Tips on Launching a New Business
Starting a business is both an exciting and a daunting process. Many entrepreneurs either only focus on the big picture or the small details, meaning that necessary steps are often missed. Here are the most common steps needed to succeed in getting a business off the ground.
1. Write a Business Plan: Writing a business plan is not an easy task, but it’s certainly necessary. A business plan lays out the current and future market conditions, who the business competitors are, and overall marketing and business strategy and objectives. The main point of the business plan is to get the entrepreneur thinking about the product, market and potential for the business. The business plan also shows potential investors or loan providers that the entrepreneur is serious and has thought through all aspects of the business.
2. Get Training: While someone may have a good idea, that may not directly translate into knowing how to launch a business. Many different organizations like the Small Business Administration and non-profits offer free or inexpensive training to help with business plans and finding financing and legal assistance. Also, find a mentor who has experience in the selected industry. According to Forbes, finding a mentor is necessary to being successful.
3. Take Care of Legal Requirements: There are many legal steps to setting up a business, including:
a. Obtaining an accountant and attorney: To help with all legal and tax issues.
b. Determining the business structure: Is it a sole proprietorship, LLC, C-Corp or S-Corp?
c. Registering a Business Name: This must be done with the state.
d. Get a Tax ID Number: Via both the state and IRS.
e. Insurance and tax information: This may include workers’ compensation, disability insurance, payroll taxes, sales/use tax, self-employment tax, OSHA requirements and unemployment.
f. Obtain other necessary licenses and permits.
4. Get Funding: A startup isn’t going anywhere without funding. Investigate all types of funding, from venture capitalists to personal loans to grants. If possible, open up a business line of credit to pay for services and product needs.
5. Learn How to Make the First Sale: The final step is getting the first sale. Yet, even this involves some legwork. Entrepreneurs may have to manipulate pricing to determine what makes the most sense for this initial phase of business. Then, it’s a matter of:
a. Listening to the market to determine needs.
b. Coming up with a sales pitch that adequately covers the selling points and differentiators of the business products.
c. Learning how to close the deal. The first sale is always the hardest, especially for entrepreneurs not used to selling. Once the first few sales are made, however, the sales process gets easier. Once successful, the startup can invest in a sales team to take over this process.
While there’s no one way to start a business, following these steps will get most entrepreneurs past the major initial hurtles.