Do you have a dream to start your own business, but no clue how to bring it to life?
All businesses start from somewhere, and all have hours of hard work, resilience and patience behind them. A budget can only get you so far, as you need to complete all of the necessary steps too. Whether you have qualifications, or even previous experience, is irrelevant. As long as you have a big idea and you’re determined to work to see the job through, you can make it happen.
You may also need a little nudge in the right direction. That’s why we’ve created an 11-step guide on how to set up a business, to help you through from ideation to creation. From how to write a business plan to learning how to market to the right people, read on to set your business up for success today.
- Brainstorm your business
- Market research
- Write a business plan
- Assess your finances
- Choose a business structure
- Sort out the legal aspects
- Develop your product or services
- Set up a business location
- Building your team
- Put yourself out there
- Grow your business
1.Brainstorm your business
The first question to ask yourself is: what do you want out of this project? Maybe you want to become an entrepreneur and create your own source of income, or perhaps you want to monetise a hobby or skill you’ve already got. Is there a service that you think is missing from the market, or one that you can improve? Whatever your reasoning is, you need to have one. Motivation is key to achieving success.
Once you’ve established your “why”, you can start to think about the “what”. What product or service are you going to be selling? Is it feasible and profitable? Do you know enough about it? You might not have concrete answers for all of these questions, but it’s good to have a rough idea. When you have the basics in place, ask yourself how you can apply your own skillset to your business, or what skills do you need to source to make it happen.
The ideation stage is crucial, so there’s no room for skimping. Flesh out your idea into something that you can fluidly present to someone else. If you can answer all of their questions, you’re on the right track. If you’re struggling to come up with solutions already, you may need to rethink your idea. Think Dragon’s Den, minus the lights, camera, action.
2. Market research
When you’ve formed an outline for your idea, it’s time to go out and hear from the people who you’ll be selling to. Find out who needs what you offer, where the demand is and how you can fulfil that demand. Is there even a demand for it? Demographics, geographics, behaviour patterns and pain points form the basics of what you should aim to find out. In the words of Bill Gates,
“The way you get innovation is to fund research and learn the basic facts.”
And the only way of getting these facts is by actively looking for the answers. From surveys and interviews, to online and secondary resources, there are plenty of ways to find the data you need.
Market research of your audience is only half of it. Scout out your competition and find what they’re doing to get a sense of how your business will fit into the market. This may even give you ideas on how you want to position yourself as a brand to make you stand out from the crowd. All of the data you’ve gathered should form an audience profile to help with your targeting strategies, and it should always be referred back to at every stage moving forward.
3. Write a business plan
Remember when we said that you don’t need to have your business fully mapped out yet, but a rough idea will do? Now is the stage where you need to develop that rough idea into a solid business plan. Writing a business plan gives you a blueprint to guide your business from start-up to success.
Your business plan should take all of the questions from the initial brainstorming stage, and answer them with the market research you carried out in the second stage. It should map out where you want your business to go, how it will overcome any potential issues and how you are going to sustain it. As your business progresses, your goals will naturally change. A plan will help you to look back, assess performance and update your goals.
Make sure to cover these points in your plan:
Title page
Include the legal name, logo, address and contact details of your business.
Executive summary
This is a top-level overview of your business that briefly states your company profile, long-term goals, mission statement, product and services, customer base and financial projections. This is usually written last.
Business description
Define the vital facts about your company, what you want to accomplish and how you’re going to accomplish them. Talk about the market and how you’re going to fit in.
Product or services
Clearly describe what product or service you’re going to be selling, and prove that you’re adding value to the existing market.
Market analysis
This is all about showing that you’ve researched and identified the industry you’ll be operating in. How are you going to sell to your target market? What’s the demand like?
Sales and marketing
Outline how you’re going to advertise and promote your service and discuss your pricing strategy.
Management plan
Discuss the legal structure and ownership of your business. Include the management team, external resources and services and how the business will be managed.
Operation plan
Highlight the physical requirements of running your business: office and warehouse space, equipment, inventory and supplies, labour and production.
Financial analysis
Talk about how you’re going to finance your business, future growth and an estimation of your operating costs.
Appendices and exhibits
This is where you will include documents or data that support any of your statements or listings that you’ve spoken about in the previous sections. It could include: graphs and charts, photographs, marketing materials, research, credit histories for the business owners, CVs of employees, office/site plans and other supporting materials.
4. Assess your finances
Starting up a business takes some initial investment to cover the starting operation costs, so how are you going to cover that? It can take a while for some startups to eventually start turning over profit, so carefully plan out your budget and take precautions should this be the case. Start off by roughly calculating your expenses to give you an idea of how much money you’ll need.
