How To Start a Business: A Startup Guide for Entrepreneurs
According to Statista, there are about 334 million businesses worldwide. There are businesses in real estate, tourism, hospitality, and other giant industries that make the world go round.
According to Statista, there are about 334 million businesses worldwide. There are businesses in real estate, tourism, hospitality, and other giant industries that make the world go round. Wherever you look, you'll find a company that serves a particular purpose!
If you’re an aspiring entrepreneur, starting your own business can be one of the most rewarding experiences of your life. It might have been your dream since childhood or just a new idea you want to bring to life. Either way, starting a business is an incredibly exciting prospect.
Generally, starting a business entails countless emotions, responsibilities, and processes. It's not a walk in the park and requires dedication, commitment, and hard work.
Those who have tried to do so and failed know this all too well. But make no mistake; starting a startup business is not impossible!
When you already have the passion and idea, what you need next is a guide that will provide you with actionable steps. Whether you're a struggling entrepreneur or a blossoming one, here are some ideas to help you in your startup journey:
Job or Business: Which One Should You Have?
Two of life's most popular career paths are having a job or owning a business. If you're like most people who were conditioned to do well in school so they can get a job, the idea of starting a business may seem daunting. It's true; business is not for everyone. But at the same time, employment isn't either.
Both options have their unique advantages and disadvantages. On the one hand, having a job allows you to receive a steady income and have someone else take care of the big decisions.
You could be a nine-to-five employee with a limited salary and all the benefits that come along with it. But you could also be a freelancer working remotely with flexible hours. Generally, it's less risky than starting a business.
On the other hand, owning a business opens up immense possibilities and opportunities. It has higher risks but allows you to control the process and profits.
You can work hard and get business rewards that will outshine your job income. You become your own boss and have the kind of freedom that employees don't.
Whether or not you should start a business depends on your lifestyle, personality, and financial situation. Evaluate which option works best for you before taking the plunge.
Pros of Having a Business
Starting a business is not for everyone, but those who do the job right can reap amazing rewards. Here are some of the most notable ones:
One of the most significant benefits of owning a business is that you don't have to rely on someone else for a regular income. As long as your startup is successful, you'll have a steady source of income that will keep increasing with time.
You can plan your working hours at your convenience, depending on the nature of your startup. There's no rigid nine-to-five schedule that you have to adhere to.
With a startup business, you have endless opportunities to grow, learn, and expand your skill set. You will be able to create a work environment where you can innovate and make all the decisions.
Owning a business is not only financially rewarding but will also give you immense personal satisfaction. You will be proud of the startup you built from scratch and all the hard work that went into it.
Lastly, having a startup can positively impact your community, as you'll be able to create jobs and help the local economy.
Risks of Being an Entrepreneur
If starting a business didn't come with risks and hardships, everyone would be doing it! Here are some of the risks of having a startup business:
One of the biggest cons of being an entrepreneur is that it requires time, effort, and patience. You must be dedicated and motivated to keep up with the startup business.
Starting a business comes with financial risks, as there is no guarantee of success or profits. You must make wise financial decisions and be prepared for the worst-case scenario.
Running a startup is an emotional rollercoaster. You will have to face tremendous stress, especially in the startup phase. There are also times when you have to make difficult decisions that can affect the future of your startup.
Becoming an entrepreneur and starting your own business is a decision that you have to take after carefully evaluating your options. It's an immense responsibility, but it also has the potential to reward you with financial independence, satisfaction, and growth opportunities.
If you've weighed the pros and cons and are still interested in becoming an entrepreneur, there are many ways to get started.
Be Committed to Entrepreneurship
You always have to start with yourself. Before going all in, assess your mindset and make sure you're ready to commit to running a startup. Are you prepared to face any challenge that might come your way? Are you really an entrepreneur, or are you meant for other career paths?
It's important to understand that if you just aren't built to be an entrepreneur, that's okay. There are other paths you can take to achieve financial success and growth. And if you have what it takes to start a business, equip yourself with the right knowledge and resources to ensure you're ready for anything.
Here are some of the challenges that entrepreneurs typically face:
- Finding a suitable business model
- Financial planning
- Understanding the legal requirements
- Building a team
- Marketing and advertising
- Dealing with customer service
- Keeping up with the competition
There's a solution to every problem, but you must be capable of creating them. You must be willing to invest the time and effort needed to make your startup successful. Entrepreneurship isn't for the faint of heart, so before you start, be 100% sure you have the guts to go through with it.
