Startups have become quite a norm in the US, as they make up an overwhelming 99.7 percent of all businesses. People are more willing to create their own company, as they get more flexibility, independence, and get the chance to develop their own ideas. Doing this is no easy task, so here are a few tips which might help you learn how to start a new business.
What you need to know before starting the business
A startup might become one of the biggest challenges you will face. Many people would like to work in such a company, since the working environment is more relaxed. However, leaving your current job either to work or to start a new business is risky.
Statistics show that only two-thirds of all startups survive for two years. As time passes, this number gets even smaller, as only half of them are still active after five years. Also, you need to have enough money to do it. You need all the licenses that all businesses need to be active, you have to buy all the equipment, find a space to activate and, last but not least, pay the employees.
Although this is serious, it shouldn’t stop you from pursuing your dream and starting the business. You can still succeed even if you don’t have an endless supply of money.
How to Start a New Business
1. Thoroughly research your field of interest
First of all, you need to choose what you want to do. If you decided you want to start a new business, then you must have already chosen what you want to do. However, before acting, make sure you know what you have to do.
Even if you love your business idea, it would be unprofitable for you to start it when there’s no real need for it on the market. Therefore, you have to perform some research and look at the demand. Also, you should identify the segment of customers that is more interested in what you’re offering. This way, you will know how to present your products and services.
You can easily obtain the opinion of the customers via quizzes or focus groups. What you should also keep in mind is the competition. Make sure you know what other similar companies exist on the market, and what they have to offer. Analyze the toughness of the competition and, more importantly, the services they don’t have.
2. Make a short plan for your business
Whenever you want to start something, you have to make a plan. If you want to create a startup, you will need a business plan. This will represent your main guidance through the incipient phases of your business, as well as during its growth stages.
Depending on what you are planning to do, you can get use types of plans. If you think you don’t have all the necessary financial means, you can seek help from an investor of a bank. In this case, what you need is a classic business plan. However, this process is more difficult, as each move you make needs to be approved by the bank or investor.
If you don’t need extra funds from a third party, then you can build a simple business plan. It shouldn’t exceed one page, as it’s better for you to keep everything simple. Don’t try to achieve more than you feel capable of doing, you have plenty of time to do that.
3. Carefully manage your funds
Finances are an important step while learning how to start a new business. For a startup, you shouldn’t need a huge amount of money. However, it’s important to start planning and managing these funds cleverly. Also, you should be capable of dealing with the extra expenses you’ll face before you start making profit.
To have everything under control, put up a list of all the things you have to pay for. These should include fees, licenses, equipment, branding, or insurance. Also, add another list of an estimate of other expenses over a period of 12 months. Among these, there should be salaries, rent, utilities, possible travel expenses, subscriptions, advertising, and supplies. The results of these two lists represents the money you need at the beginning.
4. Choose the business type you want
Before starting the business per se, you have to decide what you want. There are four types of business entities, and you need to know everything about them while learning how to start a new business. The entities include corporations, partnerships, proprietorships, and limited liability companies (also known as LLC).
At first, one category of business might attract you. Then, as your company starts evolving, you might find it suitable to change it. There’s no problem if you make this decision, but you have to be informed. Before settling on a business entity, it’s better to discuss all the legal concerns with an attorney. Also, they can advise you on the type that best suits your needs.
5. Choose the name of your business and then register it
One of the most important things about your business should be the name. This will be the first thing that attracts the attention of potential customers, so a good name might mean a profitable business. Once you picked it, then you should check if there’s another company with the same name or if there’s an existent trademark on it.
If everything is alright, then you should register the name. Depending on the type of business you have chosen, there are different ways to do the registration. For a proprietorship, you can do the registration with your county or state clerk. For the other types, the registration takes place whenever you file the formation papers.
6. Solve the administrative problems
For the activity of your business to start, you need to settle the details. This means you need to find a space where you can establish your headquarters. Once you found the space, you need equipment for the type of activity you have chosen.
For everything to be legal, you need licenses for all the tools and software you’ll use. The business itself will need some licenses and special permits, so make sure you take care of all the paperwork.
7. Find your ideal team
In the end, your business won’t work without people. Find those employees which can help you with your activity and who are happy to work in a more flexible environment. Pay attention to the job offers you will develop, and start doing interviews. If you’ve never hired people before, make sure you read about being a good employer.
Once you’ve learned how to start a new business, there’s a long and difficult way until you achieve your first success. However, the road will seem less tough if you enjoy what you are doing. If you paid attention to all the details, then your business should turn profitable quite soon.