Running your own business is stressful, but a valid career and life choice. It takes a good part of your time and concentration. To start this adventure, you need to know that you will eat bread and work until you firmly establish the business and can get it off the ground. There are different opinions on how to start a business. Read this article to find some basic ideas and guidelines for taking the initiative.
Steps
Part 1 of 7: Having an Idea
Step 1. Come up with an idea
Before making a bold move, you need an idea for setting up the company. This should be an activity that you are passionate about, since a new venture really consumes a lot of time and money.
Try to come up with ideas for the business by identifying the needs of the people, the things they are willing to pay for that are not available in your area or that you can provide better than anyone else
Step 2. Consider if it is possible
Before throwing yourself headlong into the initiative, think about the validity of your idea. Would people really pay for what you sell? Will your work generate enough profits to make all the effort and time you put into the company worthwhile? You also need to make sure that it is feasible to implement what you think. Sure, it would be great to have software that magically makes food appear with one click, but that's practically impossible in real life.
Step 3. Make sure your idea is unique
Whatever it is, it should be as original as possible. This will help you eliminate or significantly fight competition, which will make your business more successful. Adding a little extra detail to an existing product (like simply changing the color of something) is usually not enough to build a business, so try harder than you think is necessary!
Part 2 of 7: Making a Business Plan
Step 1. Determine the cost of the operation
You need a solid business plan to present to potential investors, and the best place to start is to determine the basic costs of the initiative. This will outline a precise pattern and help you figure out how much money is needed to manufacture the product or offer the service you have in mind. This includes manufacturing costs, shipping costs, taxes, employee salaries, workplace rent, etc.
Knowing the cost of the operation is vital in determining whether the business is profitable. In fact, you have to earn more than you spend to stay active in the field
Step 2. Determine your potential market
Be realistic. How many people will actually use what you offer? How much are they willing to pay to buy your product or use your service? If any of these numbers are paltry compared to how much it would cost you to stay in business, then you should reconsider or change your plans.
Step 3. Determine the impediments
You need to plan ahead for any issues that might get in your way of running your business.
- Evaluate the competition. If its market share or product offering is too strong and stable, then you will have more of a difficulty entering the market. No one will want to buy a new version of an existing, well-proven product or service at a similar or higher price.
- You also need to know the regulations and laws regarding the industry, especially regarding taxes and permits. Ask the authorities in your area and read the legislation in force.
- Make sure there are no prohibitive costs involved, such as equipment that is too expensive to make a business profitable. For example, automobiles didn't catch on until Ford found a way to make them economical by building more efficient equipment.
Part 3 of 7: Making a Marketing Plan
Step 1. Establish a budget
Once you have roughly calculated the amount of money needed, write a budget dedicated to the promotion that indicates the amount you can spend on advertising.
Step 2. Think of ideas that fit your budget
Knowing the amount you have, do a research on the costs of the different types of promotion, consider suitable ideas for these methods and their effectiveness for your price range. For example, if you have a good ceiling on advertising spending, you can consider shooting a commercial. If the availability is almost nil, you need to consider ways to use social networks effectively, which is very useful because it requires little investment.
Step 3. Plan the times and places you will advertise
Once you know what type of marketing is right for you, think about the most effective places to promote yourself, as well as the ideal time, day, month or year to reach your target market.
- You need to be sure you are using marketing strategies appropriate to the target you have in mind for your product or service. For example, it is practically useless to use social networks to advertise a cruise company whose target is made up of people over 55. Similarly, if you are promoting a new club, a printed ad in the newspaper is generally not the best way to make yourself known. It is sterile to advertise a business that is only available in Rome to the inhabitants of Venice, so consider the place in and of itself as well.
- If your services are seasonal, you need to consider what would be the best time of the year to advertise yourself. Also, TV commercials need to be scheduled at the right times, so that, at the time of broadcast, they are seen by the demographic you have in mind.
Part 4 of 7: Getting a loan
Step 1. Talk to your bank
Contact a bank you already have a positive relationship with. Learn about the types of loans offered to start-ups and how they can benefit your business. By relying on a bank you know well, the firm will have easy access to your financial records and will feel more confident in making an investment with you.
Step 2. Contact local investors
If bank loans aren't enough, look for investors where you live. You never know: a tycoon or other similarly wealthy person in your city could reap a personal benefit from the success of your business. Research people in your area who may have the funds and motivation to help you.
Step 3. Look for venture capitalists or angel investors
Angels are high net worth individuals, while venture capitalists are corporations. Both figures finance high-risk economic initiatives in exchange for a participation (partnership), and often provide experience, management expertise and contacts. Generally, they operate through a network or an association.
Step 4. Get help from friends and family
People who have known you for quite some time probably have faith in your abilities and intentions. Plus, they're more likely to be on your side when the going gets tough early on in the lead or when you need to raise more funds. Either way, you need to make it clear that money should be considered venture capital, and it could be completely lost or not paid back in the short term.
Step 5. Use crowdfunding
If you still can't get all the funds you need, use websites to raise the money to get started. These funding sources offer several benefits. First, you do not have to pay interest on the proceeds (because these donations are used solely and directly for the actual provision of the product or service). Second, not only will they help you gauge interest in your offer, they'll also help you build a customer base. You will start a business with hundreds or thousands of consumers in the front row to buy and ready to share your initiative with everyone.
Step 6. Offer a report
Whichever source you have obtained funding, be sure to periodically (usually twice a year) provide key operational, strategic and accounting information to investors. It's a good idea to have a board meeting that everyone can attend firsthand. If not, schedule a conference call.