Have a Business Idea
A business idea is an opportunity with a plan, meaning it should have profit potential and be something you're passionate about. It could be your stitching hobby, mathematical skills, love for cooking, or any side hustle you want to become a primary income source.
Brainstorming is a vital part of this process, as it will help you find ideas that fit your skills and interests. When brainstorming, don't be afraid to think outside the box. Be as creative as you want!
Since a business idea should be more than just an idea, do your market research to ensure that your vision is valid and profitable. Find out whether there is a demand for the product or service you plan to offer. If there are existing businesses in the same field, assess their strengths and weaknesses to create a better offer.
A business idea is crucial because this will be your startup's foundation. It's impossible to start a business without a purpose or goal. Your startup business must serve a need and provide value to you and your customers.
If you're unsure how to start with this step, here are guide questions to help you decide:
- What problem can I solve?
- Who are my target customers?
- What value can I bring to the market?
- Am I passionate about my idea?
- Do I have the skills and resources needed to start this business?
Feel free to ask any questions to help you make an informed decision. Once you have a business idea that resonates with your skills and interests, it's time to move on to the next step.
Build a Great Product or Service
A startup business isn't just about having an innovative concept, it's about creating value that customers will appreciate and use.
If you're planning to sell products, start small by developing the core features, then work on expanding them further. For example, if you're selling software, create a beta version that contains the essential elements and then work on creating an extended version.
If you're offering services, ensure you know exactly what your customers will get and what you can give them. Think of unique features that enhance the value of your service and how you can stand out from competitors.
Keep your startup's core values in mind when making decisions. You don't have to create the perfect product or service right away. However, you must continuously strive to improve your startup's product or service and ensure it meets customers' expectations.
A good tip would be to build a product or service that you yourself would use. If you don't find value in it, chances are your customers won't either. Think about things you're passionate about, and come up with startup ideas to solve a problem you or your target customers face daily.
Be Clear With Your Co-Founders
It's possible to start a business independently, but it's not ideal. Your startup will benefit from having co-founders as long as you're all on the same page.
It greatly depends on your startup business. If your plans are feasible on your own, then you don't need to bring any co-founders on board. But if you need help, you must choose the right people.
Working with partners has many benefits, but it also comes with its own set of challenges. Some of the advantages include the following:
Having Different Perspectives
You and your co-founders will have different perspectives that you can use to create something innovative.
Partners can provide financial support, access to industry contacts, and resources you may not be able to acquire independently.
Pooling of Skills and Talent
Each partner can bring a specific skill set to the startup, for example, marketing, software development, and finance.
Having more than one decision-maker will make startup tasks easier to accomplish. It's imperative when it comes to making big decisions that affect the future of your startup.
Lastly, you and your partners will be jointly responsible for the startup's successes and failures. This can act as a motivator to keep each other on track.
On the other hand, there can be miscommunication, disagreements, and a lack of trust. Before you bring anyone on board, ensure that you establish the startup's goals, roles and responsibilities, the process of communication, and legal agreements.
Once you have everything sorted out, make sure to document it in writing to avoid any confusion in the future. Having a team makes startup success more achievable, but it takes a lot of effort, professionalism, and planning to get it right.
Craft a Business Plan
Your startup business plan is the blueprint for your startup's journey. It contains your startup's vision, goals, strategy, and measures of success. Your startup business plan should include the following:
- Business profile: A brief overview of your startup's purpose, product, or service.
- Market analysis: An evaluation of the industry and competitors.
- Marketing plan: How you will reach your target audience and get customers.
- Financial projections: An estimation of startup costs and future revenue.
- Operational plan: Description of the startup's daily operations.
Your startup business plan will take time to perfect. You'll need to adjust it over time as you learn more about your startup's needs and the current market conditions
Secure Your Capital
Starting a business without money is almost impossible. You'll have to cover many expenses, such as legal fees, labour, and supplies. Before you can do anything without your startup, you'll need to secure your capital.
Funding can come from various sources, such as venture capitalists, angel investors, bank loans, or your own savings. Research each option and decide which one is best for your startup business.
Here are some forms of startup capital you can consider:
- Microlenders: Short-term loans with small amounts and quick turnaround times.
- Friends and family: Supportive family and friends can help fund your startup.
- Personal business loans: Bank loans or online lenders can help startup founders with good credit scores.
- Venture capital: Financial and non-financial support from investors who see potential in startup founders.
- Small-business grants: Local and federal government grants that provide startup funding.
- Crowdfunding: Platforms that allow startup founders to raise capital from the public.
Consider the costs you'll need to cover, such as rent or purchasing a workspace, equipment, technology, marketing, and staffing. A startup business plan will help you estimate the startup costs more accurately.
