You may have an excellent idea for a new business but you don’t really know whether it is worth pursuing. Here are some essential steps to take to determine whether it has potential and to get it off the ground if it does.
1. Conduct research
Identify your target market: Find out who will benefit from your products or services. You will need to know demographics such as age, gender, marital status and location. Once you understand more about who is likely to buy your products, you can start engaging with them via surveys on social media etc., to gain feedback.
Find out more about your competitors: Analyze competing products in your industry to find out what your product offers that could persuade consumers to buy from you. Find out what people currently spend on similar products.
Research business locations: Choosing the wrong location for your business can impact its success. Phoenix is the capital of the Arizona office space market and the largest city in the state. Any startup would do well to choose Phoenix as a home base. If you are looking for a shared office space in Phoenix or other major cities like New York, Los Angeles, Oakland, San Jose, there are many cost-effective options for startup businesses. Office space is not just about the rent as it also means higher maintenance charges, parking charges if applicable and more in-house housekeeping staff, so there’s really nothing better than a shared space for startups that want to save money in the initial stages.
2. Write a business plan
Writing your business plan will help you to define your current and future goals and think about critical factors that you can’t ignore if you want to be successful. It should answer questions such as the following:
- What is the purpose of the business and who are the customers?
- Who is the competition and what makes a product unique? Does it have more features, is it more affordable or is it of better quality?
- How will I price and position my product?
- What are my financial projections for my business?
Your business plan basically organizes all the important details about your business and shows how you plan to make your idea a reality.
3. Make your business official
You will need to register your business with federal, state and local authorities and obtain the necessary licenses or permits. Registering with the IRS is necessary to get a tax number for reporting purposes. You have to decide on what type of business structure to use, such as a sole proprietorship or a limited liability company (LLC), as this will have tax implications for your business.
4. Secure funding
Many startups fail because they run out of money before they become profitable. You need capital to set up your business and support it until such a stage as you begin to bring in revenue. Only when your income is more than you require to break even will you start to make a profit.
You may receive funding from family or friends or you may have to approach a commercial bank or an angel investor. Crowdfunding is another option today whereby you raise small amounts of money from many backers and garner interest in your product from an early stage.
5. Assemble a team
Deciding how many people you need to employ can influence the success of your business. Defining roles and responsibilities, how to work together, give feedback etc., can prevent headaches down the line.
You may decide to hire a virtual assistant to perform certain administrative tasks and consider outsourcing certain key functions at first rather than employing too many people and having to carry high wage expenses before you start making a profit.
Getting some financial and legal advice from trusted attorneys or tax accountants can also save trouble down the line.
6. Purchase business insurance
Before you even begin operations, it’s important to purchase business insurance. First, research the types of insurance you need to protect your business against unexpected losses. Dealing with incidents like theft, property damage or a customer lawsuit can be costly and you want to make sure you’re protected. The type of insurance cover you select will depend on factors like your location and your industry.
7. Brand your business
Before you even start selling your product, you have to start building your brand image. Choosing the right name for your business and designing a simple but eye-catching logo is a good start. Your company website provides a way to interact with consumers and is critical in today’s digital age. You also need to set up profiles for your business on the social media platforms your target audience uses. Consistency in how you promote your brand across all platforms is essential if you want to make an impression on consumers.
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