You have finally decided to quit your 9-5 job for starting your own business. Congratulations, you have taken the first step!
Now it’s time to go through a series of important steps, such as planning, conducting market research, funding and making major financial decisions, registering your business, and completing some legal activities.
A successful business lies on the foundations of effective planning, execution, maintaining quality and customer experience, and being consistent. No matter what your business size or type is, at the end of the day, you would like to boost your profit margins and growth.
However, to get started, you will need to follow a couple of essential steps to set the pillar firmly! Let’s have a look at the most essential steps for starting a profitable small business.
1. Conducting Market Research
Before beginning the planning stage, you must do thorough research on your target audience, your market potentials, and your competitors’ activities. Also, doing a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a must to come to any valid conclusion.
If you don’t know who your customers are, what are their interests and preferences, what are their buying trends and behaviors, and why your competitors are driving such huge traffic, you cannot make a concrete plan!
Besides, doing proper market research would also help you determine the opportunities and ways to turn your idea into a profitable business. Gather as much information as possible about your customers and your market conditions and the latest trends to use them for gaining a competitive advantage.
2. Strategic Planning
Research says that 50% of new businesses close their doors every 5 years, primarily because they have not set a workable or practical business plan or choosing the wrong industry type. And 25% of new businesses who do not have a plan at all are most likely to fail within 2 years of startup.
So, needless to say how important the planning stage is for your startup. It’s a blueprint for your business that guides you to achieve a specific goal. It enables you to structure, operate and grow your business in the long run. In fact, it allows you to set your short- and long-term goals, which are essential before starting out to help you stay on the right track throughout. Goals also enable team players to work collaboratively and motivate your employees to work more productively.
3. Funding Your Business
After figuring out your goals, it’s time to fund your business to make your ideas and plans functional and effective. Most startups often face challenging times while gathering enough funds to make the necessary investments at the initial stages.
Don’t worry; you can always apply for business loans or borrow the capital otherwise to raise the required amount. Some of the funding options available for entrepreneurs today include –
- Getting Venture Capital
- Getting Angel Investment
- Raising Funds from Accelerators and Incubators
- Applying for Bank Loans
- Raising Funds by Winning Contests
- Contacting Microfinance Providers or NBFCs (Non-Banking Financial Corporations)
- Applying to Government Programs Offering Startup Capital
- Selling Assets
- Getting Business Credit Cards
- Selling Your Products/Services Before Launching Your Business
4. Choosing a Suitable Business Location
You need to have a specific target audience within a particular geographic area. You cannot just include anybody within your target group as it will be pointless to waste your resources in promoting your products and services to uninterested people.
Try to research the region that a major portion of your potential buyers is located – be it for your brick-and-mortar store or your eCommerce platform. Deciding your target location is one of the most essential steps before starting your business.
Choose it wisely and make sure you get the maximum profit from that location. You may also choose multiple locations, considering the pros and cons of each.
However, keep in mind the legal requirements and business registration matters associated with your selected location. Also, have foresight regarding how your choice might affect your taxes, revenue and profits in the future.
5. Choosing a Business Module and Name
Next comes the vital step of choosing a suitable and profitable business module, structure and name, and consider the long-term benefits during the selection process. Remember that the structure and module you choose will have a significant impact on your business registration requirements, personal liabilities, tax and legal issues, as well as your revenue.
Coming to selecting your business name, you must make sure that it reflects your brand personality and captures your spirit well. It is the name that your customers must immediately associate with your USP, tagline, products or services you offer. And ensure you pick a unique name, not commonly used by any other business.
6. Registering Your Business
After you have picked your business name and structure, it’s time to register your business to protect your company from facing legal issues. By staying legally compliant, you will also be saving your brand reputation, which is vital to drive more traffic and boost customer satisfaction.
Further, if you are running a business that has a different name as your own, you will need to register your organization with the federal government, and also maybe with your state government.
Next, you will need to get appropriate federal and state tax IDs. You will need your EIN (Employee Identification number) in the future for paying taxes and opening a business bank account.
Once done, you will need to apply for business licenses and permits to stay legally compliant. Keep in mind that licenses and permits vary depending on your industry, business type, the location you are serving, and other such factors.
7. Opening a Business Bank Account
Last but not least, you need to open a business bank account to get started and receive your first customers. You can go for a checking account designed for small businesses to handle your day-to-day finances and tax and legal issues. This also enables you to stay legally compliant and secured.
Do you know that it’s pretty easy to set up a business account if you have the appropriate paperwork and registrations ready? Besides, without a proper business account, you cannot start accepting payments or make other transactions.
In conclusion, make sure to follow the above steps thoroughly and don’t forget to make a well-thought-out and feasible strategic plan and implement it effectively.
Next, select your business module and name wisely to enhance your profits and customer engagement rates. And ensure you stay legally compliant by registering your business, generating tax IDs, applying for licenses and permits, and opening a business bank account.