12 Essential Steps to Start a Business
There are no limits to becoming a great entrepreneur. A university or college degree, financial stability or business experience in general isn’t at all necessary to begin something that could be the next major hit in the world of business. However, you would certainly need a strong plan and the drive to turn it into reality.
Now, you may already have the drive but knowing how to start building a business may come to question.
Worry not! Here is a step-by-step guide to guide you through the journey of turning your big idea into a successful business venture.
1. Evaluate Yourself
Let’s begin with a simple question: Why do you want to start a business? Ask yourself this question to guide you through the type of business you intend to start. If you’re looking into making more money, you should probably consider starting a side hustle. A side hustle is basically freelance work in general that provides you additional income. Often times more than not, side hustles are pretty much things a person is passionate about rather than the typical day job to make ends meet. If you’re seeking more freedom, then maybe it’s time to consider leaving your 9-5 job and move towards greener pastures.
Once you have sorted that out, start asking yourself more questions to help you figure out the type of business you should start and if you have what it takes. Some of the questions you could ask yourself are:-
- What skills do I have?
- What am I passionate about?
- What is my field of expertise?
- Keeping in mind that most businesses may fail, how much am I willing to spend on mine and risk it all?
- What sort of lifestyle do I intend to lead?
- Am I ready to be an entrepreneur?
The truth is never sweet so best be honest with your answers. This is the first step in creating a foundation for everything you do in moving a step forward so it’s better to know the truth now than later.
2. Think of a business idea
Do you already have a splendid business idea in mind? If you do, congratulations! You can proceed with the next step. If you don’t, then its time you begin brainstorming for one. Take time to go out and meet people and ask them questions, do some online research to help you come up with ideas or seek pieces of advice from other entrepreneurs that you may know. Whatever floats your boat!
3. Do market research
Does anyone else in particular share the similar idea? Has the idea been implemented? If not, is there a good reason why?
Begin by researching on your potential competitors or partners within the market. For example, you can carry out interviews via telephone or in person. You can also conduct surveys that cover a range of questions such as: “What factors do you take into account prior to your purchase of this product or service?” and “What areas would you suggest for improvement?”
Among the most common mistakes that people make when carrying out their market research are:-
- Using only secondary research.
- Using only online resources.
- Surveying only the people they know personally.
4. Get feedback
Give people an opportunity to interact with your product or service and see what they have to say about it. New perspectives can help point out a problem you might have missed out. Furthermore, these people will become your first brand supporters if at all they are showing a keen interest in your product and when you hear their thoughts and opinions.
Do remember to keep an open mind as the thoughts and opinions you receive could be positive or otherwise. This is why you should mentally and emotionally prepare yourself prior to receiving feedback.
Here are some steps to guide you on that process:
- Hold that thought! Your brain will most likely be racing in excitement prior and when you’re about to receive feedback and sometimes, it might jump into bad conclusions. Slow down and take your time to carefully interpret what you’ve just heard or are about to hear.
- The ‘thank you’ card. 9 times out of 10, the last thing people would expect to hear from you is the word ‘thank you’ after they have offered you negative feedback. Doing so will most likely make them respect you and encourage them to be honest with you even in the future.
- What’s the hidden issue? If at all someone isn’t agreeable to one idea, that doesn’t mean they detest everything you have just said. Do remember that these people are trying to help you and they might just be pinpointing a smaller issue or solution that should be taken into consideration.
- Notice the patterns. If you keep hearing the same comments more than once, then it’s time to be aware.
- Listen curiously. Be willing to walk into a conversation where the customer is in control.
- Questions. Try to comprehend why someone was keen or otherwise with something. How could it generate a better outcome? What would be the right way to tackle the situation?
Another way that can help you get through the negative criticisms received is by posting up the positive messages you’ve received. This will not only inspire you but you can hold onto these when you begin sales. Positive reviews online and testimonials can help make a huge difference.
5. Make it official
Get your legal aspects all in order early. By doing so, you need not worry about someone stealing your idea, jeopardizing your partnership or filing a law suit against you for something you never thought could happen. Here’s a quick checklist of things to include:-
- Business structure (Sole entrepreneurship, Pvt Ltd or Ltd)
- Business name
- Business registration procedures
- Bank accounts
- Trademarks, copyrights or patents.
