How should you start your own business

  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.