If you are reading this article, a major goal of yours is to start your own business. Still, we all have the success ratio of new business failure stamped deep into our minds: according to the U.S. Small Business Administration, 30 percent of businesses fail within their first year, and half of all businesses close up shop within five years.
Only a third of businesses will ever make it to their tenth anniversary!
There are a number of factors why new businesses don’t always succeed, but the leading reason is a lack of profits and funding, meaning an owners’ underestimating of how much money is truly needed to fund a business. This doesn’t mean you should give up on a dream – you merely need the proper tools, resources, and mindset before taking your next steps toward business ownership.
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Brainstorm Business Ideas
Begin thinking about what bothers you in your target sector, and how you plan to fix it. Maybe you have the knowledge or expertise to improve an existing business idea, or you possess unique skills that you can apply to a new or existing industry? These questions will help you brainstorm additional business ideas.
Conduct Market Research
Market research will let you know if there’s an opportunity to make a decent profit in your venture. The more extensive analysis will also help you determine what gives your idea a competitive advantage over your competitors in the same and similar fields and industries. If possible, give potential customers a chance to interact with your product or service and ask for honest feedback.
Write your Business Plan
Your business plan is a blueprint that will guide you throughout the lifespan of your business. Put simply, it should map out the purpose of your business, who your customers are, your long-term goals and how you plan to finance your operations.
Make your Business Official
This part is pretty black and white:
● Determine the structure of your business;
● Name your business;
● Register your business in your state and also federally;
● Obtain a state and federal tax ID;
● Acquire the appropriate permits and licenses;
● Open up a business bank account;
● Register for trademarks, copyrights, or patents;
● Be sure to get legal advice where needed;
● Pick a business location.
Finance your Business
How do you plan to finance your business? This is a major hurdle for many startups, so it pays to be prepared. There are numerous ways to solve this problem, including saving up the money and funding the business yourself. You might also ask friends and family for help, or obtain a grant or loan. Other options available include crowdfunding, trading equity, or working with investors.
Develop and Improve the Product or Service
Seek frequent feedback from your target audience to make sure you are on target with what they like and what they won’t accept.
These are the building blocks for setting up your business, so what are you waiting for? Make that dream a reality!