Starting your own business is a challenging but rewarding way to achieve work satisfaction and financial independence.
The steps are easy, but execution isn’t. They consist of having an idea, making a business plan, making a marketing plan, and getting financing. Once you’ve launched your business, you will need to create infrastructure, build a customer base, and get a payment processing system.
Your Business Idea
Your business idea has to be a blend of something that you’re passionate about and what people are willing to spend money on.
The good news is that it’s possible to monetize almost any idea. The bad news is that it takes considerable research and soul searching to come up with a realistic idea.
While an idea doesn’t have to be completely unique, it should be novel enough to differentiate you from the competition. If you’re stumped, you can always buy an existing business, but you don’t get to make all the rules. Your dream business can be anything from building the next Starbucks empire starting with one local coffee shop to building a SaaS (“software as a service”) platform for pharmaceutical project management software.
Your Business Plan
Once you have an idea, you have to figure out how much it will cost to launch and run your business. A good business plan will help you finance your business.
Investors or lenders want to know if your plan is realistic enough to make a profit. To give them the numerical information they need, you will have to research other businesses like the one you hope to build to get reasonable estimates.
Financiers will have questions like:
- What will be your basic cost of operations?
- How much money will you need to produce the product or deliver the service?
- Who do you need to hire and how much will you pay your employees?
- How much will it cost to rent your workplace?
When setting up your business plan, use business planning software. It will guide you on what to think about when developing a business plan.
Remember, many of the services you need to run your business can be outsourced. For instance, you don’t need to build a human resources department to handle labor laws, taxes, and all the other complexities of fair compensation. ADP business payment solutions can take care of such complex tasks for you.
Your Marketing Plan
Your marketing plan is only feasible if you can break into the marketplace. If the competition is fierce, you may not get enough market share to be profitable.
Recognized companies may have already set pricing standards, established product quality, and cornered the market. For instance, if you want to start a coffee shop, you will find it hard to beat Starbucks, who have struck the best deals with coffee farmers, built a coffee shop in almost every major city, and found many ways to delight coffee lovers. Only other franchises have a chance to take some of their business.
Alternatively, if you decide to create a web-design business, there is plenty of room for great designers. You are only competing against cookie-cutter website builders and independent web-design companies. Demand far exceeds supply.
Once you’ve found a good market to enter, figure out how to promote your business. If, say, you decide to create a web-design business, it will probably not be worth buying newspapers or radio advertising. Instead, Internet marketing techniques like a branded website, a blog, a social media presence, and buying PPC or Facebook ads will work better.
Financing Your Business
Financing involves sharing your business and marketing plans with lenders or investors.
Talk to your bank, local lenders, venture capitalists, and angel investors. Incidentally, venture capitalists are companies while angel investors are people with high net worth interested in building businesses.
Also, try crowdfunding, a mainstream option for funding your business.
If all else fails, talk to friends and relatives.
One thing you should not do is use your credit cards to fund your business. Although many people do it, and you hear successful people talk about how they started their successful business using this method, you don’t hear about all the people who ruined their credit score because they could not repay the money borrowed on their credit cards fast enough.
Once you get the money you need, you have to be consistent in giving your lenders or investors proper reports about your progress. You are expected to share your operating and accounting information. They are also interested in hearing about any new strategic and tactical ideas.
Starting Your Business
When you start your business, you will need to create an infrastructure, build a customer base, and make sure you have a good way of invoicing and accepting payments.
Creating your infrastructure may involve renting an office, buying equipment, and creating a records system using file cabinets and digital records applications.
Developing your customer base may involve online and offline marketing, using public relations, advertising, offering free samples, and participating in social media marketing and social networking. In addition, offering great customer service will improve your rate of return customers and increase referrals.
Making sure you’re getting paid may involve getting a payment processor to accept credit cards. You can try a paid processing service or a free processing company like PayPal and use a credit card machine. You can even try the Square, a device that you can plug into your mobile device to swipe customer cards.
A Rewarding Venture
Working for someone and just following orders is much easier than starting your own business, but nothing is more rewarding than making a living and building a life on your own terms. If you’re looking for an exit, you could even broker a management buyout for your business.
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