Part 5 of 7: Building the Infrastructure
Step 1. Find an office
You need a space from which to run the business. If you don't have big needs and haven't hired employees, you can design a home office, otherwise you'll need a real workshop or warehouse. Choose an inexpensive neighborhood rental or use business incubators instead of signing a lease in a posh neighborhood. In some places, universities or other entities provide low-rent spaces designed for new business ventures, especially if it involves innovative scientific ideas. This depends on what you will do and the size you want to give to the company. Make sure that the space complies with the regulations and laws for the use you intend to make of it and your budget.
Step 2. Buy the equipment
Purchase all the tools you need to get to work. Equipment may include mechanical tools, computers, telephones, or supplies for crafts. It all depends on the nature of your business. Try to buy in stores that sell wholesale materials for business, as this will give you significant discounts. If you are short of money, the rental solution or a similar contract is also valid, in order to get the company going and avoid blocking yourself.
Step 3. Set up a system for recording income and expenses
You will find yourself paying taxes, trying to understand why 2,000 euros are mysteriously missing, analyzing the income records to find out if Ms. Rossi has actually paid her bill. To do this smoothly, you need a good system to manage business smoothly and efficiently. Invest in filing cabinets, labels, and digital ledger software in order to maintain good organization and find everything you need.
Part 6 of 7: Building a Customer Base
Step 1. Make use of marketing and public relations
You need to have a way to reach potential customers to get them to trust your business. This is especially important when you are just starting out, before you have a stable and regular customer base.
- Advertise in a way that at least minimally attracts the attention of customers, which perhaps goes beyond simple promotion and intrigues them. Be creative and leverage the right needs of the customers you want to win over with your business.
- Offer free samples of your product or service to the right people. That way, there will be someone who will comment favorably on your offer. Word of mouth (like good public relations) is the best way to attract new customers. If you get bad reviews or negative reactions, respond positively and fix the problem. People will be much less critical of your mistakes if you are willing to make up for them.
Step 2. Use good old networking to some extent
Go to conferences, charity gala, meetings with complementary businesses, and wherever there is potentially a high concentration of customers. In other words, publicly get involved and interact with people. Use your connections and friendships to get to know people who may be able to help you. This type of interaction is very important for starting a business. After all, you can't thrive in an airtight environment.
Step 3. Cultivate strong customer service skills
Become good at interacting with people. Practice reading what others are saying between the lines. Learn to meet needs they didn't think they had. Try to figure out how to make them happy. Be charming. Above all, be humble. The customer may not always be right, but you have to be able to make him think he has it.
Step 4. Open a website
The world has moved online. Any business looking to survive the next 10 years absolutely must have a site. People will use it to get in touch with you, know where you are, know your attention hours, ask you questions, offer you suggestions, and maybe even buy your products or services. By having a web page and services available online, you will be able to expand your network beyond your region and even reach the rest of the world.
Part 7 of 7: Getting Paid
Step 1. Firmly request payments due to you
Don't let people take advantage of you. Claim payments due to you within a specific time frame (must be appropriate for your needs). Send invoices to customers as soon as you get the chance. If someone pays you late, talk to them. By ignoring these problems in the hope that they will disappear on their own, you will find yourself working for free, and your business will sink.
Step 2. Accept credit cards
Nowadays, very few people routinely pay cash for products or services. If you accept credit and debit cards, managing your business will be much easier, and it will also be easier to update records and take care of accounting. Do you want to save yourself too high commissions or make your business more dynamic? Try using the Square. This tool can be connected to a smartphone or tablet and allows the customer to swipe their credit card.
Step 3. Organize a system on the web
If you are going to sell products online, you need to make sure you set up a proper online payment system. Services like PayPal make it incredibly easy. Do a search to find the method that's right for you. Either way, you need to be sure the system is safe, whatever it is. You should also avoid having your or customers' information hacked or stolen by malicious people.
Advice
- Make sure your product or service is interesting for the market, the area and the community, not just from your point of view. If not, how could you make it more attractive? Be reasonable.
- Ask for suggestions from acquaintances who run a home based business. They might help you get started.
- Make sure your business is tangibly professional and interesting. Prepare a quality logo, a consistent brand and a well-made website to support your initiative. There are several professionals who can help you get a good result. Do a Google search to find one.
- You have to recognize that getting the business off the ground takes time. Most businesses don't become profitable right away, so plan your private life accordingly. You will make sacrifices to be your own boss.
- Use free resources. The municipal library certainly has numerous useful books regarding company incorporations, business plan writing, marketing strategies, and insights for your industry. There are also specific associations for the various sectors and professions that offer training, information materials, networking opportunities and, sometimes, funding. If you speak English, another good solution is SCORE, a group of retired executives who offer advice to start-ups.
- Before hiring someone, be sure to thoroughly read their resume and arrange a full interview. You must be sure that he has provided you with data, passport, identity document, information on previous work, real licenses. Also, he must be truly honest and trustworthy.
- Make payment methods convenient and affordable. Accept credit cards, offer monthly network plans, run 2x1 promotions or discounts.
Warnings
- Beware of overly friendly shareholders. They could set you traps.
- A company requires all your resources, and you have to put them into play with passion and giving your best. Avoid postponing: even the best ideas die when they are not realized. Once you get one thing in your head, work hard to cross the line, research and talk to industry professionals about what you have in mind, even if you take the time to make an appointment.
- Make sure you take time out for yourself. You need to make sure you are on an exercise program and have time to see your family.