Next, you need to think about where you’re going to source the money from to keep your business going in the early stages. If you have the resources, you may consider funding your business yourself. However, if you need financial assistance, there are plenty of options.
You could request a small business loan or grant, crowdfund online, apply to angel investor groups, request a bank loan or even trade equity or services in exchange for help.
5. Choose a business structure
Defining your business structure means deciding what kind of entity your business is.
If you want to completely own your business and be fully responsible for all business operations, you may want to be the sole proprietor. If your business has several owners, you can apply for a partnership instead. This is the best option if you’re looking to bring someone on board who has skills that you lack.
Being the sole proprietor or a business partner can affect your personal credit, so you may want to separate your own liability from your company’s. It will make your business a separate entity apart from yourself. A popular structure that small startups opt for is a limited liability corporation (LLC).
Once you’ve selected your structure, it’s not set in stone that you have to stay as that. As your business progresses, a different structure may be more apt to your business needs, and you can change to a more suitable option.
6. Sort out the legal aspects
In order to be officially recognised as a business, you must register with the government. There are several legal aspects to finalise. Think about consulting with a lawyer to make sure you’re covering all of the essentials. Here are the basics:
- Business name
- Register your business
- Take out insurance
- File for your federal tax and state tax
- Get your licenses and permits
- Set up the necessary bank account
- Finalise trademarks, copyrights or patents
7. Develop your product or services
You’ve put in the effort of organising the paperwork and sorting the legal aspects, so now it’s time to make your product live up to and exceed expectations.
Start off with identifying the skills or hiring a manufacturer to produce your product or service. Once you’ve found a way to create, you need to optimise. Product development and quality control are areas that will need careful crafting, and will likely need to be repeated several times to ensure you reach the quality you’re happy with. No matter how tempting it is to cut costs by producing a cheap product, your focus should always be quality.
Once you’ve carried out the product development and quality improvement stages, you should have a good gauge on how expensive it is to end-to-end produce your product or service. Take these expenses into account when considering your product pricing.
8. Set up a business location
Your business location is the heart of your operations, so finding the right place is key. It also depends on the size and scale of your business. Whether you have a home office, a private or shared office, a physical retail location or you hotdesk, be sure to pick the best location to maximise productivity.
Consider:
- Geographical location
- Customer demographics
- Accessibility
- Competition
- Equipment
- Ordinances
- Rent, utilities and additional facility costs
- General set up
9. Building your team
Unless you’re looking to run a one man show, you need to build your team to help you carry out your vision and build your business. You need a reliable team that you can delegate to.
“To win in the marketplace you must first win in the workplace.”
– Doug Conant, CEO of Campbell’s Soup
If you’re hiring, always make sure to outline the job role and responsibilities when you hire for a position. This way, your employees will always know what the job entails. Fostering a great work culture and environment is also conducive to a successful and smooth-running business. A positive atmosphere where your employees feel empowered and driven has a hugely positive knock-on effect in the office.
Don’t want to hire permanent employees? Consider outsourcing work to contractors or hiring freelancers to share the burden of workload.
10. Put yourself out there
Despite the effort expended putting your business together and developing your product, you can’t simply expect results without building up your brand and marketing your wares. You’ll want to create a following of people or trail of interest for your product when it launches. Creating strong branding is really important for building a good relationship with your target market and instilling a feeling of trust in your company and your product.
A unique logo, distinct brand colours and tone of voice will help to distinguish you from your competitors. Keeping them consistent across all customer touchpoints is how your audience can identify you. Build a user-friendly and informative website to serve as a central hub for your audience and anyone interested in your business to visit and find out more about the products or services that you offer.
Next, develop a strong marketing strategy to help put your brand in front of the right people. Use social media, paid ads, content marketing and SEO to widen your reach and target users online. You might also want to try offline marketing, if that’s the most effective way of reaching your targeted audience, and your budget supports it.
Building a brand is one of the cornerstones to setting up your business for success. Effective branding will help you to retain and attract customers, proving that it’s just as an important step as any other.
11. Grow your business
So you’ve put in the effort to set the foundations for your business, but now you’ve got to sustain it. Whether you want to acquire another business, target a new market, expand your products or services or simply drive more customers to your existing business, growth and expansion is how you’re going to keep your business afloat.
Whatever your plans for growth are, you should use the data and insights you’ve gathered so far to help inform your plans. Define your unique selling points (USPs), hone your marketing plan and reward your existing customers to build your position as a brand.
The market is constantly changing so always be aware of the economic climate that you’re operating in. If business is doing well, you might even want to expand your team further to take on new skills. Keep persevering and innovating to make your business a success.
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