While you can cover some of those things on your own; it’s always best to consult a Legal Adviser when you’re starting up to assure yourself that you’ve got everything covered.
6. Getting your business plan in order
What’s a business plan? A business plan is a written document setting out a business’s future objectives and strategies to be achieved.
Here’s a list of what to be included in your business plan:-
- Title page. Begin by naming your business. What are you going to name it? (It’s tougher than you think!)
- Executive summary. This summarizes what the plan includes which often touches on the description of the company, the problem the business is solving, the solution and why. This may seem rather tedious but it carries most weight when it comes to appealing your potential investors.
- Business description. What kind of business are you looking into starting up? What does your industry look like? How will it look like in the future?
- Market strategies. Who is your target market? How are you going to make a sales pitch to them?
- Competitive analysis. What are the strengths and weaknesses of your potential competitors? What differs you from them?
- Design and development plan. What is the product or service you’re offering and how will it develop? Follow up by creating a budget for that product or service respectively.
- Operations and management. How does the business operate on a daily basis?
- Financial factors. Where is the money coming from? When? How? What sort of projections should you create and what are the factors to be taken into account?
You can spend about one to three pages for each question. Bear in mind, the business plan is subjected to changes and as time goes by and as your business matures, the plan too will be updated.
7. Financing your business
Ways to get the resources you need to start your business are aplenty. Do some research and do take your own resources and circumstances into thought as you decide which option suits you.
- Self Funding. This could be you using your personal savings or selling your assets to generate the money you need for your business. If you’re opting for this option, be sure to get the basics covered. (Emergency funds set aside for you and your family, for example.)
- Friends and family. Gaining support from those who love you is great but there are pros and cons to it.
- Government grants and loans. This seems to be the option most entrepreneurs opt for when seeking funding for their businesses. This is probably due to the fact that most government loans do not require a guarantor, have no profit rate and do not impose a processing fee as they have been actively encouraging entrepreneurship. To name a few; PUNB, MARA, SUPERB, SME Bank.
- Crowdfunding. This is the quickest way to reach out to people when you decide to support your favorite companies and projects via small contributions. In addition, it grants you an opportunity of finding potential funders and building a foundation for your business. Some of the popular crowdfunding platforms in Malaysia are: GoGetFunding, pitchIN, EthisVenture, Actyvate)
- Angel Investors. Someone that aids a business financially to enhance its growth. As such, the financial backers will expect the share of the profit from the company invested. In addition, these ‘angels’ can be involved directly or share their experiences with the company concerned. Some of the Angel Investors you can connect yourself to are Angel Investment Network, Capital and Cradle Fund to name a few.
- Incubators. Sponsorship from government networks will aid in your company’s growth which may come in monetary form or capital form.
- Venture Capitalists. They are sources who invest and expect something in return. They are either sole capitalists or businesses that specialize in this. However, looking for venture capitalists has its risks. They will decide if there is something to gain before investing as long as they get back their returns.
- Partnership. Partnerships has its pro and cons. This is due to the fact that the partner may have more or equal funds and as such they will make their wants and opinions known to your business. This may cause a loss in direction for some.
8. Develop your product or service
After you have put a lot of thought and work into the foundations of your business, the joy of seeing it come to light is even better. With all the work you have put into the business, it is wonderful to imagine it all running right before you but still remember that in any business, you will somewhat need the expertise of others to fully utilise your assets.
There are two major things you should always focus on when it comes to the design of the product; simplicity and quality. When you are finally ready to do product development and contract out some of the tasks, make sure that you:
- Take control of your product and learn consistently. If you were to leave the product development to someone else or another organisation without supervision from your part, you might not get what you wanted.
- Implement checks and balance to reduce risks. Let’s say if you were to hire one freelancer to do the job, there’s a chance that no one will be able to check his or her work. If you were to hire freelancers, hire more so you don’t have to rely on just that one person alone.
- Hire specialists. Get people who are excellent in what they do to do the work for you.
