How should you start your own business?
1. Conduct a
personal evaluation
“Know yourself, and work in a job that caters to your strengths. This knowledge
will make you happier.”
Begin by taking
stock of yourself and your situation:
• Why do you want to start a business? Is it money,
freedom, and flexibility, to solve a problem or for some other reason?
• What are your skills?
• What industries do you know about?
• Do you want to provide a service or a product?
• What do you like to do?
• How much capital do you have to risk?
• Will it is a full-time or a part-time venture?
Your
answers to these types of questions will help you
narrow your focus.
This step is not supposed to dissuade you from starting your own
business. Rather, it’s here to get you thinking and planning.
To start a successful business, passion alone isn’t enough.
You need to plan, set goals, and above all, know yourself.
What are your strengths? What are your weaknesses? How will these affect
day-to-day operations?
As you get started, your business will likely dominate your life so make
sure that what you’re doing is stimulating and challenging, but not completely
outside of your expertise.
You’re going to be in it for the long haul.
Use what you learn from the SWOT analysis to think through what you want
your life to be like, not just what you want from your business.
Some
good questions to ask yourself include:
• What would you do if money wasn’t an issue?
• Is money really important? Or rather, is making a lot of it really
important? If it is, you’re probably going to be cutting out several
options.
• What really matters to you?
• Do you have the support of your family, especially your immediate
family? They may have to make sacrifices at the beginning, so it’s important to
have them behind you.
• Who do you admire in business? Maybe there’s even someone in the
industry you’d like to go into.
2. Analyze your industry
“The more you know about your industry, the more advantage and
protection you will have.”
Once you decide on a business that fits your goals and lifestyle,
evaluate your idea. Who will buy your product or service?
Your “personal evaluation” was as much a reality check as a prompt to
get you thinking.
The same thing applies when it comes to researching your business and
the industry you’d like to go into.
If you don’t have time to perform the research or would like a second
opinion, there are people you can go to for help, like government departments
and your local SBDC.
There are also some less traditional sources worth turning to:
• Advertising representatives for statistics and data on your competition
or the industry in general
• List brokers sell mailing or email lists based on demographic
attributes.
Like, if you think your target market is people making above a certain
income in south Texas, a list broker may be able to tell you how many people
fit that criteria, to give you a sense of how big your target market actually
is.
• Industry suppliers (again to get a sense of demand and for market
information)
• Students who will likely be happy to perform research for you at an
affordable fee.
3. Evaluate
your target
audience
Validate your business idea by creating a pitch page.
To determine how attractive your prospective market really is (your own
desires aside for the moment), we suggest doing a market analysis.
4. Set up your business
Realistically, registering your business is the first step toward making
it real.
However, as with the personal evaluation step, take your time to get to
know the pros and cons of different business entities.
If at all possible, work with an attorney to iron out the details.
This is not an area you want to get wrong. You will also need to get the
proper business licenses and permits.
Depending upon the business, there may be city, county, or state
regulations as well.
This is also the time to check into insurance and to find a good
accountant
Types of business formations include:
• Sole proprietorship
• Partnership
• Corporation
• Limited Liability Company (LLC)
5. Start
the planning
process
“Our goals can only be reached through the vehicle of a plan, in which
we must fervently believe, and upon which we must vigorously act. There is no
other route to success.”
Even if you do not think you need a formal business plan, you should go
through the planning process anyway.
The process will help to uncover any holes or areas you have not thought
through well enough.
If you do need to write a formal business plan document, you should
follow the outline below.
6. Have a plan
for funding
Depending on the size and goals of your venture, you may need to seek
financing from an “angel” investor or from a venture capital firm.
But, most small businesses begin with a loan, financing from credit
cards, help from friends and family, and so on.
Investment and lending options include:
• Venture capital
• Angel investment (similar to venture capital)
• Commercial (banks)
• Small Business Administration (SBA) Loans
• Accounts receivable specialists
• Friends and family
• Credit cards For in-depth information on funding, see our complete
guide on how to get your business funded, which includes detailed information
on each of the above-mentioned options.
7. Set up your space
Your business plan has been laid out, the money is in the bank, and
you’re ready to go.
If your business is online and you won’t need a storefront, you’re
probably looking at building your website and choosing a shopping cart
solution.
Maybe you’ll be able to work out of a home office or a co-working space
instead of renting or buying office space.
But if your business needs a dedicated brick-and-mortar location, there
are many considerations.
8. Prepare for
trial and error
Whether you’re starting your first or your third business, expect to
make mistakes.
This is natural and so long as you learn from them, also beneficial.
If you do not make mistakes, you do not learn what to do less of and
what to emphasize.
Be open-minded and creative, adapt, look for opportunities, and above
all, have fun!
The great thing about owning your own business is that you get to decide
what you want to do and where you’ll grow.
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