The ultimate guide on how to build a startup from scratch: Successful CEOs and entrepreneurs share their best business advice
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You have a startup business idea that you want to pursue and you’re ready to take it to the next level? You came to the right place! When you start an online business, there are hundreds of questions that need answering. How much money do you really need to start a business? How do you register it with the government? How do you build a website? Who’s your target customer, and what tactics and messaging should you use to reach them? In this blog post, we will talk about how to build a startup business from scratch and you will gain a deep understanding of the role of business development at a startup. Here is our ultimate guide on how to build a startup business from scratch and a collection of tips that we got from our AMA hosts. In order to help you maximize your goal setting process and guide you as you achieve your business goals, let’s start!
Breaking Down the Process of Refining Ideas
Before you jump into implementation, it is important to understand the essence of your idea. Today we see many young and dynamic people want to quit 9 to 5 job and start their own business, but a majority of them are running out of the viable business idea. If you’re thinking about starting a business, you likely already have an idea of what you want to sell, or at least the market you want to enter.
Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing, and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, but faster and cheaper), you’ve got a solid idea and are ready to create a business plan. Examine what you like and dislike about your work life as well as what traits people like and dislike about you. Finally, ask yourself why you’re seeking to start a business in the first place. This will help you to define your idea in the right direction.
Studying the current trends will reveal issues that the consumer is facing. Seeing the problems for consumers is part of knowing what ideas are viable. An idea is really meant to solve a problem for a consumer. By studying why people make purchases, the innovator will understand what the problems are and until the problems are understood, the ideas will not be on target. The team often begins with a problem. Their ideas follow possible solutions. It doesn’t matter if it is a service or a concrete product, the solution has to fit the problem. The need of the consumer should drive the idea process.
Write a business plan
Whether you’re starting or growing your business, you need a business plan. Your plan will provide the roadmap to achieve the success you want. The question shouldn’t be IF you write your plan, but how to write a business plan that will take your company where you want to go.
A formal business plan adheres to the traditional business plan outline and typically requires a more substantial financial section.
An informal business plan is usually for internal purposes and does not need to follow the traditional business outline as stringently. Touch on all the sections in the business plan outline, but especially focus on the marketing analysis, SWOT analysis, and marketing plan section.
What you should include in your business plan may vary somewhat, based on the type of business you’re operating and the purpose of the plan itself. While general guidelines are available, if the plan is being written primarily to secure outside funding, such as a small business loan, it’s not a bad idea to see in advance if the financial institution has any specific requirements it likes to see in its loan applications and business plans.
Why you need to write a business plan:
- The competitive research you do will force you to come up with new and creative ways to outgrow everyone else
- Seeing the big picture will let you see the holes in your thinking early on
- You will become intimately acquainted with your customer
- Brings everyone on the team together to synthesize a unified vision
- It is a prerequisite in most cases to apply for funding
Analyse your finances
Starting any business has a price, so you need to determine how you’re going to cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you’re planning to leave your current job to focus on your business, do you have some money put away to support yourself until you start making a profit?
The Instant Solutions — Digital Marketing, Youtube Marketing, SEO Services Providing Company
Cashflow problems and mismanaged finances are major causes of business failure in the early years. Some companies fail to plan properly, some set their sights too high or low, some don’t keep track of costs, some fail to chase payment. You can maximize your chances of business success by being aware of the pitfalls. Then you can manage your company’s finances carefully and keep a close eye on its cashflow. It’s easy to focus only on the day-to-day running of your business, especially in the early stages. But once you’re up and running, it can pay dividends to think about longer-term and more strategic planning.
One of the best ways to get a good idea of where you stand (in just about anything) is to run a SWOT Analysis. A SWOT Analysis is a strategic management tool that is often used in business to analyze a company, process, system, business opportunity, etc.But a SWOT Analysis can help you analyze other situations as well, including your financial situation, career, and more.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and running a basic SWOT Analysis is a good way to understand your current situation and help you create a plan that will account for weaknesses and threats and enable you to leverage your strengths and opportunities to help you reach your goals.
Startups requiring a lot more funding up front may want to consider an investor. Investors usually provide several million dollars or more to a fledgling company, with the expectation that the backers will have a hands-on role in running your business. Alternatively, you could launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers.
Determine the best legal structure for your business
Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company. Before you can register your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong. Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money.
The most common forms of business are:
- sole proprietorship — an unincorporated business owned by one individual, making it the simplest form of business to start and operate
- partnership — a legal form of business operation between two or more individuals who share management and profits
- corporation — an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital
- S corporation — a business structure suited to small business owners who want the continuity and liability protection of a corporation but wish to be taxed as a sole proprietorship or partnership
Even after you settle on a business structure, remember that the circumstances that make one type of business organization favorable are always subject to changes in the laws. It makes sense to reassess your form of business from time to time to make sure you are using the one that provides the most benefits.
Analyze Your Competition
Every business has competition. Understanding the strengths and weaknesses of your competition — or potential competition — is critical to making sure your business survives and grows. While you don’t need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you only plan to run a small business. In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.
Competitive analysis can be incredibly complicated and time-consuming… but it doesn’t have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.
Nellie Akalp — CEO & Co-Founder of CorpNet.com
- What are their strengths? Price, service, convenience, extensive inventory are all areas where you may be vulnerable.
- What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of.
- What are their basic objectives? Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve?
- What marketing strategies do they use? Look at their advertising, public relations, etc.
