If you’ve been dreaming about starting a business, it’s time to turn those thoughts into action. After all, wishing for something won’t get you very far. You must set goals for your new business and take steps to achieve them to achieve success.
There are 30.2 million small businesses in the United States, and 400,000 new enterprises enter the market each year. The largest industry for small businesses is health and social services, followed by the hospitality and food services segment. Small business owners cover a wide demographic, but there are more male business owners than female, and the number of businesses owned by veterans and non-veterans are close to equal.
Regardless of the demographic they fall in, many new entrepreneurs are seeking more fulfillment in their careers, more opportunities, or more freedom. They are also looking for business skills and knowledge to help them make their dream a reality.
Understanding the Steps to Starting a Business
Starting a new venture can be difficult, but understanding the steps to starting a business can help fledgling entrepreneurs develop a roadmap to success.
1. Research the Market
Once you have an idea for starting a business, the first step is to conduct market research. This involves gathering information about your potential customers and competition to identify opportunities and reduce risks. Some market research can be conducted online, such as finding data about your industry. The best research, however, comes from talking to your target market. Conduct interviews, surveys, and focus groups to better understand your customers’ needs.
2. Create a Business Plan
Your business plan is your blueprint for taking your venture from the initial idea to a successful enterprise. It prompts you to think about the potential of your business and all the steps involved in getting a product or service to market. Many business owners use business plans to keep track of what they need to do, and to persuade potential partners, investors, and banks to invest in their business. Most business plans include sections about the product or service, marketing strategies, finances, and organizational structure.
3. Register Your Business
Take care of the legalities by registering your business with the federal government, and with your state government if required. At the same time, obtain your state and federal tax IDs and any permits or licenses you need to run your business. The license type will likely depend on your business structure. According to the U.S. Small Business Association, there are seven kinds of business structures. The most common are a sole proprietorship, partnership, corporation, or limited liability company (known as an LLC). These differ on the number of owners, the type of liability they are exposed to, and the type and rate of taxes they pay.
4. Open a Business Bank Account
One of the most important steps when starting a business is separating your business and personal finances. A business bank account lets you clearly see the income and expenses related to your business and helps you stay legally protected. It also allows you to delegate banking tasks and accept money from clients. Once you choose your preferred bank, opening a business account is easy. Banks will often ask for paperwork, such as your employer identification number, business license, formation documents, and ownership agreements.
5. Develop Your Product or Service
The steps you need to take to develop your product or service will depend on what it is you’re offering. You may need to outsource some steps, such as finding a manufacturer to mass produce your product or hiring engineers to develop software. For example, as you start up, you may outsource production operations or marketing efforts if you don’t have the staff to assume those tasks. Remember to retain control of the product to ensure the end result fits your vision. If you’re offering a service, take the time to create a portfolio, define what the service is, and create a website to showcase your skills.
6. Connect with Mentors and Business Advisors
A business mentor can help turbocharge your business success. Mentors and business advisors have already followed the steps of starting a small business and can help you avoid common mistakes. Many entrepreneurs claim that mentorships are vital to success.
Research from professors at Stanford and Boston University shows that quality mentorship has a positive effect on young entrepreneurs. Good mentors and business advisors also bring their networks with them, which can help you connect with customers and potential investors.
7. Develop Sales and Marketing Strategies
Decide on how you will market your product or service. This usually requires a variety of marketing strategies, including word of mouth, paid advertising, social media, and directly contacting potential clients. Your market research can help you see where your potential audience is and how to connect with them, which in turn helps you build your marketing strategies. Also decide how you will track the return you’re receiving on your marketing investments. Finally, spend time determining the lifecycle of a sale and how you’ll convert a contact into a paying customer.
8. Start Building a Team
Some business owners don’t want to grow too large. Others want a large company that takes the world by storm, and they need team members to do that. Decide what your goals are for each new person you bring on board, and determine whether you’re looking for a partner, employee, or freelancer. Keep in mind that these new hires will be taking some of the responsibility of the business away from you. Build a strong company culture and learn hiring essentials — such as asking the right questions and checking references — to ensure you get the best employment fit.
9. Secure Funding
To scale your business, you may need funding. There are many funding options available to modern entrepreneurs, from the traditional bank loan to angel investors and crowdfunding. Angel investors fund startups, usually in exchange for a share of the company. Crowdfunding relies on donations from large numbers of people, likely on the internet, who don’t expect anything in return. Having a strong business plan can help you show investors that your venture has potential. Likewise, a business mentor, discussed earlier, can help introduce you to potential investors and may give those contacts additional confidence in your idea.
10. Invest in the Right People and Technologies
As a small business owner, your funding may be limited, so it’s important to be smart about the people and technology you include in your company. Take time to research the technology you need, whether that’s a standard management solution or email marketing software. Look into the return on investment and whether it’s essential to business functions. Likewise, think about the team members your business needs. Spend the time and money to find people with both the skills and personality to work well with you and meet your company objectives.
Learn More About an MBA from Ohio University
Gaining in-depth knowledge about managing a successful enterprise is one of the steps to starting a business. An MBA from Ohio University allows you to learn online as you follow your business building dreams.