Anyone can become a successful entrepreneur. You do not necessarily need to be highly educated or have a ton of cash in the bank. History has also shown that you do not even need to have extensive business experience to become a successful business owner.
What you will need is a great idea, a solid plan, grit and determination to succeed and see it through.
This step-by-step guide will help turn that great idea into a successful business.
Start by Evaluation Yourself
The first thing you should consider is:
“What is the reason you want to start a new business?”
This question and the subsequent answer will help guide you through many decisions such as; what kind of business you want to start.
There are many reasons why people want to start new businesses. Perhaps it is in response to a fantastic new product or idea, to generate more money or more freedom in life.
Once you have identified the reason and you know the purpose start to consider more about yourself and confirm you have what it takes to build a successful business:
Some questions to consider:
- What sort of skills do you possess?
- What are you most passionate about?
- What is your area of expertise?
- Realistically, what are you able to spend and how much capital do you have?
- What is the lifestyle you want to achieve?
- Are you ready to become an entrepreneur?
It is really important that you are brutally honest with yourself in these early stages. You will build the foundations of your future and your business by answering these questions. It is much better to know the truth now rather than later when perhaps you have already invested money.
Generate a Business Idea
If you already have a fantastic business idea you are one step ahead. This section is probably not going to teach you much so you can move straight onto the next section; Market Research.
If you are still trying to think of a business idea, there are lots of methods you can utilise to brainstorm ideas and lots of questions you can ask, detailed below.
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Below are some suggestions which you might want to consider when thinking of that fantastic business idea:
- Think about what is next:
Is there a way that you can get ahead of the curve by thinking about an advancement in technology or software or even a product that is coming soon?
- Can you solve something:
Can your business idea solve a problem, solve access to a certain product type or fix a common consumer pain point? These business ideas are generally winning ideas.
- Can you improve something already available:
Putting a fresh set of eyes on an already existing service, solution or product can be a great way to enter a new business into the market.
Seek advice from entrepreneurs. It really does work! Have a look on LinkedIn, see if there is anyone out there that inspires you, whos success you want to emulate and reach out to them with a sincere genuine request to ask some questions; why wouldn’t they want to pass on their experiences, it is human nature. We learn and we pass that experience on.
Never underestimate the value of research. It is important to check to see if anyone else is doing what you plan to do. How are they doing it, what is good about it, what could you improve and if no one is doing what you plan to do, investigate why…
There is only going to be two possible outcomes:
- You have a new innovative idea, product or service to develop
- It has been tried, tested and failed
Competitor analysis should form a part of your market research. Evaluate your rivals within the market and consider where you position your business in your market.
“HubSpot has created a fantastic How to Do Market Research Guide. Add this guide to your reading material.”
You can develop brand advocates by letting people interact with your brand, product or service. Make it visible, let people react and see what their take on your idea is. Take the positives and negatives and consider anything you may have missed.
Creating advocates is crucial in the early business life cycles. If you listen to the feedback and more importantly act on it, you increase the opportunities to develop genuine advocates for your business.
An interesting early approach to take is via “The Lean Startup” approach. Essentially this concept looks at how today’s entrepreneurs use continuous innovation to create radically successful businesses.
“Eric Ries’s book, The Lean Startup is a fantastic place to start your journey.”
Eric suggests that by using the three basic principles of Prototyping, Experimenting and Pivoting you can constantly improve your brand position and market share through releasing a product, getting/acting on feedback, adapting before releasing a product and starting the cycle again.
How you handle feedback is also important. Below are 6 steps to manage feedback:
- Consider your feedback before you react. Whether the feedback is positive or negative your going to be keen to respond. Slow down and take the time to consider what has been said and how you respond.
- Try and start off your response with “thank you”, whether responding to positive or negative review.
- If someone comments in a way that suggests they do not like the idea, take the feedback as constructive. A smaller issue may be discovered that can be focused on improving your proposition.
- If the same comments are being repeated by multiple people it is time to sit up and take notice. Actioning on patterns is important.
- Let the customer remain in control and enter into a conversation demonstrating curiosity.
- Do not be afraid to ask questions. Understand why your proposition was liked or dis-liked and from there consider how you can make your proposition a better solution.
There is a very useful technique you can utilise when starting a new business and receiving mixed feedback. Develop a “wall of love’.
Your wall of love will showcase all the positive feedback and comments you have received. The wall of love will inspire you, keep reminding you why you started the business and can be used as a great tool for selling your products and services.
Make Your Business Official
Do not waste time, get your business officially registered and secured. The last thing you want is to wake up one only to find someone else has taken your big idea or started a similar business with the same name, ideas etc.