Insure Your Business
Insurance isn't always one of the startup costs you consider, but having a plan in place is an excellent idea. Insurance will cover unexpected risks, such as damage to your startup's property and liability lawsuits.
There are many types of insurance, including the following:
- Workers' Compensation Insurance
- Unemployment Insurance
- Disability Insurance
- Commercial Property Insurance
- General Liability Insurance
- Professional Liability Insurance
- Business Interruption Insurance
- Key Person Insurance
- Cyber Liability Insurance
- Business Owner's Policy
"Why should I insure my business? It hasn't even started yet." Insurance is not only for established businesses. It's also for entrepreneurs planning to start a new business who don't know what risks they may face.
Getting startup insurance gives you the peace of mind to move forward with launching your startup business. In business, always think the unexpected can happen, and it's better to be ready than sorry.
Choose Your Business Name
Take a break from the serious startup stuff and have fun picking a startup name! Your startup business's name is one of the first things people will notice, so you want it to be memorable and unique.
Think of startup names that best describe your purpose, product, or service. It should also reflect the startup culture and image you want to cultivate. Here are some tips for startup naming:
- Avoid using generic words that won't stand out.
- Consider the startup's mission and values.
- Choose a startup name that's easy to pronounce and spell.
- Make sure the startup name is available as a domain name.
- Ask yourself: Does the startup name evoke emotion?
You can decide on your business name with your partners or work on it yourself. Either way, spend some time brainstorming startup names and be open to possibilities.
Once you have a startup name that fits your startup's purpose and culture, create a logo design. Get creative with it and choose a logo design that will stand out and make your startup look professional.
When working on your logo design, balance form and function. Make sure your startup logo is eye-catching and speaks to the startup's mission and values. However, don't compromise the startup's message for a trendy logo design.
If you don't have an eye for design, hire an experienced designer to create a startup logo that your customers will remember. It might take some time, but it'll be worth the effort.
Besides the business name and logo, take time to finalize other identifying elements of your startup, such as the startup's tagline and colour palette. Completing these elements will help build a consistent startup brand that customers can recognize and trust.
Choose a Business Structure
As you get closer to launching your startup business, the next step is deciding on a business structure. The type of startup business structure you choose will determine many aspects of the startup, from taxes and startup costs to startup liabilities.
There are four common startup business structures:
1. Sole Proprietorships
A sole proprietorship is the most basic startup business structure. It's a form of ownership in which you are solely responsible for all aspects of the startup, including startup costs, taxes, and liabilities.
Partnerships are startup business structures in which two or more individuals, or entities, are responsible for startup costs and liabilities. Partners may also be liable for each other's debts depending on the chosen startup structure.
Corporations are startup business structures in which the startup is treated as a separate legal entity from its owners. A startup business organized as a corporation is typically owned by shareholders with voting rights and may be held liable for startup costs and liabilities.
4. Limited Liability Companies (LLCs) or in Australia (Pty Ltd)
An LLC is a startup business structure in which startup costs and liabilities are held by the startup business itself rather than its owners. LLCs are popular startup structures as they provide startup business owners with liability protection and limited startup costs.
The business structure best for you depends on the startup's goals and size. When deciding on a startup business structure, consider speaking to an attorney or an experienced accountant. They can help you navigate startup regulations, taxes, and liabilities better than you can on your own.
Find a Business Location
If you're starting an online startup business, you won't need to worry about a physical location. However, you'll need to determine the location for brick-and-mortar startup businesses.
When choosing startup locations, think about the target audience and which areas have a higher concentration of them. Look for startup locations with high traffic, accessible public transportation, and plenty of parking.
If your startup business is in retail, consider startup locations with high foot traffic from potential customers. If it's an office, consider areas with plenty of amenities and easy access to mass transportation.
Research startup costs and regulations before signing a lease when selecting startup locations. The location should also have enough space for the startup's current needs and potential startup growth.
Keep in mind that your business location will be your business' home. Choose startup locations carefully because it'll be where you, your employees, and your customers will grow.
Plan Workload and Team Size
Before you launch your startup business, plan out the startup's workload and team size. As a startup founder, it's essential to understand which tasks must be done and which can be delegated.
Plan the startup's initial workflow, including meetings, task assignments, deadlines, and progress. Ensure each startup task has a clear goal and is assigned to the right person.
Once you have a plan, consider which startup roles will need to be filled. Think about startup employees, contractors, and other team members who can help make the startup successful.
Keep growth in mind when making startup plans. As your business grows, so will its workload and team size.