- Don’t put all your eggs in one basket. Be sure to not lose all your progress if someone leaves or if a contract fails.
- Manage product development to save money. Rates can vary for professionals depending on their areas of specialty so be sure that you’re not paying someone who is overqualified when you could get the same end result at a much lower price.
I know this is a lot to take in but do make efforts to start learning as much as you can about it all to further improve your process and your hiring decisions as time goes by.
The process is really different when it comes to service-focused entrepreneurs but it is still as important. You have a number of skills that people are willing to pay you for at the moment of time, however those skills can be hard to express. What can you do to establish yourself and the abilities you hold? You could consider coming up with a portfolio to showcase your work. For example, create a portfolio that comprises of your writing if you’re a writer or a website to showcase your artwork if you’re an artist.
Do make sure that you have the necessary certificates or educational requirements should there be an inquiry on your services as well.
9. Start building your team
In order for a business to run smoothly, you will need a team to work along with you. Whether you need a partner to work with, an employee or a freelancer, these 3 tips can help you find just what you need.
- State your objectives clearly. Make sure everyone understands the mission, vision and their roles accordingly.
- Follow proper hiring standards. You will have to take a number of things into consideration when it comes to the hiring process. For example, background checks and going through personal details.
- Establish a strong company culture. A strong company culture isn’t about the perks it brings you but it is rather about the comfort and positive atmosphere that respects and motivate employees through multiple platforms, including training and support.
10. Find a location
This could be whatever preferable to you; an office, a shop lot or store. Your priorities will be different according to what you need but here are some of the things you should consider:
- Operating Style. Does it portray the style and image you are looking for?
- Demographics. Begin by taking your customers into consideration. How far are they from where you are located and is it important?
- Traffic. If your store depends on the number of people who visit it, make sure that it is easy to find.
- Accessibility and parking. Is your building accessible? Are there parking spots nearby? Let’s be honest. No one would like to come to a place if there’s no place to park.
- Competition. Competitors near you can be good or bad. Will you be able to compete with them?
- Rent, utilities and other costs. Rent would certainly be your biggest expense to cater for but do keep utilities in mind as well and whether they are included in your agreement. You wouldn’t want to start at an affordable price and then find out you’ll be paying much more later on.
- Image and site history. The image you set portrays your business.
11. Start getting some sales
No matter what industry you’re in, the future of your business is highly dependent on income and sales. There are a number of sales strategies and tactics you can use but here are four things to remember at all times:
- Listen. Listening to your clients help you find out what they want and need and how to make it all work.
- Ask for a commitment but don’t push too hard. You can’t be too shy to ask customers for the next step or to close a sale but you can’t also make them feel forced into it.
- Prioritize it. Running a profitable business and making an income is a good strategy in the line of business.
- Be prepared to hear the word ‘NO’. As the saying goes, “time is money.” Some people are too polite. They let you make your sales pitch even though they have no interest in buying in the first place. If people turn you down the first try, it’s okay.
But how do you actually make those sales happen? Identify targets who want your products or services. Try to find people who have adopted the same line of business as you, grow your customer base or post advertisements to find people who fit your business. Then, find out the right sales tactic or strategy that can convert these leads into sources of income.
12. Grow your business
There are many ways to grow your business. You can start something completely new and different, begin targeting a new market, expand your offers and so forth. But, no growth plan will work out if you don’t have the two key attributes that all growing companies have in common.
They have a plan when it comes to marketing themselves. They use social media platforms accordingly on their own, through influencers or paid campaigns. They have a specific email list and understand exactly who they need to target either online or off via their marketing campaigns.
When they have a new customer, they understand how to keep them. You’ve probably heard that the easiest person to sell to is someone you already have. The details of your existing customers are at your fingertips and they would have tested out what you have to offer. In doing so, they are starting a relationship with you and your brand. Help them feel good about the relationship they have built with you as much as you can.
Begin by making use of these strategies which include investing in your customer service and getting personal yet realising that your work will never be complete. Competing for customers in the marketplace will always be a constant. So, keep researching on your target market, hire good employees to work with you and create a product or offer services that differ from the rest and you’ll soon be on your way to building that empire you’ve always dreamed of.