Startup initiations can be a tedious process with planning, organizing, managing and waiting, but it’s all worth it in the end. Everything in life takes effort, sometimes more than what one can muster. Similar is the case with startups that are born from simple ideas.
Commitment is a necessary trait that can transform your idea into a reality – physical or virtual – depending on your choice of business model. You must continuously be on your toes to ensure that all the pieces of the puzzle fit. One missing piece can do some damage, causing the picture to remain incomplete.
When starting a new business, an optimal strategy is to draft a to-do list. A to-do list will you to keep all the puzzle pieces in one place so that you don’t lose focus on your overarching goal. This to-do list will also list all the major steps that you must complete.
1. Think of an Idea for the New Venture
It’s the initial step required for any business startup, and often the most time-consuming. If you have not thought it through, conduct a thorough research on the various business ideas available. Choose an idea after you have answered the following questions:
- Does it complement your strengths?
- Is it achievable?
- Is it scalable?
If you have a definite answer to all these questions, your idea is ready. All you have to do now is start working on it. For convenience, you can also conduct a SWOT analysis to see whether the idea leverages on your particular strengths.
2. Explore the Market
The second step on your to-do list holds significant ranking primarily because without testing your idea, you could end up wasting effort and money at later stages. At this stage, ask yourself the following questions:
- What is the product trying to solve?
- Which industry are you targeting?
- Is there sufficient demand?
- Does this product have a target audience?
- What is the market size for your product?
- What is the competition like in the market?
Your market research shall result in a definitive or somewhat accurate answer to these questions. There must be a problem in the market that you are trying to address with your service or product. Identifying the industry, demand, competition, and choice of the audience – mass or niche – are some of the vital questions you need to address at this stage.
There are two types of market research: primary and secondary. If your business idea resembles one already in the market, secondary research can help you answer all these questions. If it’s a niche, primary research will become necessary. In either case, thoroughly research the market and respond to the mentioned questions.
3. Formulate a Business Plan
This is another essential task on your to-do list that can make or break your idea. A simple business plan format will do the trick. All you have to do is make financial projections using demand and supply figures and come up with some simple cash flow projections for the startup.
A business plan is necessary if you want to acquire financing from sources other than your own investment capital. Without a reasonable business plan, no bank or venture capitalist will entrust you with their investment. Make sure to include the following in your business plan:
- An executive summary
- Business overview
- Estimated expenses, sales, and profit for the next 5 years
- Upfront investment and startup costs
- Business objectives and goals
- Elevator pitch
In addition to this, the business plan will include responses that you have gathered in the first two initial steps. Investors would like to see how well-thought-out your business idea is and if it has any potential. Don’t forget a strong sales pitch with a plan that is hard to reject.
4. Plan for Financing
This is where money matters. If you have sufficient capital to invest in your idea, good! In most cases, you will be looking for potential financing options for your new startups. Here are a few small business financing options to look for:
- Loans for SMEs
- Friends and family
- Angel investors
These are a few options for acquiring the much-needed investment for the business. The first and immediate contact could be your parents, siblings, and friends. You can either persuade them to invest in the business or borrow from them and pay them back once the business is booming.
Some governments provide SME loan schemes to help finance startups and new business ventures. Look these up and find one that suits your needs accordingly. This should provide you with enough capital to start your business operations.
Another method is to have some willing investors on board with the business idea and acquire sufficient funding for your startup. On a part-ownership basis, you can make an agreement with an angel investor and actualize your dreams.
5. Business Branding
At this crucial step, you must create a brand name for the business. Choosing a brand name will help your business acquire an identity of its own, just like Apple. While deciding on a unique name for the business, make sure it has the following attributes:
- Easy to pronounce
- Aligns with the product
- Easy to recall
- Unique and stands out
Branding is not all about the name; it encompasses creating a brand message, tagline, value proposition, logo design, and fulfilling any and all legal requirements necessary for name registration. Choose your brand carefully.
6. Get Your Business Registered
In this stage, you have a couple of daunting tasks to perform if you want to get your business registered. First and foremost, determine the legal structure. Most small business setups opt for sole proprietorships or partnerships, but this is entirely up to you.
Once that is done, register your domain name and business name. While doing so, you will be required to file a trademark for protection in case your product uses the same name as your business.
Next up, don’t forget to apply for permits and licenses for both federal and state. These licenses will depend on your location and your industry. Check for these online or with the help of your local council.
An employer identification number (EIN) is deemed necessary to separate the business from the business owner and for the startup to operate as a different legal entity. By obtaining an EIN, you can separate your business and personal accounts.
7. Setting Up
If you have checked all of the previous 6 tasks in your to-do list, this is hands down the most interesting of them all. You have decided upon a location while looking up federal/state licenses and permits, and it is now time to get building.
This step depends on whether you have a physical business or a virtual one. Whichever business model it is, setting up is mandatory. Put everything in place, and ‘everything’ in this case refers to a few or all of the following:
- Physical office space
- Bank accounts
- Business cards
- Social media
- Accounting system/ERP
Even if you don’t have a brick and mortar setup, don’t worry as you’ll need a few of the aforementioned in either case.
8. Market and Press Launch
This step is for unleashing all that creativity you’ve been hiding. Begin with your own personal social media, and market your startup to friends, relatives, and family. For your target market, you need to draw up a marketing plan that covers a meticulous layout for how, when and where marketing efforts are to be expended.
A marketing budget is also mandatory to deciding on how much you can dedicate to your business marketing efforts – neither too much, nor too less, but just right. At this stage, use the social media presence that your business has acquired in the previous steps for your big launch.
You can decide to launch the business on Facebook, Instagram, and Twitter as well. A personalized website for the business is a must! If this does not satisfy you, announce a grand opening ceremony for close friends and family. There is no restriction on how big or small the launch can be; go for what suits your budget and show your business for the world to see!
If you have a business idea that you want to actualize, use this to-do list as your ultimate guide to building a new business from scratch. Check every task as soon as you have accomplished it and move on to the next one in line. Not only will you have a reference list to refer to every time you miss a necessary step, but it will also be your instruction manual for what ought and ought not to be done to embark on this journey.