Register Your Business
Now that you've finalized your startup plans, it's time to register your business. You may think you can skip this step and just start operating, but ensuring your startup is officially registered with the proper governing bodies is essential. Registration may vary depending on what type of business you're opening, but generally, here are reasons to register your startup:
Taxes and Liability
When you register your startup, you open the door to benefits like tax deductions and credits. Additionally, registering your business will protect your personal assets from liability and debt incurred by your startup.
Business Bank Accounts
Registering your startup will also open the door to business banking. It's often necessary to ensure that your startup's money is kept separate from your personal funds. Business banking accounts can also make it easier to apply for startup loans and grants or credit cards if necessary.
Loans and Grants
Registering your startup with the right government bodies may make applying for startup loans and grants easier. Many startup loan programs require you to register your startup before applying.
Suppliers, customers, and other partners may require that you're officially registered. This is especially true for startup angel investors or venture capitalists who might invest in your startup.
You can only officially hire employees if your startup is registered. This means you can offer your team benefits and tax deductions and help them comply with the law.
Registration also helps your startup's reputation. Customers often feel more secure when dealing with a legitimate startup rather than an informal business.
Besides registration, you must also be on top of other legal requirements. Regulations can vary greatly depending on the type of startup you're launching, so take the time to review your startup's requirements. It's best to consult a lawyer and tax advisor to find out what you need.
Set Up Excellent Accounting and Bookkeeping Systems
You need excellent accounting and bookkeeping systems to run a successful startup business. The system includes tracking startup costs and expenses, which will be your primary source of budget information. With an efficient accounting and bookkeeping system, you'll be able to:
- Save time and money
- Increase financial visibility
- Minimize errors
- Improve asset and inventory management
- Access real-time data
- Improve the decision-making process
An excellent system will also be flexible enough to adjust as your startup grows. Money is a big part of any startup, so getting your financial systems in order is crucial. Investing in accounting and bookkeeping software can help you manage your startup's finances easily.
Hire the Right People
Having efficient systems in place will help you succeed in the startup business, but hiring competent individuals is just as important. The people you hire will shape your startup, and having the right people on board can make a massive difference in the long run.
When choosing team members, look for individuals who have the relevant skills, experience, and passion. It would be best to consider whether they fit the startup's culture well. It's crucial to look at their qualifications, but remember to factor in their personality and dedication.
One important tip is to never rush the hiring process. It's better to take your time and find the right person than to hire someone who isn't a good fit for the startup. Think of your startup purpose and see who can best align with it.
You should also create a startup team structure that prioritizes collaboration and communication. It’ll ensure that everyone is on the same page and can effectively work together to achieve success. Of course, not everyone will have the same roles, responsibilities, and characters, but everyone should be willing to work together.
Focus On Your Contracts
Many startups need to pay more attention to the importance of contracts and other legal documents. However, it's crucial to ensure that you and your startup are protected from potential harm or disputes.
Having a lawyer or other legal professional on retainer is a great way to ensure startup contracts are in order. They can help with everything from getting the correct paperwork to negotiating contracts with clients and vendors.
Having substantial contracts also builds trust among partners and investors. They'll know that you run your startup correctly and will be more likely to invest in it.
Your employees must also understand their contracts and the startup's policies. Having this knowledge prevents misunderstandings and keeps everyone accountable.
Finally, remember that contracts can continuously be revised and updated as your startup grows. Review them regularly and adjust them according to your startup's needs.
Protect Your Intellectual Property (IP)
Intellectual property (IP) is the foundation of many startup businesses. You must take steps to protect it, or you risk having your startup's ideas and creations stolen or copied. Here are some types of IP protections you can look into:
- Copyright Protection: Protection of original works of authorship, such as writing, music, and software. It prevents others from using or copying your startup's creations without permission.
- Trademark Protection: Protection of words, symbols, logos, and other marks that identify your startup as the source of goods and services. Trademarks prevent others from using your startup's name or branding without permission.
- Patent Protection: Protection of inventions, processes, and other technologies. It prevents others from using or selling your creations without permission.
- Service Marks Protection: Protection of words, symbols, logos, and other marks that identify your startup's services.
- Trade Secrets Protection: Protection of confidential commercial information. It prevents others from using or disclosing your secrets without permission.
- Confidentiality Agreements: Agreements between startups, third parties, employees, and consultants to protect your startup's information from unauthorized disclosure.
Never skip confidentiality and invention assignment agreements. Startups should have these to protect ideas and information. All employees, contractors, and partners should sign this document.
