7 Steps on How to Start a Business

Starting a business is certainly a daunting task and presents an entrepreneur with a myriad of challenges. However, to achieve your goal as a business owner and become a successful entrepreneur, there are certain cogent factors to consider and a road map to follow.

Here Are Important Steps

(1). Refine Your Idea

If you're planning to start a business, you, probably, have some idea of what you want to sell, or the service you would like to provide; or at least have an idea of the market you want to enter. Then, it's imperative you do a thorough research for companies already operating in your chosen industry. Try to know the strategies employed by the current brand leaders and see how you can do it better.

So at the end of the day, if you are convinced that your proposed business can deliver something other companies don't - or you can deliver the same thing, only faster and cheaper - then, it's a pointer that you're now ready to build your business plan.

(2). Create a business plan

When you have gotten a clear idea of what you really want to do, then you need to consider a few more things; ask yourself questions like: What do I want to achieve with this business? Who are my potential customers? How will I cover my startup costs? Of course, these probing questions should give birth to your business plan.

Writing a business plan is not just a walk in the park, it's harder than that, however, it is one of the most important steps you need to take before starting a business. You see, oftentimes naive entrepreneurs tend to skip this very important step and rush into starting off with their ideas without taking a proper thought and then sculpt a unique business plan to guide them. This often results in a disaster; this is one of the reasons many startups go under before they even start making profits.

You need to identify your target customer base. Who is going to buy your product or service? Also, factor in short-run and long-run costs. Consider potential threats and opportunities in your chosen niche, also, your exit strategy. All these will help you design a well-balanced business plan. It's instructive that you hire the services of a professional (or use a software) for a better outcome, if writing a business plan is not your thing.

(3). Evaluate your finances

You need to determine how you're going to cover the costs and expenses involved in starting and running a business. Is it within your means to fund your startup, or will you need to borrow money? It's important to find out how much your startup will cost.

Carrying out a break-even analysis is an essential element of financial planning because it helps business owners determine how much they need and when their company, product or service will be profitable.

Take a look at the formula below, it's a simple one!

Fixed Costs / (Average Price – Variable Costs) = Break-Even Point

Why must every entrepreneur use this formula as a tool? Because it provides information about the minimum performance your business must attain to avoid operating at a loss. Moreover, it helps you understand exactly where your profits come from, as such, you can set production goals accordingly.

In specifics, here are the three most common reasons to conduct a break-even analysis:

(a)Determine profitability: When you ask yourself: How much revenue do I need to generate to cover all my expenses? Which products or services generate profit and which ones incur loss? Then a break-even analysis comes handy.

(b) Price a product or service: For a business owner to fix an accurate pricing for their product, they must factor in the cost of production and how competitors are pricing their products too. You need to know the fixed, variable and total cost. The cost of any physical goods and the cost of labor.

(c)Analyze the data: What quantity of goods or services do you have to sell to be profitable? Aslo ask yourself: How can I reduce my overall fixed costs? Can I reduce the variable costs per unit? How can I increase sales?

(4). Determine your legal business structure

It is very important that before you proceed to register your company, you need to decide what kind of legal entity you will like for your business. This is because it will determine how you file your taxes and what becomes of your personal liability if something goes wrong.

A sole proprietorship would be advisable If you own the business entirely by yourself and plan to be responsible for all debts and obligations. But, it's of signal importance to know that this option can directly affect your personal liabilities.

On the other hand, you might want to consider a partnership; what it means is that two or more people are liable as the business owners. It's sometimes advisable to have a business partner with complementary ability to yours to add some flavour and help your business flourish.

But if you want to completely separate your personal liability from your company's liability, then you may want to consider forming a corporation. This will ensure that the business maintains a separate entity apart from its owners, and, as such, corporations can own property, assume liability, pay taxes, enter contracts, sue and be sued like any other individual.

However, for a more informed decision, you need to consult with an expert to determine which is the best option for you based on your peculiar circumstances and preferences (you might want to consult with Dunster Inc).

(5). Register Your Business with the Government and IRS

Once you have determined the right legal entity for your business, then go ahead and register with the government. A Corporation will need "articles of incorporation" document, which includes your business name, business purpose, corporate structure, stock details and other information about your company.

Or you may decide to register it as a business name, which can be your legal name, a fictitious "doing business as" (DBA) name, especially, if you're a sole proprietor. Your business may also require licencing or you may want a trademark for your business to provide extra legal protection. All these are better handled by lawyers or experts; click here to learn more on how to register your company in the US through experts.

(6). Set up your team

Joe Zawadzki, CEO and founder of MediaMath, succinctly, captured it when said,

"Your product is built by people," he continues, "Identifying your founding team, understanding what gaps exist, and [determining] how and when you will address them should be top priority. Figuring out how the team will work together ... is equally important. Defining roles and responsibility, division of labor, how to give feedback or how to work together when not everyone is in the same room will save you a lot of headaches down the line."

Except you plan to run your business all by yourself, building a team that will help you achieve your set goals for your company is extremely important.

(7). Brand Your Business and advertise

Note that before you start selling your product or service, it's important to build up your brand and garner a following of potential customers ready to patronize you as soon as you launch your business.

Have a social media presence, also create a logo that will help people easily identify your brand, and it should be consistent across all of your platforms. Needless to say that, you also should have a business website! The truth is that for your business to thrive in our present society, you need a website - irrespective of what business you are into. These things will more than help your business to succeed.

In conclusion, starting a business as an entrepreneur could be overwhelming, however, if you follow these steps circumspectantly, you will be better well prepared to start a business and succeed.