Launching your own business can feel like a dream come true, but it can quickly turn into a nightmare if you aren’t completely prepared for what’s ahead. Being your own boss can be a fantastic way to earn a living, but you’ll face a variety of challenges when you’re in the process of starting and running a venture.
Sadly, the failure rate for startups in the U.S. is high, perhaps because eager entrepreneurs rush into launching a business without undertaking the necessary preparation. However, there are a number of high-profile startups and side hustles that have gone on to become super successful businesses too. If you want to ensure your venture is in the latter group, take a look at the eight startup tips you can’t afford to miss:
1. Start with a Great Idea
You don’t need to reinvent the wheel in order to launch a new business, but you do need to offer genuine value to your customers. If you want to become an online retailer, for example, you’ll be competing with millions of others ecommerce enterprises, so how will you differentiate your business from the competition?
Be as creative as possible when you’re exploring new ideas but be sure to test them out on a range of people! Friends and family might be hesitant about giving honest feedback, so don’t rely solely on their opinion. Instead, canvas a wider group to help you settle on an idea that can be turned into a lucrative business.
2. Don’t Skimp on Research
Research should play a critical part in launching a startup. Before you begin investing time or funds in the venture, you’ll need to conduct preliminary research to ensure the concept can be profitable. This means researching the market, industry and sector that your business is going to operate in. Additionally, you’ll want to research competitors and your target audience so that you can hone your business idea for maximum success.
Although there’s a lot of research involved in setting up a business, it’s useful to develop these skills from the get-go. You’ll be conducting on-going research while running your business, so start as you mean to go on.
As well as accessing industry reports and studies on your target demographic, you can instigate your own research studies using a variety of methodologies. Focus groups, surveys and one-to-one interviews can all be viable ways of gathering the data you need while launching a new business.
3. Create a Business Plan
Once you’ve conducted initial research, you’ll be well-placed to start writing your business plan. Although it can take time to gather all of the data you need, your business plan is going to guide you throughout the process of launching and running your enterprise, so it’s worth putting the time in.
At a minimum, your business plan should contain market analysis, a description of your business, your service or product line, financial forecasts, funding requirements, marketing strategies and exit or growth plans.
While it’s possible to hire people to write a business plan for you, you could be doing yourself a disservice if you go down this route. The process of writing a business plan gives you the opportunity to conduct important research and make decisions about how your venture is going to operate. As the owner, it’s vital that you have in-depth knowledge of all the information contained within the document, so writing your own business plan is generally advisable.
4. Learn How to Run a Business
It doesn’t matter whether you’re launching a B2C or B2B venture or what industry you’re going to be operating in, you’ll need to know exactly how to run a business if you want to be successful. Managing teams and leading a business can be much more challenging than people realize, so don’t overlook the importance of learning how to do this.
If you want to give yourself the best chance of success, consider completing an advanced qualification. With accredited Boston MBA degree programs online from Suffolk University, you can study the critical topics that will help you to run a successful business.
What’s more – studying online gives you the freedom to learn from any location, which enables you to combine your qualification with full-time work. As you launch your startup, you’ll be able to implement the practical and theoretical knowledge you’re gaining to maximize productivity and profitability.
5. Choose the Right Business Structure
Before you launch your business, you’ll need to determine which structure suits your venture best. Many people choose to start out as sole proprietors, as this is an easy way to start a venture. However, you’ll pay income tax on your profits as a sole proprietor and your personal finances will be inextricably linked to your business dealings.
In contrast, registering a private company allows you to separate your personal finances from the business but it means that you’ll pay corporate income tax on company profits, as well as income tax on any salary you earn. Alternatively, if you’re starting a business with another person or more than one person, you might decide that a partnership is the most effective structure for your business.
As there are pros and cons of each option, it’s worth getting professional advice before you decide which structure to use. Seeking help from a business adviser, an accountant or a tax specialist will enable you to make an informed decision about how to structure and formulate your venture.
6. Obtain Enough Finding
Some startups require more funding than others but very few businesses can be started without any capital at all. You might need funds to secure business premises, for example, or you may require financing so that you can pay your workforce until revenue is generated. Similarly, your funding will need to cover the cost of marketing, purchasing or hiring equipment, buying stock or materials, paying advisers, creating an IT infrastructure and much, much more.
A significant number of new business owners underestimate their costs, which can lead to financial issues fairly quickly down the line. To prevent this from happening, it’s vital to create accurate financial forecasts from the outset. These should be contained with your business plan, so you’ll be able to identify how much funding you’ll need by reviewing this section of the document.
Then, you can decide what type of financing to use. If you have personal savings, you might choose to use them to start your new venture. Alternatively, you might decide to sell shares in your business to friends and family, obtain a business loan, apply for a grant or appeal to venture capitalists. There are a variety of ways to fund a new business, so consider all of the options before you decide which type of financing is best for you.
7. Take Out Insurance
When you’re looking forward to getting your business up and running, it’s easy to overlook some of the duller aspects of starting a venture. However, taking out business insurance is one of the most important elements of launching a startup. Protecting your liability and the business’s liability should always be a top priority, so don’t hesitate to get the insurance you need before you begin trading.
There are various different types of business insurance to consider, and it might be worth taking out a range of policies or choosing cover that incorporates different types of insurance. Employer’s liability insurance is essential if you’re going to hire a workforce, for example, but public liability cover will protect you from claims made by other people who are injured or who experience property damage due to your operations.
From interruption insurance to professional indemnity cover, there are numerous policies that may be suitable for your startup. By making sure you have the right cover in place, you can limit your liability and protect your business from potential financial harm.
8. Develop a Brand
If you’re going to start a successful business, you’ll need to develop a memorable brand to represent it. If done well, a brand encompasses your company’s values, as well as telling your target audience what they can expect from you. Everything your startup does forms part of its brand, from its website and online content to its customer care and service propositions. If you begin developing your brand at the outset, you can use it to increase the success of your startup and instigate engagement with your target audience.
Turning Your Startup into an SMB
Following the launch of your startup, increasing sales and revenue can quickly transform your venture into a small business. From there, you’ll have the potential to expand even further. Planning for the future might seem optimistic now, but it will ensure that you have clear objectives and goals to work towards. In addition to this, it will keep you motivated as you navigate your way through the early days of business ownership and give you the determination to succeed as you launch your very own startup.