Some of the first things you need to set up include:
> Confirm Business Structure (PLC, Ltd, Sole Trader etc)
> Secure Business Name
> Purchase Domain Name(s) (always best to purchase all variants .com, .com.au, .net etc)
> Legally Register your Business
> Setup Required Licenses
> Apply for Trademarks, Copyrights or Patents
> Setup Business Bank Account
> Engage an Accountant & Lawyer
It is always best practice to engage with a professional business lawyer and accountant, although some of the things you can do yourself such as purchasing your domains.
Develop Your Business Plan
Your business plan will become your business bible, especially in the early stages of your business. Your business plan will outline how you plan to evolve your business from the business launch stage to later stages or final exit plans. It is the blueprint of your idea, strategy, finances, management and steps through the business lifecycle.
Tim Berry, former CEO & Founder of Palo Alto Software and highly regarded angel investor write this summary of a business plan:
“You can probably cover everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, management resumes and other details. If you’ve got a plan that’s more than 40 pages long, you’re probably not summarizing very well.”
There are many fantastic business plan templates available online, below are some you can use for free:
Generally there are 7 segments within a Business Plan. Below is my suggestion of how to structure your business plan:
- Title: Simply start with a name for your business. Sometimes this can be harder than it sounds. There are some useful tools online which can help generate business name ideas such as Namelix.
- Executive Summary: The executive summary is a high level description outlining the what the plan includes, the solutions you are providing, problems the business is solving and why the business is being created.
- Business Description: Describe the business you will be starting. Describe the current industry, market situation and how your business and the market will evolve over time.
- Marketing Strategies: Who is your target market? How are you going to reach them? What channels will you utilise? How will you use search, social, paid, content, web to build your brand and attract your target audience to your product or services?
- Competitor Analysis: Who are you main competitors? What do they do well? What are their weaknesses? How do you plan to beat them?
- Design & Development: What are your products and services? How do you plan to develop them? What are the cost implications?
- Operations & Management: What are the daily management functions of the business?
- Finances: What capital is available? What are your startup costs? What are your month to month projections? What does your full year revenue and costs projections look like?
Try and keep the content for each section to between 1 and 3 pages.
Securing Finance For Your Business
These days there are many ways to secure the resources you need to start a business.
Here are my 10 Best Ways to Fund Your Business:
- Bank Loan or Credit-Card
With most startups this is going to be difficult but it is still worth presenting your business plan. If you have excellent credit history or existing assets you will find banks more willing to invest.
2. Trade Equity or Services
This can be a useful tool. In 2008 I built a new business in Manila, Philippines. Cash was tight so in an effort to reduce initial costs I offered my services in exchange for services back. The first 6 months office rent was not paid in cash but paid in delivering digital marketing services to serviced office provider. You can also approach lawyers and accountants and exchange equity for legal or accounting services.
3. Advance from Strategic Partner/Customer
Securing royalty payments in advance is a proven tactic. Many companies us licensing and white-labelling to build their brand, especially organisations utilising a Saas model.
4. Startup Incubator
Organisations such as Y Combinator are becoming very popular. Most provide initial free services such as office facilities, support and consultation.
5. Venture Capital Investment
These are professional investment specialists. They invest institutional money on startup businesses, in most cases businesses that have a proven business model that is ready to scale. Typically these investors look for larger investment opportunities.
6. Local Angel Investor
Most metropolitan areas will have local angel investor groups such as Suncoast Angels who support business across the Sunshine Coast. You can use online platforms such as Gust to find local angel investors.
Websites such as Kickstarter allow people to make pledges to your business startup.
8. Small Business Grant
The government, in most countries will have a range of business grants available to support new business startups. In Australia for example, there are dozens of different grants available through their Grants and Programs page.
9. Friends & Family
Demonstrating commitment from friends and family can actually help improve securing investment from an angel investor. The way they see it is, if your friends and family don’t believe in you, why should an angel.
10. Self Funding
There is no shortcut here. Save a percentage of your salary for a period of time until you have the startup funds you need. If it is going to take you 12 months to achieve this, there is a lot that can be done during those 12 months. Build up a backlog of content so you are ready to build your PR network on launch. Secure your domains and put up a Coming Soon page so your domain develops authority.
These are the fundamental early steps to consider when developing your startup business idea. You do not need a fancy ivy-league type education or a million bucks in the bank to build a successful business or indeed become the next Mark Zuckerberg. But you do need a clear path to success. You do need to open doors, create connections, build relationships and secure your business financially.
The steps discussed in this article will help you achieve that.
In 2020 I will launch my next generation digital business: Fuell.
Fuell will give people the opportunity to start eCommerce businesses with very little startup cash required. Fully developed, ready to go businesses right off the shelf, supported by a world class digital and business consultancy team.
Keep your eye out for Fuell.com.au and Fuell.agency.
If you have any questions do not hesitate to reach out to me or the team at Fuell or Optima.
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