Thousands of people set up their own company every day. Some do it so they can work for themselves; others because they have spotted a gap in the market, and there are those who want to make a fortune. If you want to get started in this, just wait – you would not bungee jump off a cliff without bringing the right equipment, so why start a business without being prepared? Taking some time to develop a plan will help you get ready for the risk and challenges to come, and help make your start-up business a success.
1. Have a realistic idea
A good idea does not necessarily mean a profitable business venture. Many would-be entrepreneurs fail because they neglect one crucial element in running a business – the market. Ask yourself, would someone else pay for the products or services you provide? Keep your product or service simple. The more complicated a business is, the riskier it gets, particularly for a novice entrepreneur. Spend some time on market research. It helps you figure out your target market, potential customer, how much they will pay for the products and so on. The market research also allows you to know your competitors better: who are the other players in the market, and how can you compete with their products and services?
2. Turn your idea into a reality
Develop a well-structured business plan using the information from your market research. It may include a market analysis, management plan, financial plan and operations plan. Meanwhile, ask yourself whether your business will involve working with partners, suppliers and distributors. You might consider working with several partners in a team, with whom you share responsibilities like getting funding, expertise and sharing contacts. Draw up a list of all potential suppliers. Go and talk to them to negotiate prices and develop relationships.
3. Figure out the legal issues
Do you know the difference between a corporation, LLC, PLLC, LP and LLP? If not, talk to someone who does. The decisions you make in the beginning may cost you serious dollars down the road. Some other things you need to know include tax, legal obligations and insurance. Many insurance professionals provide free advice, so there is no reason not to be educated on your business’ insurance needs. You need basic insurance at least, and if you have employees, you need other required types of insurance like worker’s compensation. We live in a very litigious society, and small things can lead to serious legal consequences. See a lawyer if necessary.
4. Connect with customers
In the early stage of your business, promote your products or services by boosting your social media presence. Offer your followers discounts, tweet behind-the-scenes pictures and engage with potential customers as much as you can. Creating a website is also a good way to market to potential customers.
5. Don’t be ashamed of asking dumb questions
When you first start a company, there is going to be a lot you do not know – but, you do not have to figure everything out on your own. Talk to as many entrepreneurs and experts in your field as possible and ask them questions about the challenges you are facing, how to write a marketing plan or whether you should be an LLC or S-Corp. There are plenty of people who have paved the road of entrepreneurship before you, so go find them and seek their help.
About the Author: Yuan Liu is a freelancer who is opening a small cafe with her friends. Instead of buying the equipment, they decided to make use of a finance lease service from FlexiCommercial so as to conserve cash for other investments.
Photo credit: Victor1558