Do you dream of being your own boss? Or turning what you love into your primary income source? As more start-ups emerge, the thought of getting into entrepreneurship may have crossed your mind. While it may seem exciting, it comes with its challenges and issues. However, with proper planning, hard work, and dedication to execute it, achieving this dream is not farfetched.
Over the years, the entrepreneurial world has seen numerous success stories of initial stage start-ups turning into billion-dollar companies. Some of the more famous examples include Facebook, Uber, and Airbnb. Several business owners claim that their success is primarily due to sheer luck. But what they call luck is, in reality, wise decision-making and following the proper steps to start a business. And so, stepping into an entrepreneur’s shoes requires much more than a good idea and some capital.
It’s always smart to prepare yourself thoroughly before starting something new. However, when it comes to business, you must understand that some things are bound to go awry. To help you improve your brand’s potential, follow this step-by-step guide to transform an idea into a reality.
Step 1: Gain relevant knowledge
As a novice, you may find it intimidating to see business professionals around you boasting about their knowledge. But it’s important to remember that they, too, were once rookies like you. It was by gaining relevant education and skills that they could get where they are today. Degree programs like a Master in Business Administration can provide you with the necessary training to navigate the entrepreneurial world. Additionally, if you live in one of the best cities for MBA graduates, you can benefit from the opportunity to learn from other experts nearby.
Besides theoretical knowledge, learning basic hard and soft skills can also help you build your business correctly.
Step 2: Polish your idea
While having an extraordinary idea for your business is crucial, the chances are someone else has already done something similar. Do thorough research by surfing the internet and combing through available resources to identify how your idea differs from previous ones. Learn all there is to know about the current business leaders in your chosen industry and how you can offer better products or services than them. Maybe you can offer lower prices, faster delivery, or a better customer experience. You can even test your idea by pitching it to close friends and associates and gauging their responses. Use the feedback you receive to refine, polish, and modify your vision before moving on to the next step.
Step 3: Come up with a business plan
Once you have a better idea of what you want to do, it’s time to work out how to achieve it. Some questions you must address in your business plan include:
- What will your business offer?
- What’s unique about it?
- What is your customer demographic?
- How can you fund your initial costs?
- What is your marketing strategy?
- Things you need to launch a business
A business plan is the backbone of your company, the foundation on which you’ll build up your enterprise. More importantly, it’s the first impression you provide prospective investors or partners based on which they decide whether they believe in your idea or not. You must, therefore, carefully think it through and consider all concerns—potential or otherwise.
Step 4: Secure financing
With your business plan in place, you’ll know how much money you require to get your idea up and running. Next, determine the source of getting these funds. Some people have money saved up that they can invest in their business, while others look towards pitching their idea and raising funds. Find the best approach that aligns with your business goals and helps you achieve the objectives within the set timeline.
Most start-ups fail because they underestimate the initial capital that goes into starting a business. Companies have no choice but to shut down before turning a profit. Overestimating your finances to ensure your business can generate sustainable revenue may be wise. Some popular ways to fund your start-up are:
- Business loans
- Business grants
- Venture capital
- Business incubators
- Personal investors
Step 5: Choose a business structure
Registering your business is essential to make it a legal and credible entity. But before registering your company, you’ll have to decide the type of organization it is. This step is crucial due to legal implications, ranging from how you file taxes to any personal liability you may face if something goes wrong. Therefore, you should consider each option carefully before launching your venture.
Depending on the state or country you live in, the type of business structure may vary. But typically, there are three basic choices you’ll have to pick from:
- Sole proprietorship
This structure is for businesses with a sole owner or only one individual running the entire company. With no clear distinction between the business and its owner, all profits will go to you. However, you’ll also be responsible for all potential losses, debts, and liabilities.
If you don’t want to combine your company’s liability with your personal one, choosing a corporate business structure may be a better option. It keeps your business separate from owners and can sue, own property, sign contracts, or assume liability, just like an individual. This type of business structure can generally raise large amounts of capital.
- Limited liability company (LLC)
LLC is a hybrid business structure that combines sole proprietorship and corporation characteristics by providing personal liability protection to owners while minimizing tax and legal requirements.
Step 6: Get registered
You must first acquire the necessary licenses and documents to operate your business legally. Registering and trademarking your brand ensures no one else uses that name and keeps it unique to your enterprise. Local and federal laws also require you to state the purpose, corporate structure, stock details, and other details to recognize it as a legal entity.
Filling out certain forms to meet the tax obligations may also be necessary before you receive legal permission to launch your business.
Mixing your expertise with a passion for a business idea can be a powerful combination. Besides giving you the confidence to achieve your goals, it provides the necessary skills to execute your plan efficiently. However, you must still recognize that sometimes things don’t work out the way we expect them to. Therefore, follow this tried and tested guide to launch your business and keep yourself from falling into potential pitfalls.