"'Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do". - Mark Twain
There are so many different variables when considering to start a business. For Example, the type of business structure to select ( LLC, LLP, Corporation, S- Corp), whether you should have a Brick and Mortar, an e-commerce, and many more. All these variables depend on the type of business you intend to start. However, there are 8 certain steps I believe an aspiring entrepreneur should consider before getting a business started.
1. Your Mind set.
Your mindset is very important; if your mind isn't right your decisions, plans and strategies will not be right either. We usually get in the way of our own success with our over-thinking and negative emotions. Analyze and focus on your goals and do not let your negative emotions get the better of you. You can achieve this by setting realistic goals for your self and business, thinking positive, and remaining CONSISTENT.
Questions you should ask yourself:
Why do you want to start a business?
Can you do this by yourself or do you need a partner?
Do you want to provide a service or a product?
How much money are you willing to risk?
Will it be part- time/full-time or part-time with intentions to become full-time?
How will this venture impact your life as well as others?
The answers to these questions should help you narrow your focus on what you want and intend to offer your potential customers. It should also help you realize your strengths, inspirations and capabilities.
2. Analyze your Industry
Once you figure out the type of business that will best suit your lifestyle and goals; do some research on the industry you plan on doing business in. This will give you a snapshot of how your industry is performing and it's trends. Once you conduct your research you will know your potential competitors and get a general idea of your audience. Now this research is as simple as a google search; do not PAY anyone for this type of information.
3. Research your Niche
Your niche is your target audience. You need to research the way your target audience behaves and the best way to get them to buy what you are selling. You need to determine how hard or easy it will be to address your audience.
Important questions to ask yourself:
How urgent does a potential client/ customer need what you are offering?
How big is the market? is it saturated? if so, why should people buy from you?
How easy and how much will it cost to reach your target audience?
How much money do you need to launch?
How long will it take to launch?
If you can answer these questions before starting, it will be much easier for you to run your business once you get launched.
4. Set up your Business
Figure out which business entity is best for your business. The three categories are:
Sole Proprietorship- no legal documents needed to establish.
Partnership- similar to a sole proprietorship but with two or more people.
Corporation- Separate legal entity with many owners.
There are different variations within each category that considers the level of liability for the owner(s), tax treatment, set up cost, and other factors. Incorporating a business can be costly, but it is worth it. A corporation ( LLC, C- Corp, S- Corp) becomes a separate entity that is responsible for the business. If something should go wrong, individual shareholders are LESS likely to be held responsible.
Once you have chosen you business entity you need to check if you business name is available with the Secretary of State ( there is a fee), register your name and fill out the application and provide the necessary documentation for your business. Just like that you have a company!
If you plan on financing your business from outside sources you will need a business plan and a business pitch to present to banks and investors. If you plan on using your own financing its still a good idea to make a business plan. A business plan is a map of your business- detailing and outlining your plans, strategies and goals.
While you may think it's a lot of work for a small business, but your business plan may attract potential business partners or unexpected investors. However, the primary goal of your business plan is to define your strategies, tactics you plan on using, budget and short term/ long term goals.
There are different ways you can secure funding for your business. You can ask a family member(s) or trusted friend(s) for a loan or to invest in your business, you can use your credit card (not recommended), you can save up some money to start your business or personal loans ( not recommended).
As a start-up it is hard to receive outside financing from banks or investors unless you have a solid business plan and an almost excellent personal credit history. I financed my business with some of the money I had saved up and use my business credit cards ( I make sure that I spend what I can cover and pay it on time).
7. Setting up your platform
Now that you have your plan and strategies in place, business registered, and money in the bank, it is now time to set up your space. Depending on your business and the product or services you offer you may need a physical space. If you are building an e-commerce business you need a online platform to host your website. There are many reputable website platforms available. Choose a platform that corresponds with your budget and your business needs. The following is a small list of e-commerce platforms that you can use ( not ranked in any order):
Knowing the information that I know now and the current business model that I have I would have used Shopify as my online platform. Shopify has a lot more automation integration if you decide to drop ship, also has a lot of up to date features to make your website more efficient for your customers and for yourself.
When I searched for a platform I based my initial decision on cost and I am now paying for that mistake. Wix.com offers an option for a free website and the rates for the e-commerce support / platforms are very attractive, but in the long run end up spending a lot more than you would with the additional add- ons ( basic business starts at $23 a month). Shopify starts at $29 a month but with enough support for a start-up business that you would not need the additional costly add- ons until your business starts to grow.
8. Trial and Error
Give yourself time to learn how to run your business. You will make mistakes, you will feel defeated, and you will want to quit. Expect mistakes and learn from them, if you don't make mistakes you aren't growing. It's natural to experience emotional ups and downs. sometimes I become anxious and wonder why I am adding more stress to my life. When I start thinking about giving up, I go back to the reason why I started and re-focus. That is why step number 1 is extremely important, your mindset plus the other factors determine whether you will persevere or fail.
I will have a detailed post on the different business entities and the e-commerce platforms.
Tell me what you think in the comments or if you have any questions, or are in need of clarification.