provide an organizational chart that serves as a graphic representation of its management and employees.
Focus on your strategies as you break into the market and increase demand.
To sum it up, below are the key objectives to include in your marketing and sales section.
A financial plan provides target investors with an overview of your company’s financial projections for growth.
If you own a startup business, financial projections can help you budget, measure profitability, and set financial goals.
On the other hand, financial projections can keep established businesses on track by consistently helping them achieve their goals.
Show your business potential by highlighting its performance. Include your company’s income statement, cash flow projection, and balance sheet.
It’s a good idea to add graphs and charts in the financial plan sections of business plan templates to summarize growth.
An essential element of your startup success is to obtain sufficient funding when launching and growing the business.
Most people finance their new business venture with their own capital or borrow money from family or friends.
However, other options are available, including angel financing, crowdfunding, small business credit cards, venture capital, and small business loans.
Angel investment is the most sensible choice for a small business. Successful entrepreneurs and professionals often offer to fund startups with the expectation of a high rate of return.
Furthermore, these investors provide essential benefits like advice and counsel, contact with potential employees and customers, and insights into competitors’ strategies.
Here are some essential elements you should consider when starting your own business. Let’s talk about the steps many forget to consider when trying to get their business started on the right path.
Companies have greater chances of success if they hire the right people. To create a balanced team, analyze your strengths and weaknesses first. Find employees that can complement the skills you bring to the table.
When starting the hiring process, you should strategize how to announce the position, develop the criteria for employee selection, provide the interview process steps, and select the right interviewers.
The hiring search committee should create a job description and develop a competitive compensation and benefits package.
Advertise the job opening on such platforms as LinkedIn to find people in the industry with the right skills. You can either find them through paid job postings or access them through your company page, personal profile, or LinkedIn groups for free.
Searching for the right suppliers for your business is another vital step for success.
First, you should determine the type of supplier that you need.
You can choose a manufacturer that can produce your products. However, if you intend to purchase existing brands and products in large quantities at low prices, a wholesaler is a better option.
Dropshipping is another excellent choice wherein you can pass sales orders to a supplier who can directly ship them to customers. This business model is very cost-effective as it requires minimal capital to set up.
For example, Alibaba is a popular overseas business directory that is often used for dropshipping. It offers a wide variety of product search options from verified suppliers.
List down all potential suppliers and compare their services, offerings, and features. Evaluate their prices, reliability, stability, location, and background to find the best fit.
Once you have a supplier in mind, you can prepare a contract for discussion.
A written document is vital for recording all the required terms and conditions. Ensure you read the contract carefully before finalizing and signing the agreement.
Lastly, it’s crucial to maintain a good relationship with your supplier for your business to operate smoothly. Schedule a time to communicate with your suppliers, monitor their performance, and provide feedback and concern when needed.
Consider your company’s requirements and needs when choosing a business location. Look into the laws, familiarize yourself with competitors’ sites, and research the available options.
Have a look at the state and local tax implications of your prospective location. Your business type and location can dictate if it’s more advisable to seek a place outside a particular zone or municipality to get a tax benefit.
As you prepare your business for growth, evaluate if it makes more sense to buy an office space or lease a commercial space. Your business type will dictate the kind of premise that you need.
For example, a retail store is recommended if you will be selling products. On the other hand, you can set up a shared office space with a meeting room if you offer professional services.
Your business plan seems to be close to perfect after securing capital, coordinating with suppliers, and picking an office space. However, operating a business requires you to obtain several licenses and permits before its launch.
A business structure influences your daily operations, tax obligations, and personal assets. Evaluate some of the examples below and pick one that provides the best legal protection and benefit to your business.
The most common structure for startups and small businesses is the limited liability company (LLC) option. It allows business owners, partners, or shareholders to limit their personal liabilities while enjoying the partnership’s tax and flexibility benefits.
One advantage of it is that owners are not personally liable for the company’s debts or liabilities.
Meanwhile, a corporation is a legal entity that lets you open a bank account, purchase property, sign contracts, and launch a business. Shareholders are the owners, while officers and directors handle the operations.
