You’re sure you have a great idea that can turn into a profitable business if executed, right? We’ve all had one or two of those ideas, but where we differ from successful entrepreneurs in starting your own company is that they do everything right from the very start.
Doing your own business or building your idea to the business level isn’t an easy job requiring persistence. More than persistence, it requires you to execute certain steps diligently.
The prospect of building something from the ground up can be pretty daunting for anyone. In this scenario, having the right tools and a quick guide by your side can aid your process and help you achieve success quicker.
Our goal with this guide is to help introduce you to the tools and techniques that will help you set a strong foundation for your new business.
Fine Tune Your Idea
Sure, you have an idea, but just having a rough idea isn’t enough to get started. This is the very first step of making your own business successful in the long run.
Before you begin executing an idea, do some research. Look at what people with the same idea or in the same industry are doing.
Examine what the current brand and market leaders are doing and figure out how you can beat them and be better.
If your business has the edge over those already existing in the market, you’ve got an idea worth building on.
When building an idea, you should always focus on fulfilling a need in the market rather than looking at personal needs.
Lastly, you need to understand who your buyers and customers are. What are their needs and pains, and is your idea catering to any of these needs and pains or not?
Write a Solid Business Plan
Your business will only be as strong as its foundation. And your foundation includes asking yourself some crucial questions before starting your own company.
These questions will include points like what your business is, what mediums are you using to market, do you have the funds to start and sustain a business for a while?
All these questions need to be answered with facts and in detail. The compilation of all those answers is a solid business plan.
You can either hire a business plan writing firm or use an online tool to help with the draft.
A professional firm is better because they may show you certain aspects of the plan that may be overlooked altogether.
Research the Market
When formulating a business strategy, you must do your homework on the industry and target demographics. There will be surveys, focus groups, SEO research, and public data research involved.
You may learn a lot about your industry and your competitors, as well as your target customer’s needs, preferences, and behavior, by conducting market research. Gathering demographic data and conducting a competitive study might help you better grasp your market’s prospects and constraints.
These are the top companies because they have unique products or services that set them apart from their rivals. The competitive landscape and conveying distinctive value are impacted significantly by this move.
Look to the Future
Having an exit strategy should the business fail will help you have a forward-thinking approach and also be diligent in making decisions. This will allow you to see beyond the current excitement of launching your own business and really make intelligent decisions that will preserve finances.
Do a Financial Analysis
A significant part of owning your own business is making sure you have the funds to run it and sustain it. Every new company has certain expenses and costs, and let’s face it, your business won’t be profitable from the start.
It’s always best to overestimate the costs of running a business, so you don’t end up going out of business even before you make your first profit.
Conduct a Break-Even Analysis
A break-even analysis is one method of figuring out how much money you’ll need. An important part of financial planning is determining when a firm, product, or service will be financially profitable.
The equation is straightforward:
Break-Even Point = Fixed Costs / (Average Price – Variable Costs)
This formula is an essential tool for any entrepreneur, as it tells you the bare minimum performance your company must accomplish in order to avoid losing money.
In addition, it aids in the establishment of realistic production targets by allowing you to pinpoint where your revenues are coming from.
Break-even analysis is commonly used for the following three reasons:
Analyze the return on investment. Every business owner’s top priority is to make money.
Determine how much money you’ll need to meet all of your expenses. Which products and services are profitable, and which ones are losing money?
Product or service pricing. Price is often based on the production expenses of a product as well as the pricing strategies employed by the company’s competitors.
Find out how much it will cost in terms of both fixed and fluctuating prices. The price of any tangible goods is a question. Is there a price tag for labor?
The data has to be analyzed. How many products or services do you need to sell in order to make money? What can I do to lower my overall fixed expenses? What can I do to reduce the unit cost of production? What can I do to increase sales?
Keep a Close Eye on Your Expenses
When starting a business, don’t spend too much money. Spend wisely and avoid squandering money on unnecessary purchases that won’t help you achieve your business objectives.
Keep an eye on your company’s expenses to make sure you don’t go over budget.
examine Your Funding Options
Spending too much money when starting your own business is a mistake. Avoid wasting money on purchases that won’t help you achieve your business goals by spending wisely. In order to avoid going over budget, keep a close eye on your business expenses.
- Business Loans: A commercial loan from a bank is an excellent place to start if you’re looking for financial assistance, but these can be difficult to obtain. If a bank loan is out of the question, you may be able to get a small business loan from the SBA or another alternative lender.
