From Idea to Inception
It’s never been as easy to start a business as it is today. With the advent of the internet and globalization, a ‘solopreneur can build a business empire from their kitchen table.
For anyone thinking of branching out to start their own business, here are 12 keys to work through before embarking on the new adventure of entrepreneurship.
Generate a Business Idea
Most people have some kind of business idea they are toying around with. Even if none of them work or you are completely blank, the good news is there are opportunities everywhere and getting a good business idea doesn’t have to be rocket science.
Start with a problem that you have that you wish there was a solution for.
Some of the most successful businesses came from people who had a problem, there was no solution available, and they built a solution for themselves.
Create a Business Plan
A military leader once famously said, “No battle plan survives contact with the enemy.” That’s true for business plans as well. It will never go as planned, but that doesn’t mean you don’t need one.
Business plans are useful to create a road map and framework for how you will proceed. Even though it will rarely be followed exactly as laid out, it provides guidance, milestones and general next steps.
You may also need a business plan to get financing to start the business or to grow when it gets to that point.
Do Market Research
If your primary customer is you, that’s a great start. As they say in the Silicon Valley startup world, “eat your own dog food”. There’s great wisdom in that. But it’s also important to look outward and find out what the market wants and needs.
Start with analyzing your target market. Get detailed demographics on them, like age, gender, income levels, geographic location, etc.
Market research also includes looking into competitors. This can be extremely valuable to know how your company would differentiate itself as well as copy the things that are working for them as well.
Listen to the Market
As part of your market research process, make sure you’re getting real feedback from real people. It’s important to make sure there aren’t any gaps in your thinking as you start taking your product or services out to market.
An executive mentor told me once, “never make a decision behind a desk”. He was basically saying any decisions for improvement, whether it’s in product or services, should be made based on feedback from real customers or prospects.
Examine Yourself
An organization is only as good as it’s leader. A business is only as good as it’s owner. Start with a close examination of you, your skills, strengths, weaknesses, resource, etc.
Know what you’ll be great at and what functions you should focus your time on. Also, figure out who else you need on your team as you start and grow your business.
Growth Mindset
Companies that stop growing, start dying. It’s important to never stop thinking about growth. There’s rarely a moment where sitting on your laurels and being complacent is healthy for a business.
Once a business hits a milestone, whether it’s in sales or impact, it should be looking toward the next goal. Visionless companies eventually die.
Financing the Business
For many businesses, starting and growing based on sales and the owner’s own money, works fine at the beginning.
This is especially true in the case of professional services businesses like consulting.
Most businesses, however, will need some capital at one time or another.
Here are the most common ways businesses fund their startup operations:
- Owner Financing: Using savings, personal credit cards, etc.
- Friends and Family: Getting loans or investments capital from personal network
- Banks and Other Lending Institutions
- Small Business Grants
- Crowdfunding Campaigns
- Angel Investors
- Startup Incubators
Product and Service Development
Once you’ve done some market research and talked to a few folks, you need to develop the product or service you’ll be offering to the market. Services are fairly straightforward.
Start by going to your competitors and basically copy the services they offer.
If it’s a product, it’s a little more tricky. You can distribute and resell products other companies manufacture or you can manufacture a product yourself.
The latter is much more complex and would require more funding.
Find a Location
Depending on what kind of business you are starting, it will require an office or warehouse, or none of the above. If you’re starting a simple consulting practice, you may not even need an office to start.
If you are selling a product, you will need to think through office space, warehouse space and possibly space for vehicles.
Start Selling
No matter what your top skills and strengths are, the business owner should be the Chief Sales Officer in the organization. They should be the best evangelist for whatever that business is providing.
Business owners can easily pawn this function off to other people, but it’s critically important for you to stay involved in the process. It’s your business and the lifeblood of the venture starts with sales.
Build Your Team
You can’t do everything, especially as the business grows. Have a strategy for building a team around you, particularly in areas of weakness.
If you’re not good with finances, a bookkeeper or accountant should be your first hire or first service to outsource. If marketing is not a strength, find an agency to help you.
Paperwork
Now comes the boring but necessary part. You have to set up your company and make it official.
That means you need to get all of the appropriate business licenses from local, state and Federal government agencies. You’ll also need to get set up with the IRS and state tax office.
You’ll also need to register a business name, open a business bank account and register any relevant trademarks, copyrights and patents.
Those are the 12 keys to starting a business upright. How you start is how you’ll finish, so start strong!