These agreements ensure that all information shared within the startup is confidential and that any invention or idea developed by someone working with the startup belongs to the startup. This way, everyone is held accountable for their work and credited.
Market Your Business
Once your startup is set up and ready to go, it's time to turn your attention to marketing.
You will need a well-thought-out marketing strategy to build awareness of your startup and grow its customer base. Social media is a great way to get started since it's free and provides a platform to reach your target market and potential partners.
You can also consider advertising on websites or through search engine marketing (SEM) to reach a broader audience. Additionally, build relationships with influencers and other businesses that can help spread the word about your startup.
Finally, consider creating a website and optimizing it for search engines (SEO) to ensure people can find your startup easily online. Publish engaging content, use keywords strategically, and follow SEO best practices to boost your startup's visibility.
"Why should I focus on marketing?" You can create a social media page and post whenever you want, but that will only do a little for your startup. Here are some of the advantages you can gain from investing in effective marketing:
Build Brand Awareness
Marketing can help your startup gain visibility, recognition, and credibility in the eyes of potential customers. It can be beneficial for both short-term and long-term success.
Increase Website Traffic
Excellent marketing can help your startup bring in more website visitors. Your website is your startup's home base and the foundation for your online presence, meaning it's where your potential customers will get to know you.
Generate Qualified Leads
The right marketing activities can help your startup generate leads or people interested in learning more and potentially signing up for one of your startup's products or services.
Marketing can help your startup reach more people and convert prospects into customers, ultimately leading to increased sales.
It's important to keep customers engaged and loyal to your business. Marketing can help you do this by providing useful content, updates, offers, and more.
Sometimes, marketing doesn't get the attention it deserves, but a startup can only get off the ground with it. Understandably, the budget may be tight, but allocating resources for effective marketing is a must.
When creating marketing materials, always keep the startup's brand in mind. Include the fonts, colors, and messaging across all channels, including website, social media, email campaigns, and more.
Marketing is a different ballgame and requires strong planning, strategy, and execution. You'll need a whole team of experts who can navigate the startup's marketing, from product promotion and public relations to market research and more.
Work With Consultants and Freelancers
70% of small and medium-sized businesses in the U.S. have worked with freelancers, and 83% agree they're a great help. Furthermore, there are more than 55,000 business consultants in the country. These numbers show that hiring consultants and freelancers to support your employees is ideal for startup owners.
Working with consultants and freelancers is beneficial in many ways. On the one hand, consultants can provide you with expertise, objectivity, and customization. Consultants also help businesses save money and time and provide access to resources and people experts in their fields.
On the other hand, freelancers can help startups get their projects done quickly and affordably. They have unique skills and can help startup owners create content, manage campaigns, and more! Supplementing your internal team with external experts is a great way to ensure startup success.
Provide Exceptional Customer Service
Another thing a startup business should put focus on is customer service. Many startup owners may think that customer service isn't necessary as they don't have many customers yet. However, customer service is always crucial because it builds customer trust and loyalty.
Even before you get your startup off the ground, it's important to start building customer relationships. Answer customer questions, follow up after sales and purchases, listen to feedback, and provide service with a smile.
When customers have an issue, you should be able to resolve it quickly. You should also have an efficient system in place to track customer inquiries and respond promptly. When customers see that you're reliable, even as a new business, they'll be more likely to come back and recommend you to others.
Keep Growing as an Entrepreneur, Even After Launching
Lastly, after going through so many "Start New Business" steps, you should always go back to the first one. You are an entrepreneur, and you should never stop growing.
Stay ahead of trends, try new tactics, and listen to your customers. Networking will also take you to the next level, as talking to other startup owners and business leaders can help you gain more knowledge and resources.
Going through bumps and roadblocks will be expected, especially if it's your first time starting a business. But with the right mindset and resilience, you'll be able to navigate them successfully. Be open to asking for help from others, specifically from the experts who have been there.
Above all, remember that starting a business is a journey and not just a single step. There will be countless ups and downs, and you'll have to be patient and consistent. Entrepreneurship doesn't happen overnight!
Yes, that's a long list of startup steps. It's a whole journey that almost never stops once it's started. But if you take the time to prepare, understand your audience, and build a strong team of experts, you'll have the proper foundation to launch a successful startup business. The journey starts and ends with you as an entrepreneur!
The risks will always be there, and it's your call to take them. It's best to take steps slowly but surely, and have the right guide and attitude. It might feel like getting your startup off the ground takes too much time, but it's better than rushing and making mistakes.
So, with that said: go forth! You have a great shot at startup success.