- Grants: Grants for small businesses are like loans, except that they don’t have to be repaid. Grants for small businesses are usually highly competitive and require firms to meet specific criteria in order to be considered. A small business grant that is tailored to your particular needs is the best option. Minority- and women-owned-business grants are among the options available, as well as federal and state government grants.
- Angel Investors: An investor may be necessary for startups that need a large amount of money in order to get off the ground. In exchange for multi-million dollar investment, investors expect to have a hands-on role in running your business.
- Crowdfunding sources: There are other options for raising money, such as launching an equity crowdfunding campaign. To date, crowd funders have helped hundreds of companies, and there are hundreds of trustworthy platforms available for all kinds of businesses.
Choose the Right Bank For Your Business
Size matters when you’re looking for a business bank in the process of making your own business. As a result of their familiarity with local conditions and willingness to work with you on the basis of your company’s overall profile and character.
You need to ask these questions before choosing a bank:
- What’s most important to me, and what do I value?
- Does it make sense for me to develop a long-term relationship with a bank that is always willing to lend a helping hand?
- In the eyes of the big banks, am I just another customer?
The best bank for your business depends on what you’re looking for. Having a list of your banking needs can help you narrow down your search. Visit several banks and learn about their approach to working with small businesses before settling on one.
Invest in the Right Technology
When you’re starting your own business, it is necessary that you invest in the right kind of technology. The decisions you will make right now will affect the management of your business later on.
Here are a few tools you should definitely look at getting for your business:
A Good Website Builder
No matter what kind of a business you have or what niche you are operating in, you will need a website sooner or later. It is best if you invest in good website building technology. The decision will depend on several factors:
- What will be the size of your website?
- Will you need frequent data updates?
- Are you going to sell products online?
- Are you going to expand the size of the website in the future?
- Are you going to integrate the point of sales system later on or now?
You will have to also look at getting in touch with a good web development agency or an in-house resource, depending on your needs.
A Scanner App
As a business, there will be a constant need to scan documents and send them back and forth to partners, employees, and other entities.
Having a nifty scanner app for your mobile will help you scan any kind of documents on the spot and send them via your messaging apps or emails easily. You can look into getting this robust scanner app for your needs.
You can also first download the free trial to ensure it fits your needs and then invest in the more advanced paid version.
A Good Project Management Software
Managing a bunch of employees and different projects on manual spreadsheets and notes can become quite a mammoth task for you in the future.
It is best that you invest in a good project management software like Wrike, ZOHO projects, or Asana to manage all your tasks and deliverables in one place.
This softwares will also help you determine better processes and more efficient ways of doing your tasks as the complexity of your work progresses.
An Advanced Virtual Private Network
A Virtual Private Network is vital for a business. Primarily a business that hosts a lot of or most of its data on its servers or cloud storage. Nowadays, every employer communicates with employees over email and online communication apps as well.
In this kind of business atmosphere, it is essential that you keep your data secure by using a VPN to connect to the internet. A VPN will ensure that no external attackers or hackers can have direct access to your servers or crucial business information.
This is one of the most important investments you will make alongside a scanner app for your iPhone or any other smartphone.
A Communication Application
If the pandemic has taught us anything, it is the fact that we need to be prepared to work remotely and also manage different aspects of our business remotely as well.
Having a good chat or communication app that integrates well with your project management software will ensure you have sound and thorough communication between your employees.
Account Management Software
As your business grows, you will no longer be able to manage your accounts and finances manually.
The wise decision is to invest in an account management software that will manage all your expenses and keep them updated accordingly.
This will save you tremendous costs of hiring account executives. This should definitely be on your list of things to invest in when making your own business.
Keep The Legal Needs In Mind
To begin the process of incorporating your business, you must first determine what legal form it will take. Everything from how you file your taxes to your personal liability if something goes wrong is influenced by the legal structure of your business.
- Sole Proprietorship: A sole proprietorship can be formed if you plan to run the business solely on your own and are willing to assume all of the company’s debts and obligations. You should be aware that taking this route could have an impact on your personal credit.
- Partnership: One alternative is that two or more people are held personally liable as owners of the business. Having a business partner with a different set of skills from yours can help you avoid going it alone. Your business will almost always benefit from the addition of a third party.
- Corporation: There are a variety of corporations that you can form if you are looking to separate your personal liability from your company’s liability (e.g., S corporation, C corporation, or B corporation). A corporation is a legal entity distinct from its owners that can engage in all of the same activities as an individual, such as owning property, assuming responsibility for others’ debts, paying taxes, entering contracts, as well as suing and being sued.
