Launching a business can bring a lot of rewards. You can make significant money if you play your cards right, and running a company is an exciting activity on its own. Note that most businesses fail, so you must adhere to some steps to increase your chances of success. This article will show you those steps.
1. Have A Good Idea
A good idea is the primary factor affecting the success of your company. What product is your company offering? Does it solve any problems for people? A good way to generate feasible ideas is to identify common problems around you and propose solutions.
No idea is too simple or complicated to generate revenue. It could be as simple as importing and selling fruits out of their season in your local area. You’re good to go as long as you’re offering a solution to an existing problem.
2. Perform Market Research
Don’t jump straight into your idea without carrying out deep market research. You have identified a solution to an existing problem. Fine, but what is the size of the market? What are the obstacles? Who are your biggest competitors and what advantage can you offer over them?
Market research will help you set sound revenue and profit targets for your new company. Things to do include
- Identify your ideal customer base
- Engage with your target market and see what complaints they have about existing solutions
- Study your competitors to identify their weaknesses and see where you can perform better
3. Write A Business Plan
You should create a formal business plan. This is doubly important if you need equity or debt financing from investors. Your plan should be simple so that anyone can easily understand the solution you’re proposing. Overtly complex plans can discourage investors from backing you or potential customers from working with you.
Your plan should include
- A title page and contents
- A statement of purpose summarizing your operations
- Details about every product you’re offering
- Analysis of your target market
- Analysis of competitors, highlighting their strengths and weaknesses
A business plan will make it easier to communicate with investors and win your first set of customers.
4. Register Your Company
With the above steps fulfilled, it’s time to make your company official by registering it with the government. People aren’t willing to interact with companies not formally registered by the government in case of disputes. Registering your company gives you legal backing and structure; people will be willing to sign contracts with you. Similarly, it enables investors to acquire shares in your company or loan you money if need be.
After registering your firm, you might also need to apply for licenses if you operate in regulated industries like law and medicine. The process can be hectic, but you can hire a business service provider like Osome to handle it and save you the stress.
5. Open A Business Bank Account
Opening a dedicated bank account for your business is advisable, as it makes it easier to manage finances. The advantages include
- It helps you keep track of your expenses, including those you can deduct from your tax liability.
- It enables you to access loans from your banking institution.
- It helps you separate business and personal finances, which is a condition for retaining limited liability protection.
6. Market and Build Your Business
At this point, you can start seeking for customers to work with. Your industry likely has many competitors, so you must market your company to stand out. You can do this via word of mouth, social media, search advertising, billboards, etc.
Summary Of How To Start A Business From Scratch
- Identify a good idea
- Carry out market and competitor research
- Create a formal business plan
- Incorporate the company
- Open a corporate bank account
- Market your firm and find customers to transact with