The starting point of a business is a viable business idea, one that can be converted into a tangible product or service for commercial purposes as not all ideas can be implemented. If you want to start a business, the chances that you already have an idea in mind hence in this article, we will focus on the steps to be taken to ensure a smooth entry into the market.
Here is all you need to know:
Before entering your chosen industry, it is wise to do an analysis of the existing companies and their means of conducting business to help you identify what to do better or focus on.
Research involves focusing on the demographics of clientele and these answers can be achieved through conducting surveys, questionnaires and public data. This can help identify client preferences and the limitations in the industry.
Here the entrepreneur asks themselves questions such as What do I hope to achieve with this business? Who am I selling to? How will I run this business? A well-written business plan should answer all these questions.
A well written helps one avoid the mistakes many people make by rushing into a business as it makes one think extensively about the business and helps one figure out where the business is going and its resources.
Analysis of finances
Any business no matter how small it is requires some monetary input hence the entrepreneur needs to figure out how they will cater to these costs. Failure to figure out finances often leads to business lacking the running capital leading to collapse of a business even before it makes profit.
Funding options are vast hence we should analyze the various options. They include the following; Business loans -This is available through a bank loan or a lender.
Business grants - these are like loans with the exception that there is no payment back. This advantage however comes at a disadvantage as they are very competitive and have a set of requirements that one has to fulfill to qualify. Narrowing on the specific brackets hence helps e.g., female-owned businesses.
A tool of planning that helps business owners plan how much money they need and their chances of profit is the break-even analysis. The formula is easily applicable:
Fixed costs divided by [Average price -Variable Costs] which is equal to Break Even point
This test helps not only in determining profitability but also in picking a price for the product or service.
Selection of legal business structure
Selection of what business entity you will have is essential before registration. Business structure affects everything about the business from how it is run to the steps to be taken in the event of dissolution.
Having discussed the various business entities, it is up to you as the business owner to determine what works best for you and in the event that you cannot decide you can consult a legal advisor.
Registration with the government
As straight forward as this sounds it is not as easy as you will require several licenses. One must register with the federal, state and local government. To become recognize as a business entity, one must be registered with the government.
For corporation’s registration includes a document known as ' articles of incorporation ' that contains the business structure, name and purpose and for those businesses that don’t have it the next step is to register the business name [your legal name or made-up name]. This is especially for sole proprietorship for which trade marking the business name offers extra legal protection.
One also needs to fill certain forms so as to fulfill the tax obligations of both the federation and state. The business structure affects the tax forms and when starting a business one should look at the local regulations and state specific tax obligations.
Purchase an insurance cover
The right insurance cover goes a long way in the success of a business hence it is essential for one to purchase one before launching. A business owner needs to be properly protected while dealing with issues such as property damage, theft and even consumer lawsuits.
No matter how small a business is there are a few basic covers that one will benefit from e.g. unemployment insurance and workers' compensation. Other covers such as General liability insurance or business owner's policy covers bodily damage, property damage and personal injury to yourself or a third party. In the case of a service the professional liability insurance may offer protection in the event of neglect in service or mistakes.
It is highly unlikely that you will be the only employee in your business hence a team that will help in the carrying out of affairs is necessary. Human resource is an integral part of the running of a business hence identifying, identifying and determining your interaction is important.
This may also involve the selection of vendors. Companies such as phone and security firms exist to partner and help run affairs. Not to say that all businesses will need vendors but there are common products and services that each business does, as discussed above.
Before selling a product or service one must build up a following of people willing to buy the item as soon as you are open for business. There are several ways to do this;
Social media - We live in an era of technology where the majority of people have accounts on social platforms hence It is a good place through which to market one's business.
Logo- A logo is necessary so as to help people better identify your brand, and ensure to use it across all platforms so as people associate the logo to your product.
Company website - Many people to inquire about the legitimacy of a business turn to the internet and a website offers proof that it exists and is also a great way to interact with current and potential customers.
Creating a market plan is essential in getting the word out about your business hence continually building clientele. One can also create opt in forms which are forms of consent given by web users authorizing you to contact them with further information.
With the steps discussed above one can transform their business idea into a success and can mark the hold in the business world.