- How can you take market share away from their business?
- How will they respond when you enter the market?
Build your team
Unless you’re planning to be your only employee, you’re going to need to hire a great team to get your company off the ground. A business-focused manager restructures the team according to business needs and doesn’t focus as much attention on the career growth and specific skill sets of the individuals. They don’t worry about what perception the individuals will have of them by making these changes. These managers make changes to improve the business without thinking through the details around how to roll out these changes to the people.
Andrew Simpson — CEO of Someonew
Focus on roles
A thorough selection process for picking your team members has greater long-term benefits, even if this means you spend more time recruiting than you’d like to. Hiring someone just to have bodies in the room can harm your team.
Value each role
With each team member bringing something special to the table, treating each role as an essential part of your operation is also crucial. Each team member should feel like their job matters.When employees feel that their role is undervalued or perhaps unnecessary, it can become easy to check out mentally as work becomes mechanical and something they completely detach from as soon as the day is over.
Communicate
The best way to demonstrate value between team members is through communication. It’s difficult to feel like you are part of a team when everybody has information that hasn’t been shared with you yet or when team members don’t fill each other in on what they’re working on. Keep a level of transparency whenever possible with all team members, even if the information doesn’t directly pertain to every person on your team.
Choose your vendors
Other times you need to go through a formal selection process. The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start.
Selecting the right suppliers for your business needs is vital to ensure that you are able to deliver your products and services on time, at the right price, and in compliance with your quality standards. By implementing specific supplier’s selection criteria, it’s possible to identify companies that will work with you to meet the demands of your customers.
If you are in a new business, a key consideration for choosing suppliers is affordability. If you are focused on managing your finances, competitively priced suppliers are an attractive option.
However, cheap does not always represent the best value for money. If the quality of your supplier’s product or service is poor, you may incur extra costs for returns and replacements, and risk losing business with any delays that result. If you decide to pass poor quality on to your customers, you risk damaging your business reputation.
Large suppliers are generally reliable because they have enough resources and systems in place to make sure they can still deliver if anything goes wrong. However, you can often develop a closer relationship with small suppliers — especially if you are their main customer. In these cases, your supplier may also respond better to different requests, such as rush orders or holding on to stock. Look for experienced suppliers who have been in business a long time. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item you need for your business.
Also, don’t forget about location when choosing suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. If you need something quickly, a local supplier might be a better option. But be sure to investigate freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs.
Brand yourself and advertise
Before you start selling your product or service, you need to build up your brand and get a following of people ready to jump when you open your literal or figurative doors for business.
A successful brand has to be consistent in communication and experience, across many applications:
- Environment (storefront or office)
- Print, signage, packaging
- Website & online advertising
- Social media & content marketing
- Sales & customer service
Create a logo that can help people easily identify your brand, and be consistent in using it across all of your platforms, including your all-important company website. Use social media to spread the word about your new business, perhaps as a promotional tool to offer coupons and discounts to followers once you launch. Be sure to also keep these digital assets up to date with relevant, interesting content about your business and industry.
Umeh Augustine — Digital Media Publicist, strategist and Writer.
Social media is a powerful tool to promote your business to potential customers and gain valuable insight through ‘social listening’. Through social listening, you can find out what customers are saying about you, gain insight into their behavior, identify keywords and trends that appeal to your target market and so improve your customer service. Social media can help you to build your business profile and attract new customers.
Grow your business
Learning how to grow your business isn’t just a worthy goal; growing your business is often a necessity for your business’s survival and your economic well-being. What can you do to get your business beyond the bare sustenance level? What can you do to turn it into the income-generating powerhouse you envision? Try one or more of these growth strategies. All have been successfully used by other businesses and, with some planning and investment, will work for you.
Joe Sinkwitz — CEO of Intellifluence, 20+ years in SEO
Get to know your customers
Understand your customer’s needs and develop products and services that meet those needs. You can gain insight into your customers by personalizing your services and encouraging them to provide you with feedback.
Stan Peake — Business Breakthrough Coach and Speaker
Offer great customer service
Ensure your customer service is exceptional and go the extra mile when you can. Your customers will not only remember great service they will also be more likely to refer other people to you.
Nurture existing customers and look for new opportunities
Have strategies in place to nurture existing customers, such as staying in contact with them via an e-newsletter or letting them know about promotional events ahead of time. At the same time, look for opportunities to get more work and build your customer base. Make sure that you find the right balance between nurturing customers and finding new ones.
Host events
Hosting your own event can be a great way to get to know your customers and build relationships. Invite some of your best existing customers and encourage them to bring their friends.
Measure what works and refine your approach as you go
You should monitor where your customers are coming from in order to measure whether your marketing activities are successful or not. Don’t be afraid to experiment. Refine your approach if something is not working and focus more time on the activities that achieve the best results.
Celebrate successes and failures!
Celebrating your successes and milestones also brings your team together and allows everyone to see that when they work together, great things can happen. If someone does a great job at something, give them a shout-out in front of the rest of the team so that every effort is seen and appreciated. This also helps each person to feel visible and that what they’re doing has an impact. In contrast, if your team fails at something, come together to redirect your efforts or turn it into something positive. Don’t throw anyone under the bus or turn a damage-control discussion into a blame game. This never helps anybody. Instead, give your team equal responsibility to put your heads together and figure out the next steps or pivots.
Written by our genius blogger Tina based on advice from our great Hosts in www.CEOAMA.com and originally published on www.AMAfeed.com