- Limited Liability Company: The limited liability company (LLC) is one of the most common business structures for small businesses (LLC). The legal protections of a corporation are combined with the tax advantages of a partnership in a hybrid structure.
To a large extent, you are responsible for figuring out what kind of business structure is most appropriate for your current situation and long-term plans.
Legal business structures are essential to know. Having a business or legal advisor on your side can be a good idea if you can’t decide when you’re starting your own business.
Register with Government and IRS
Before you can legally operate your business, you will need to obtain a number of business licenses. Registration with the various levels of government is a requirement for any business. Before registering, you’ll need to gather a slew of paperwork.
Operating Agreements and Articles of Incorporation
You must register as a business with the government in order to be recognized as such. If you’re starting a business, you’ll need an “articles of incorporation” document that includes your company’s name and other details. Similarly, an operating agreement may be necessary for some LLCs.
Doing Business As (DBA)
It is necessary to register your business name if you do not have articles of incorporation or an operating agreement.
This can be your legal name, a DBA (if you are the sole proprietor), or the company name that you have come up with for your company. For additional legal protection, you may want to trademark your business name.
A DBA is usually required by law in the majority of states. In the event that you are a general partnership or a sole proprietorship, you may be required to obtain a DBA certificate.
Your local county clerk’s office is the best place to find out about the specific rules and fees that apply in your area. In most cases, a registration fee is required.
Employer Identification Number (EIN)
The IRS may require that you obtain an employer identification number after you’ve registered your company. To keep your personal and business tax returns separate, you may want to apply for a sole proprietorship tax license, even if you don’t plan to employ anyone in the future.
You can use a checklist provided by the IRS to figure out if you’ll need an EIN to run your business. Registration for an EIN is free and can be done online.
Income Tax Documentation
As part of your federal and state income tax obligations, you’ll also need to submit various forms. Your business structure dictates which forms you’ll require.
Check your state’s website for information on local and state tax obligations.
Licensing and Permits
In addition to federal, state, and local licenses and permits, certain businesses may be required to operate. To get a business license, you should go to the city hall in your town or city. You can then use the SBA’s database to search for state and business type licensing requirements.
Licenses for businesses and independent contractors in some professions are required by law. A commercial driver’s license is an example of a professional business license. It is only those who have the proper certification to operate certain types of vehicles that are permitted by the CDL. Class A, Class B, and Class C CDLs are all subclasses of one another.
A seller’s permit from your city and state may also be required in order for your business to be able to collect sales tax. Authorization to resell, also known as a “permit to resell,” “permit license,” or “reseller permit,” is issued by the state and may also be known as a “permit to resell.”
Be aware that each state has its own set of rules and regulations, which are referred to by different names. A seller’s permit can be obtained from the state government website of each state where you plan to conduct business.
Build Your Core Team
Your core team is the people that will form the very foundation of your business and its policies. Be wise in choosing partners and executive-level employees that will energize your business and not drain it.
When doing your own business, you need to invest in people that are passionate about your work and are willing to take it to the heights of success. The initial days of a business are the hardest, and you need people by your side who will share your mental load.
Choose Your Trusted Vendors
Managing a business can be a daunting task, and you and your team will likely be unable to handle it all on your own. You can thank them for their assistance here. As a business owner, you have a wealth of options when it comes to partnering with companies in a wide range of industries.
In the search for B2B business partners, you’ll need to be careful. It’s imperative that you find a company you can put your trust in because they will have access to sensitive information about your business. If you’re looking for business partners, ask your expert sources about the experience, track record, and growth other clients have seen from potential vendors in your industry.
Although not all businesses will require the same vendors, there are some standard products and services that almost every industry will require. Consider the following essential functions for any business.
Offering a variety of payment options will allow you to accept payments from your customers in a manner that best suits their needs. To get the best deal for your business, you’ll need to shop around and find the right credit card processing company.
It’s possible to manage your finances on your own when you’re just starting out, but as your company grows, you’ll save time by hiring an accountant or comparing accounting software providers.
Starting your own business is no easy feat, and it will require a lot of grit and persistence to get it up and to run.
You should be able to invest time, energy, and money in the entire process and be patient enough to receive the required results at the end of the day.
We hope that the above-mentioned points will help you move forward with critical decision-making abilities and aid you in your process of doing bigger and better things as a business owner.