In comparison, this structure’s best advantage is that owners are not liable for the corporation’s debts.
You need to register your business with the government for it to become a legal entity officially.
If you own a corporation, you need to get the Articles of Incorporation. This includes information like your business name, details of a registered agent, the corporation’s duration, and other similar details.
If you’re a sole proprietor, you should register a business name to represent your company – check out more about having a “doing business as” (DBA) name. Fulfilling this obligation to the government lets you operate a business under your name and be the contact person in case of any problems.
After fulfilling the initial process, you can register your business with the IRS and receive your Employer Identification Number (EIN). An EIN is the Social Security number of your business that’s required when filing taxes.
Having business insurance helps you manage risks and protects losses as you grow your company. All small businesses and large corporations need to apply for it to be fully prepared.
The most common types of business insurance for a new company are workers’ compensation, professional liability, and general liability insurance.
Workers’ compensation deals with work-related injury or illness of employees. It typically includes medical care, disability benefits, and funeral expenses.
On the other hand, a professional liability policy is ideal for businesses that offer professional advice or services. It aims to protect the company’s finances if an employee makes a mistake in providing solutions to customers.
General liability is the most recommended policy for small businesses. This option protects your business from property damage and claims of accidents in the workplace.
After registering your business, it’s time to apply for an EIN.
An EIN will serve as your federal tax ID, which is required when paying taxes, setting up a bank account, employee hiring, and applying for business licenses and permits.
You can use the IRS assistance tool when signing up.
Business licenses and permits will depend on your business type and location. A crucial first step is to know the requirements in the application process.
We recommend that you access SBA’s database to check the licensing requirements before application.
Some businesses can be required to apply for federal, state, or local licenses and permits to operate.
Setting up a business bank account can help you keep track of the cash flow by separating your business finances from personal money.
First, look into the options to open a traditional business bank account. Consider the overall costs, the number of ATMs and branches, access to online banking, and other useful features for your business.
While some banks offer free service costs, make sure that you check their transaction fees. Some banks may waive specific fees if you maintain a minimum balance, limit transactions, and use the bill pay option.
Once you choose the bank you want to go with, it’s time to prepare the required documents. Be sure to present papers that show your company’s legality, along with its business name and type.
To boost your business’s credibility, you need to build a professional website. When well-maintained, it can help you enhance your online presence and build a strong relationship with your customers. A professional website can also serve as the backbone of your business that supports its digital marketing efforts.
The first step to creating a website is to purchase a short and catchy domain name. Check what’s available using a domain checker and choose a domain name representing your brand and your business name.
The next step is to find a web hosting provider. Consider the kind of website you want and the amount of traffic you are planning to get.
Here at Hostinger, we offer affordable hosting plans that can cater to websites of any size and purpose.
Shared web hosting is an excellent choice for smaller websites that don’t expect much traffic. It’s a great place to start for small businesses as shared hosting is cost-effective and provides just enough resources to host a small-to-medium-sized blog or a modest business site.
The price of shared hosting plans ranges from $0.99/month to $3.99/month.
WordPress web hosting is specifically designed for WordPress websites. This kind of hosting provides enough resources to run a larger-scale website in the form of a blog, a business site, or even a smaller eCommerce site.
WordPress web hosting plan prices range from $0.99/month to $11.59/month.
Cloud hosting is ideal for large scale projects. It provides enough resources to run an unlimited amount of websites of any size. It also comes with automated daily backups, an allocated number of resources, and a dedicated IP address. Cloud hosting costs from $9.99/month to $56.99/month.
Lastly, we also offer VPS hosting, which is the most versatile hosting option for scaling websites. VPS hosting comes with a dedicated IP address, full root access, and a large number of set resources.
This kind of hosting is great for more complicated projects that require a lot of computing power and generous control. The price of VPS hosting ranges from $3.95/month to $38.99/month.
Once you choose a hosting plan that’s suitable for your business website, it’s time to look at different website management platforms.
Content management systems (CMS) enable you to build professional websites and manage web content through editing and publishing. You can choose from different CMS options available, such as WordPress, Blogger, and Joomla!.
