According to research, it is estimated that there are over 28 million small businesses in the United States alone. This is a huge number making up over 99.7 percent of businesses in the United States. What actually drives so many people into business? This question we leave to Mrs. Smith who operates a medium-sized cosmetics shop in Chicago. “Personally I started this business to achieve financial independence because I was jobless. I also needed something to keep myself busy.” This is the main reason there are so many small businesses everywhere – financial independence. But it is estimated that more than a third of small businesses do not survive for over two years. Ouch! That sounds heartbreaking, right? Worse, half of them do not go beyond five years. This basically shows how starting a long-term successful business is a real challenge. But you can reduce the chances of getting into a business destined to fail in the future by following all the steps in this article.
Here are the ten golden steps I used to start my business which turned seven years two months ago. Please take these steps one at a time. Don’t rush through them, and you will see success knocking on your door by itself. Now let’s start.
Step one: Do an Extensive Research
Once you have your idea ready, it is time to do some brainstorming over it. It is time to run it through a validation process and scale it with some reality. Your idea must emerge successful in this phase before you move to the next step, else you will be taking a dead horse to a race.
For your business to be successful, it should be solving a problem in the market. You can use techniques like prototyping, focus groups, and market research to determine if your idea is capable of solving a problem for consumers. Research the market size. Get to know who are your competitors and if there is anyone else offering the same product/service as yours.
Step two: Make a Business Plan
If you have reached this stage then your ideal is the most ideal. It is time to start actualizing your business. A business plan is a master plan that will guide you from the initial stages of starting your business to maturity. There are different types of business plans. You may need a traditional long plan or a simple short plan. The type of plan you choose depends on how you plan to raise your finances. It is important to note that you must have a written plan. It will really play a key role in guiding you.
Step three: Raise Finances
Not all small business requires money to start. Most businesses will cost you some money to set up and cover some expenses before you realize profits. It is good to write down all the costs involved in opening the business and the money that will be needed to keep your business open. All these costs put together are what you will need to raise as an initial investment. Once you know how much you need, you can raise the capital through means like crowdfunding, small business loans, small business grants, angel investors, personal finances, or even family support.
Step four: Come up With a Business Structure
Some of the common business structures are the sole proprietorship, partnership, Limited Liability Company, and corporation. Different business structures have different characteristics with respect to how you take loans and even how you file returns for the business. I highly recommend that you seek legal advice before choosing the structure of the business.
Step five: Register Your Business
The name of your business is very important, before registering it, make sure you have the best name for it. It is also important to make sure the business name is unique. A sole proprietor can register their business with a county clerk. The rest of the other businesses normally register their business once the paperwork is filed.
Step six: Acquire Licenses and Permits
Different business structures require different types of licenses and permits. The location aspect may also play when getting the permits. It will be good to research the types of licenses you need before applying.
Step seven: Choose Accounting System
For your business to run efficiently, you will need a reliable and efficient accounting system. A good accounting system will help you to manage the budget, rates, prices, and file your taxes. You can set up the system yourself or hire a professional accountant to do the job.
Step eight: Get Business Location
All businesses require a physical location to operate. You need to get a strategic location best for your business. The location actually accounts for the success or failure of your business. You should be very keen when choosing your location.
Step nine: Get Your Team
Now it is time to start recruiting people who will be part of your business. It is advisable to take your time to outline the positions you will need to be filled and the job responsibilities of each position. Some businesses may not recruit employees but choose to work with independent contractors. It is a nice idea but ensures you sign contractual terms.
Step Ten: Advertise Your Business
Now your business is live. You need to get clients coming in and get things moving. You can start promoting your business by writing a unique selling proposition. This will help in creating a marketing plan. With time you can explore other marketing strategies for your business like social media campaigns and the use of posters and flyers.
These are my ten golden steps to starting a successful business. Once you have established your business through these steps, I can assure your business is built on a strong foundation to overcome any storm. As I conclude, always remember success does not happen overnight. It will require you to work hard consistently over time to enjoy the fruits.