1.Come up with an idea.
You will need an idea for a business before you do anything else. This
should be something you are passionate about, since your new business
will consume a great deal of your time and money.
- Come up with business ideas by identifying things people need which
no one else currently provides, that isn’t provided in your area, or
which you can provide better than anyone else. 2Consider if it is plausible.
Before going too far, think about how plausible your idea is. Is it
something that people would actually pay for? Will it turn enough of a
profit to be viable? You will also need to be sure that it is possible
to implement. While it would be great to have a computer which makes
food magically appear out of thin air, this is simply impossible (unless
you’re Patrick Stewart.)
3 Be sure it’s unique.
Whatever your idea is, be sure it’s as unique as possible. This will
help you eliminate or significantly combat competition, which will make
your business more successful. Simply putting a small spin on a
currently existing product (making blue Redvines or something like that)
is not usually enough to build a business on, so push the envelope!
1
Determine your cost of operation.
You will need a solid business plan to present to any investors and the
best place to start would be with determining your basic cost of
operations. This will outline and help you determine how much money is
needed to produce the product or offer the service you intend to offer
or produce. It includes production costs, shipping, taxes, worker’s
wages, rent for workspace, etc.
[1]
- Knowing your cost of operations will be vital to determining if your
business will be profitable, since you will need to make more than this
baseline in order to remain in business.
2
Determine your potential market.
Be realistic. How many people will realistically use your business? How
much will they pay to use your services? If either number is too small
in comparison to how much it will cost you to stay in business, then you
should reconsider or change your plans.
3
Determine impediments. You will need to plan ahead for all of the problems which can get in the way of running a business.
- Evaluate your competition; if their market share or product offering
is too strong and stable, then you will have a very hard time breaking
into the market. No one will want to buy an equally priced or more
expensive version of a perfectly good product or service which already
exists.
- You will also need to explore the associated regulations and laws,
especially regarding taxes. You should ask your local state authorities,
as well getting information from the IRS.[2]
- Make sure there are no prohibitive costs, such as equipment which is
too expensive to make the business profitable. For example, cars didn’t
take off until Ford figured out how to make them cheap by building more
efficient equipment.
1
Write up a budget. Once
you have a general idea of how much money you have to work with, write
up a budget for marketing which indicates how much money you have
available to spend on advertising.
2
Create ideas fitting your budget.
Once you know how much money you have, research the costs of different
types of marketing and come up with ideas which fit those methods and
are effective for the price range. If you have a lot of money to spend
on marketing, for example, you can consider shooting a commercial. If
you have almost none, you’ll want to think about ways to use social
media effectively, which is very effective for requiring little money.
3
Plan timing and location of marketing.
Once you know what kind of marketing you intend to do, think about the
most effective places to advertise and what time of day, month or year
are going to work best to reach your target market.
- You will want to be sure that you are using marketing which is
appropriate to the type of people you expect to be interested in your
product or services. There is little point in using social media to, for
example, advertise a 55+ only cruise line. Meanwhile, if you’re
advertising for your new dance club, a printed newspaper is probably not
going to be your best bet. There is also no point in advertising a
business only available in Chicago to people in Seattle, so consider
physical location as well.
- If your services are seasonal you will want to consider what the
best time of year would be to advertise. Also, television advertisements
will need to be timed so that the right demographics will be watching
when they air.
1
Talk with your bank.
Talk with a bank with whom you already have a positive relationship. Ask
about what kind of business start-up loans they offer and how they can
benefit your business. By using a bank you already know, the bank will
have easy access to your financial records and will be more confident in
investing with you.
2
Get local investors.
If the bank loans will not be enough, look into local investors. There
may be a local business tycoon or other similarly wealthy person who
would have a vested interest in seeing you succeed. Research people in
your area who may have the funds and motivation to help you.
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3
Seek venture capitalists or angel investors.
Angels are high net worth individuals and venture capitalists are
companies. Both fund a promising high risk venture for a stake
(partnership) and often bring experience, management expertise and
contacts to the table. They usually work through a network or
association[3].
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4
Approach friends and relatives.
People who know you for a long time are most likely to have faith in
your ability and intentions. These are also the people who are likely to
stand by you if the going gets tough in the initial stages of your
venture or you need to raise more money. However, make it clear the
money is intended as risk capital and they might lose it completely or
may not be returned in the short term.
5
Use crowd-funding.
If you still can’t drum up enough funding, use websites to raise the
money you need to start. These funding sources have several benefits:
you will not have to pay interest on the money you get (since it is
money which is used to provide actual product or services) and it will
help you not only gauge interest in what you have to offer but also help
you build a customer base. You’ll start business with hundreds or
thousands of customers already lined up and ready to tell other people
about what you have to offer.
6
Report. No matter which
source you raise funds from, be sure to provide key operating, strategic
and accounting information to your financiers periodically, usually
twice a year. It's a good idea to hold a board meeting if everyone can
physically attend. If not, do it via teleconference.
