7 Key Steps To Consider Before Starting Your Own Business
Starting a small business is no small decision and it certainly doesn't happen overnight. It requires many steps and as an entrepreneur, you must be willing to dedicate most of your time to the process. Entrepreneurs are so focused on the product or service before starting a business, that they often overlook the fundamental structure needed to support the business. Sometimes it’s the smallest things that make the biggest difference between a successful or failed launch. According to a recent study, 50% of small businesses fail within the first year. So, the more you plan and research before starting a business, the more likely you’ll be to fall into the 50% that succeed. Here are few essential steps you should consider before starting your business.
The first essential step before starting a business is to research your potential market. Many entrepreneurs have found out the hard way that there was not enough market share for them to capture or have realized that their target market audience was too limited. There are many questions that need to be answered before you even consider starting a business. For instance: Who needs what you are offering? Can you define your ideal customers? Is the market national? Is there space for your product or service in the market? Is it a niche? etc.
Understand your Audience
After doing market research, you must turn your attention to your Audience. Who are they? They could be potential customers and clients, influencers in the Industry, or people who are just interested in what your company does. What does your audience want and like? Begin to create a few different personas of the type of people who would engage with your business. What kinds of issues are relevant to them? Understand your audience so that you can cater your services to them. Don’t try to please everyone; instead, target your communication to resonate with that ideal audience.
You cannot start a business without capital. Research the costs associated with your business. Determine what you have, how much money you'll need and how you will go about getting it. Practice your pitch and start writing a business plan if you wish to seek investor funding or financing.
The right name says a lot about your company. It may seem obvious, but the name is how your business will be known to the world. The name should be catchy, easy to spell, easy to remember and easy to pronounce. Make a list of potential names and narrow the list down to the one that best describes your company in a few words. Another thing which you should also consider that how the name will translate to a web domain name. You'll also need to do research to see if there are a) similar domain names and b) similar business names.
Business attorney & accountant
You'll need to hire an attorney who experienced with startups to advise you about drafting contracts, reviewing your lease and determining the right business structure. The accountant will work in conjunction with your attorney. A good accountant will play a significant role in determining the best form of ownership and tax planning.
It’s vital to decide your business structure before starting a business as it will decide the future of your company. Personal liability, taxes, paperwork and regulations vary greatly among the different legal business structures. Your attorney and accountant will play a key role in assisting you in this important decision. Your choices include sole proprietorship, general partnership, limited liability corporation (LLC) or corporation.
Licenses and permits
Research all licenses applicable to your county and your state. Along with a business license, depending on the type of business and state laws you may need to get additional licenses to manufacture and/or sell specific products such as liquor, firearms or even lottery tickets. Before you open a business, it's also important to know the zoning laws. Many professionals, such as real estate agents and contractors, need to be licensed in the states in which they work.