Does the idea of starting a small business get you excited? Of course it does, else you wouldn’t have read past the headline of this post.
Admittedly, there are several reasons people choose to start their own business, and they all revolve around these major 3:
- To gain financial freedom
- To enjoy career freedom – there is nothing as sweet as being your own boss
- To validate a business idea
Truth be said – starting a business, no matter how small, can be tough – there are lots of hurdles to be crossed. Worse, starting a business, though tough, is nothing to be compared with grooming the business to success over time. Statistically speaking, one out of every three businesses fail in their first two years, and 1 out of 2 live beyond their fifth year of incorporation – scary huh!
Simply put, the odds are stacked high against you. The good news, however, is that your business could be among the ones that not only survive but thrive.
To get you up and running with starting a small business you would be proud of, here are 7 easy and actionable steps to follow.
1. Determine all that is required of you
One classic mistake many people make when trying to start up a business is to jump into it without first counting the cost. While it is true some people neatly get away with this, several others have lost their head in the process.
Starting a small business has its benefits as well as its cost, some of which include:
- Time: If you thought starting a business would give you more time, think again. At infancy, your new business could take as much as 18 hours of your time every day, so be willing to put in the grind.
- Skill: No matter how fantastic your business idea is, you need a skillset to bring it to fruition. Luckily, you don’t have to be a guru – a heart that is willing to learn is enough.
- Money: Well, you don’t really need capital to launch a business – freelance business model stands as a testimony to this. You will, however, need money to run it, no matter the model of business.
2. Validate your ideas
Hate to break it to you, but that fantastic business idea of yours is only fantastic to, well, you, and maybe a bunch of friends.
It is important to find out how well people will accept your product/services, hence the need for a research. Additionally, conducting a research helps you uncover untapped niches within your industry, thus helping you jump the waiting line of competitors.
There are several ways of validating an idea:
- Giving free product samples to customers in return for their review
- Sneaking up on competitors in the same industry
- Conducting surveys
Be creative – think outside the box.
3. Don’t waste time trying to pick the right name
It is easy to fall into the trap of waiting so long to pick the right name and brand proposition for a business.
What many wannabe entrepreneurs do not realize is that a business name, tagline or brand message can always be changed at any time. Amazon, the world largest online retailer, first started with the name “Cadabra” when it was incorporated in 1994 – told ya!
As a rule of thumb, start with whatever name you have in mind – things will take shape in due time. Only ensure that the name you chose isn’t ambiguous.
4. Set your budget
Unless you intend running a freelance business, you will need an initial investment when starting a business. This money will cover inventory, advertising, rent, and overhead cost, as well as employee salary.
Most importantly, you need something to live on within the first 6 months to one year of starting your business since revenues might be low at first.
As you may know, there are several ways of financing a business: loans, angel investing and self-financing are the commonest.
If you chose the self-financing route, it is advised you keep your day job while validating your ideas, or save enough that would see you through for at least a year.
5. Chose a legal structure
It is required by law for wannabe entrepreneurs to state the legal structure they wish to operate with when starting a business. Sole proprietorship, limited liability and partnership are great options to choose from.
Each of these structures have their own set of cons and pros – it’s up to you to determine which would be best fit.
Do bear in mind, however, that a business structure when chosen can always be changed.
6. Register your business
You are required by both state and federal law to register your business before obtaining an operating license. Don’t dilly dally with this task – get on with it as soon as possible.
7. Spread out words about your business
If people don’t know your business exists, you are out of business already.
The easiest way to spread out words about your business is by setting up a website and then using cost effective promotional tactics like Google and Facebook ads to promote it.
Also, you can sign up to “Google my business” – it is a free online directory which enables small business owners to achieve visibility. It tells prospective customers exactly where to find you.
Setting up and successful business is very achievable no matter how competitive the market might be. But be prepared to put in the grind, you will never have any regret for doing so.