1
Get an office. You will
need a space from which to run your business. This can be a home office
if you require little space and will not have employees, or it can
require an entire workshop or warehouse. Look at renting in a low cost
neighborhood or business incubators instead of a fancy address. Some
universities make space available at a low rent for new business
ventures based on an innovative scientific idea. It depends on what you
will be doing and how big you intend your business to be. Make sure the
space is coded and legal for how you intend to use it and within your
budget.
2
Purchase equipment.
Purchase all of the things you need to start work. This can mean
mechanical equipment, computers, telephone, or craft supplies. It all
depends on what you are doing. Try to purchase from business supply
companies as they will have significant discounts. If you are short of
capital, lease or rent is an attractive option too, so as not to block
your funds.
3
Create a records system.
From doing taxes to figuring out why you’re mysteriously missing $2,000
to searching through customer records to find out if Mrs. Jones did in
fact pay her bill, you’re going to want a good records system to help
your business run smoothly and efficiently. Invest in file cabinets,
labels and digital records software to keep you organized and on top of
things.
1
Make use of marketing and PR.
You will want to reach out to potential customers in ways that make
them want to use your business. This is especially important when you
are first starting, before you have an established, regular customer
base.
- Advertise in a way that catches customers attention at a minimum and
hopefully goes beyond to capture their imagination. Be creative and
appeal to the right aspects of the customers you want to use your
business.
- Offer free samples of what you do to the right people, in order to
get people saying good things about what you have to offer. Word of
mouth (i.e. good PR) is the best way to attract new customers. If you
get bad reviews or negative feedback, respond positively and fix the
problem. People will be much less judgmental about mistakes if you’re
willing to fix them.
2
Use a little old fashioned networking.
Go to conferences, charity galas, meetings with complementary
businesses and anywhere where your customers are likely to be highly
concentrated. In other words: get out in public and interact with
people. Use your friends connections to meet people who may be able to
help you. This kind of interaction is very important for starting a
business. You can’t exist in a vacuum after all.[4]
3
Have great customer service skills.
Be good at interacting with people. Practice reading between the lines
of what people say. Learn how to meet needs they didn’t know they had.
Figure out how to make people happy. Be charming. Most importantly, be
humble. The customer may not always be right but you need to be able to
let them think they are.
4
Have a website. The
world has moved online. Any business that wants to survive the next ten
years is going to have to have a website. People will use it to contact
you, find your location, learn your operating hours, ask you questions,
make suggestions, and maybe even buy your products or services. In
having a website and services which are available over the internet, you
will be able to expand your service area out across your region or even
the world.
1
Require payment. Don’t
let people take advantage of you. Require payment within a specific
window of time (whatever is appropriate for what you do). Invoice people
as soon as you possibly can. If someone is late in a payment, talk to
them. If you ignore these problems hoping that they go away, you will
find yourself working for free and your business in the tank.[5]
2
Take credit cards. Very
few people consistently pay for products or services with cash any more.
It will be much easier for your business, as well as records keeping
and accounting, if you accept credit and debit cards. If you want to
save yourself ridiculous fees or keep your business more mobile,
consider using the Square. This device plugs into a smartphone or tablet
and lets you swipe customer’s card.
3
Set up an online system.
If you plan to have products for sale online you will need to make sure
to set up an accord online payment system. Services like Paypal make
this incredibly easy. Research to find out which method is best for you.
However, make sure that whatever system you use is secure. You don’t
want either your information or your customer’s information to be hacked
or taken advantage of.
TIPS TO NOTE:
- Make sure your product / service is appealing for the public, area
and community not just in your perspective if not how can you make it
more appealing? Be sensible.
- Ask people you know that run a home based business. They could help you get started.
- Make sure your business looks professional and is attractive to the
eye. Have a professional logo, branding that is consistent and a
professional website to support it. There are several groups that will
help you with all this, for example. Startyourownbusiness.net.au and
vistaprint.com.au.
- Recognize that getting your business off the ground will take time.
Most businesses don't become profitable right away, so plan for that in
your personal life too. You will be making sacrifices to be your own
boss.
- Use free resources. Your local library contains numerous useful
references regarding incorporation, writing business plans, marketing,
as well as information specific to your industry. The Small Business
Association, Chambers of Commerce, AMEX Small Business website,
associations for your industry, associations by ethnicity...all of these
offer training, materials, networking and sometimes financing. Another
good option is SCORE, a group of retired executives who provide business start-up advice.
- When hiring, make sure you have an in depth review and interview of
the worker. Make sure you get their real information, passports, id ,
former work, license and many others that they are truly honest and they
are dependable.
- Make paying convenient and affordable. Accept credit cards, offer
monthly payment plans, promote product with buy one get one free offers
or sale prices.
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