Starting your own business can be a daunting task. Here are seven steps that can start you in the right direction.
Step 1: Personal evaluation.
Begin by taking stock of yourself and your situation. Why do you want to start a business? Is it money, freedom, creativity, or some other reason? What skills do you have? What industries do you know about? Would you want to provide a service or a product? What do you like to do? How much capital do you have to risk? Will it be a full-time or a part-time venture? Your answers to these types of questions will help you narrow your focus and pick a business.
Maybe you don’t know what kind of business fits your goals. If that’s the case, there are many places to get business ideas. Look through the Yellow Pages. Go to trade shows. Buy industry magazines. Check in with the business link. Read the business section of the newspaper.
Step 2: Analyse the industry.
Once you decide on a business that fits your goals and lifestyle, you need to evaluate your idea. Who will buy your product or service? Who would be your competitors? You also need to figure out at this stage how much money you will need to get started.
Step 3: Make it legal.
There are several ways to form your business—it could be a sole trader, a partnership, or a corporation. Although incorporating can be expensive, it is well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you cannot be held personally liable.
You also need to get the proper business licenses and permits. Depending upon the business, there may be regulations as well as permits and licenses to deal with. This is also the time to check into any insurance you may need for the business and to find a good accountant.
Step 4: Draft a business plan.
If you will be seeking outside financing, a business plan is a necessity. But even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need to get started, what needs to get done when, and where you are headed.
Step 5: Get financed.
Depending on the size of your venture, you may need to seek financing from an “angel” or from a venture capital firm. Most small businesses begin with private financing from credit cards, personal loans, help from the family, etc. As a rule of thumb, besides your start-up costs, you should also have at least three months’ worth of your family’s budget in the bank.
Step 6: Set up shop.
Find a location. Negotiate leases. Buy stock. Get the phones installed. Have stationery printed. Hire staff. Set your prices. Throw a “Grand Opening” party.
Step 7: Trial and error.
It will take awhile to figure out what works and what does not. Follow your business plan, but be open and creative. Advertise! Don’t be afraid to make a mistake. And above all, have a ball—running your own business is one of the great joys in life!
*Disclaimer. NB these articles are for informational purposes only. They are not designed to be used as a substitute for legal advice.