Originally published at SeekingAwesome.com
Are you thinking about starting a business but don’t know where to start? Here is a quick five step guide to help you get on your way (Check out how they all start with P. I planned that.)
The “Ah Ha” moment.
That moment when the idea hits you. It is a critical first step as every $100 million business started with an “Ah Ha”.
The idea is also the pivotal point where you decided to get to work and start a business or dismiss the idea and flip on Netfix. Think about it, how many business ideas have you had in your life? I’m sure I had the idea first for Google but I had to stop at the dry cleaners and forgot the idea. What separates most people from Larry and Sergey is that they took action.
Pleat & Prove
Research and prove the business will work and people will buy your product.
- Secondary Research ~ This is the internet and database research. Here are some sources to help you out.
- Public Library: Most larger libraries have access to research databases that you could never afford to use. They usually have on-line access so if you do’t live close to them you can still use the resources.
- American Fact Finder: This is a Census site where you can demographic data on various geographic areas.
- Reference USA: The go to source for research on businesses. This is one of the databases you will probably need to access through a library due to cost.
- Dun & Bradstreet: Comprehensive business databases allow you to benchmark and identify a great deal of business information. Again you will probably need to access through a library.
- Manta: Information on individual businesses, industry segments and geographic-specific listings. You can also list your business here once you are up and running.
- Primary Research ~ You have to go out and talk to people if you really want to understand their needs and wants. Even if you have been in the industry for years you still need to talk to prospective customers. This will allow you to validate your assumptions and if they like what you are doing they could become early customers.
I didn’t say write business plan I said plan. To many times people become intimidated by the thought of writing a business plan so they just flail around never getting a real grasp of what they need to do to start and run their business.
If you can write out (in whatever format) the answers to these questions you have enough of a plan to move forward
- Who is out there to buy your product?
- Will they buy your product at your price?
- How will you get them to buy your product?
This is when you start putting everything together.
- Establish Your Legal Structure ~ A lot of people think this is “starting a business”, it isn’t. This is filing forms and paying fees. Sure it is important but it is a fairly mechanical process. Next decide what your legal structure will be, the IRS has a nice description of the various legal structures.
- Determine How Much Money You Need to Do Business ~ You may not need financing but you better know what amount of money you need to launch and operate your business. Making this determination is a function of the amount needed for start-up costs and your cash flow needs until you can reach break-even. From here you can decide if you need financing.
- Prepare For Business Operations ~ Move from I’m planning to go into business to I’m in business. Get your business infrastructure in place including equipment, inventory, staffing and marketing. Start to lay the groundwork here to get sales and payments as quickly as possible once you officially open for business. Also, take your family out for a nice dinner before your open and tell them to enjoy it because it may be awhile until the business gets rolling and your can do it again.
- Initiate Sales ~ This is what it is all about, the exchange of money for your product. Establish a sales process. Make the calls, meet with people, close the sale. Remember…”A” Always, “B” Be, “C” Closing. Sales is not a dirty word. Sales is how you will get your solution out to solve the problem you identified in step one.
- Manage Operations ~ There are things that need to be done everyday regardless of sales volume. Could be as simple as opening the mail or as detailed as reviewing the weekly sales results. This needs to happen regardless. If you don’t have someone to handle those responsibilities they are yours.
- Grow The Business ~ It is very easy to get swept under by the tsunami of the daily activities referenced in the previous point but be sure you keep running the business and find opportunities to grow. It is critical that you continue to think and plan strategically to continue to build your business. Don’t forget about your business plan, you wrote it to use it so use it.
Do you need to do all of this? No. However, by preparing you actually move faster once you launch because you have thought through the strategy and potential pitfalls. It will also help you avoid many potentially expensive mistakes and re-starts and save you money (not an issue if you have unlimited money). This will also allow you to better react to unforeseen issues because you understand your market and customers.
Being mindful and prepared will allow you to take that dime a dozen idea and build a super hot business.