WooCommerce is a plugin you can use with WordPress for your business website. It’s a free and highly customizable open-source eCommerce platform. Small and medium-sized enterprises can take advantage of its vast array of free and paid third-party plugins and themes for their stores.
There’s also a built-in blogging function that makes it easy for you to post content and strengthen your branding. While it integrates smoothly with WordPress, WooCommerce is a far more technical platform that requires at least some coding knowledge and technical skills.
On the other hand, Zyro is an excellent fit for a fast and affordable set-up. This drag-and-drop site builder is beginner-friendly, flexible, and offers an array of useful features.
With Zyro, you can build your website by customizing the available templates. You can also register your domain name and perform on-site SEO. What’s more, all Zyro’s plans come with free hosting and access to AI brand-building tools, such as the domain name generator and the logo generator.
All in all, Zyro provides you with everything you need to launch your website. It won’t offer as much creative freedom for customization as a CMS platform, but it will make the process fast and straightforward. Zyro’s premium plans range from $1.89/month to $14.99/month.
The success of a business doesn’t come overnight. It takes time and effort for it to increase profits through various actions.
First, you need to be attentive to your customers’ needs. When you’re able to identify and understand your clients, you can use that knowledge and experience to develop valuable products, solutions, and services.
Good customer service should come next as it aims to make clients feel special and keep them satisfied. Be willing to assist and solve their problems right away. Take the extra step to offer your knowledge by answering their questions quickly and efficiently.
Next up – the marketing campaigns. Start integrating search engine optimization (SEO) practices, pay-per-click (PPC), and social media efforts into your marketing strategy to promote your business to a larger target audience.
It’s not enough to only encourage people to buy from you. They have to remain loyal customers to your brand despite your competitors. Only by delivering excellent services and assistance you will acquire customer loyalty.
To keep your loyal customers for life, show appreciation by providing a personalized loyalty program. When it comes to discounts and promotions, you should inform them first. This approach might encourage an emotional connection between your brand and your target audience.
It’s essential to listen to customers’ concerns to keep them satisfied. Make sure to start solving issues from the very start of your business journey.
Listening to your customers forms a healthy relationship. It’s about acknowledging their needs and offering solutions that will help them achieve their goals.
In the same way, gathering customer feedback helps you make decisions that can improve your products or services.
To make sure your business continues to grow stronger, you may need to consider some pivoting. When your company’s progress is slowing down or faces too much competition, it makes the most sense to pivot your products.
Pivoting allows you to compete with other companies that market and sell the same products as your business. You may also pivot when you want to attract a new target market, follow a unique revenue model, or use a different approach to building products.
It’s essential to know how each business element works to predict what will happen when pivoting in business. Bear in mind that everything has to be planned well before its execution and performed only when necessary.
Starting a business can be both exciting and nerve-racking. While there’s no right formula for business success, we answered some of the most frequently asked questions to help you launch your startup business smoothly.
A dropshipping eCommerce startup can be a low-cost, profitable choice for beginners. You don’t have to worry about storage or shipping. However, you need to find your own customers.
Another idea is to use your talents to start a business. For example, if you’re a professional photographer, you can create and sell online courses.
Check out this article for more inspiration.
A significant advantage when you start a small business online is that it doesn’t require a large budget.
Compared to a brick-and-mortar business, you don’t need to consider building space and rent prices, location, and licensing fees. All you need is a product idea and a market to operate.
To save even more money, start with a small business that doesn’t require production costs, such as online courses, ghostwriting, or other similar services and products.
On average, launching a small business costs $3,000, while home-based franchises will cost around $2,000 to $5,000.
The financing needs of starting your own business will vary according to its type and size. Since your expenses continue to increase as your business grows, it’s essential to plan ahead for sudden or unexpected costs.
Now that you know how to start a business of your own, keep in mind that growing it fast shouldn’t be your primary goal.
It requires a significant amount of effort and time to analyze customers’ needs, provide good customer service, and establish loyalty for your brand to prosper.
With all the information we provided, we hope you’re more than prepared to start and grow your very own business.