First Steps in Starting a Business
You may not know much about starting a business, but you probably do know that there is a lot of work involved and many, many different things to do. There are plenty of detailed articles that take you through the overall process of launching a business, but what are just the first few steps to think about in starting a business? Should you dive into a business plan? Should you think about marketing or finance?
I believe that many if not most people skip over some of these initial steps in building a business too quickly and that can be a big mistake. Some of these initial decisions will the very most important that you make in the entire lifetime of your business, so give them the time and effort that they deserve.
Tough decisions since day one
One of the first decisions comes even before you decide what kind of business you are going to start. This decision is how much time and money are you going to put into your business. Is this going to be something on the side for a little extra income? Or is this going to be business that you work on night and day for the rest of your lifetime?
How much money are you going to invest? Will you have specific limit? A line in the sand past which you put not a penny more? Or will you continue to invest until you don’t have anything left?
Perhaps you don’t have enough money on hand to start the business. How will you finance it? Business loans are usually impossible to get for startups unless there are hard assets involved. Can you get a home equity loan and use the proceeds for your business? How about friends and family? No one likes to ask them for money…but in the end, almost everyone does! If worse comes to worse, maybe you want to approach outside investors. Few startups are likely to attract venture capital money, but maybe you could find an angel investor or two?
Then of course, deciding which business you are going to go into will make a big difference. While I have written many articles on businesses you can start and which are good businesses and which aren’t, let me just give you some quick generalizations here. For one, a local service business is generally a good bet. Competing more or less against national or global competitors, such as often is the case in a product business, is a much riskier scenario.
Another thing to decide in choosing a business idea is to ask yourself if there is a niche or market segment you can target. I find that I often underestimate how much business there is to be had in more specific market niches. Generally, the more specific and more narrow the market niche you enter, the greater your chances of success.
How are you going to get customers for your business? You don’t need an exact marketing plan as you begin to think about your business, but you want to have some idea about how you are going to land customers. For example, if your business will require you the owner to make personal sales calls, but you absolutely do not want to, then perhaps you need to find another business idea.
Establishing brand identity
Another thing to think about early on is the name of your business. A clever name can go a long way to helping a business stand out in the marketplace. Then you might also want to see if there is another business already using the name (formerly called a trademark) that you are thinking about. You also might want to see if you can obtain the URL for your website for the business name you are thinking of.
Ask a lot of questions – not only to your advisers, but also to yourself. Are you starting up with the right reason? Do you really want to do this? Do you really want to make decision making your three-meals-a-day? Do you really have what it takes your startup to the next level – from survival stage to actually thriving stage? Answer the questions well, and chances are, you’ll find success.
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