Things you need to know before starting a business!

Microsoft. Google. Amazon. All names that you must’ve heard at least once in your life. Today, these businesses are at the top of the market and have made a global impact in the last few decades. As more large businesses emerge and mark their place in the market, the number of small businesses also grows. You may need a college degree to work for an established business, but like Amazon, Microsoft, or Google, you can start your own business from your garage with no college degree! You can’t just wake up one day with the thought of starting a business. For a business to be truly successful, you need a creative idea with hours, weeks, or even months of planning. Before you start a business, you need to know some things, and this blog teaches you all what you need to know!

1. Find a creative and unique idea.

You need an idea to build your business upon. Think of the idea as a seed. You need the seed before you water it, adding fertilizer, and growing it. It’s what your garden (the company) grows from.

There are several questions you can ask yourself to find an idea for your company: What is something you can provide? What is something that you would use but is not present in the market? How can you improve a product in today’s market?

2. Conduct Market Research

Market research allows you to identify your target customers. It comprises consumer behavior and economic trends to improve a business. Gathering demographic date—age, wealth, family, interests, etc—allows you to better understand opportunities to gain customers. Think about demand, market size, economic indicators, location, market situation, and pricing as you are conducting market research. You can conduct market research using existing sources or directly. You can conduct this research directly through surveys, questionnaires, forms, interviews, etc. This allows you to gather enough information to drastically reduce risks even before your business is properly established.

3. Write a business plan

Writing a business plan is the first step in building a solid business. An excellent business plan guides you through starting and managing your business. You can use it as a template to structure, run, and grow your business. This will help convince potential investors that your company is reliable and a good choice. There are two main categories of business plans:

traditional or lean startup. Traditional plans are more common, use a standard structure, and encourage you to be detailed about everything. They require more effort and can be dozens of pages. Lean startup plans are usually one page long and follow a standard structure, but they focus on summarizing the most important points of all the key elements in your plan.

4. Determine your target audience

You need to identify who your product is made for. Is it made for elderly people? Teenagers? Babies? This will help you improve your product to better fit the needs of your audience. You will attract your target audience since your product suits their needs.

5. Choose a formation

Now that you have your product and your audience. You need to form your business. You can choose between a sole proprietorship, partnership, or corporation. A sole proprietorship is when you are the only owner of the business. A partnership is when the business is divided between 2 or more people. A minimum of 2 people is required to create a partnership. You can register your business as a one-person corporation or divide the business between 2 or more individuals.

6. Get business registration, licenses, and tax identification

You need to register your business to get the correct licenses, taxpayer identification number, and employer identification number. You need to make sure you get specific permissions if you need regulations to be flexible. Having an employer identification number helps you protect your identity, file business taxes separate from personal ones, and establish a reputation for your company.

7. Map your finances

Investors are interested in how much money your business will have in the beginning and how much it will need in the future.

Wherever your revenue will come from, include it in the business plan. Investors typically want to know these three things: How much? How long? What is the exit strategy?

8. Choose a name

Your name says a lot about your business. Choosing the right name for your business is crucial. You want the name of your business to reflect your brand identity. Once you choose your name, you need to protect it.

You can protect it in 4 different ways:

- An entity name offers state-level protection

- A trademark offers federal protection

- Doing Business as (DBA) doesn’t provide protection but is sometimes legally required.

- A domain name protects your business website address.

9. Open a business bank account

Keeping your business and personal bank accounts is a good idea so you can keep track of your business expenses easier. Common business accounts can be a checking account, a savings account, a credit card account, or a merchant services account. Business bank accounts offer perks personal ones don’t:

- Protection

- Professionalism

- Preparedness

- Purchasing power

10. Get proper insurance

Each company requires specific insurance based on the industry, location, etc. Getting the right type of insurance is a difficult decision. There are several insurances to choose from: health, auto, directors and officers, liability, performance bond, travel, and life. Understanding the differences and choosing the right one will be the best for your business.

11. Find suppliers and identify operating costs

You have a product in mind when starting a business. Finding the people who will manufacture and supply the product to you are important for your business to run successfully. Creating a contract with suppliers will help your business run a lot smoother. Finding the right supplier means you need to negotiate a price with them, be satisfied with their delivery times and quality. When you have your supplier, you can identify your operating costs. Your operating costs are how much you pay per month to run your business. Getting as much revenue as your operating cost is a break-even, but if you get more revenue, you make a profit.

12. Create a marketing plan

A marketing plan is a strategy to communicate with your target audience and promote your products. There are several types of marketing plans:

- Advertising plan

- Branding plan

- Print marketing plan

- Retention plan

- Public relation plan

- Email marketing plan

- And more!

A marketing plan comprising a combination of these is the best way to market your product and will help your business be successful.

13. Establish online presence

A business’s web presence mainly comprises a website. Purchasing a domain with the name of your business establishes credibility and is consistent. You can develop a website through a developer or something like wix.com. Making sure your website has the desired functionality and easy operation is key. If the website doesn’t allow a customer to make a purchase or is difficult to use, the website isn’t too helpful. Creating accounts on several social media with the same name also improves the credibility of your business and increases your outreach.

14. Establish your business!

Last but not least, you need to officially launch your business!

Sources:

“12 Steps to Take before Opening a Business.” Business.com, https://www.business.com/articles/10-things-you-must-do-before-starting-a-business/.

“15 Things to Consider before Starting a Business.” MPM Consulting Services Inc., 8 Apr. 2021, https://mpm.ph/before-starting-a-business/.

Choose Your Business Name, https://www.sba.gov/business-guide/launch-your-business/choose-your-business-name.

“Everything You Need to Write a Marketing Plan.” Business.com, https://www.business.com/articles/sample-marketing-plan-outline-and-template/.

Fund Your Business, https://www.sba.gov/business-guide/plan-your-business/fund-your-business.

Market Research and Competitive Analysis, https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis.

Open a Business Bank Account, https://www.sba.gov/business-guide/launch-your-business/open-business-bank-account.

Small Business Administration, https://www.sba.gov/business-guide/10-steps-start-your-business.

“What to Do before Starting a Business.” Business News Daily, https://www.businessnewsdaily.com/1484-starting-a-business.html.

Write Your Business Plan, https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan.