Starting a business is one of the most rewarding things you can do. You develop products and services that serve people and improve their lives, all while doing something you love.
Even though the benefits of starting a business sound great, seeing success is another matter. Reports show that only 50% of small businesses survive after the first five years.
That’s why starting a new business isn’t something you should take lightly. You need a solid plan to stand out and be successful. Keep reading to learn everything you need to know about starting a new business.
Determine Market Fit
Even if you have a great product idea, that doesn’t mean people will buy what you have to offer. In most cases, you can make a sale by providing entertainment, saving someone time, or saving someone money.
Unfortunately, the benefits you advertise won’t be enough to justify the cost.
Before spending a lot of time and money starting a business, figure out if people will buy. Try to reach out to your ideal customers and show them what your business offers.
You can learn a lot about how your product will do by listening to the feedback people provide. You’ll either need to start again from the ground up if nobody wants to buy or get valuable feedback that helps you refine your product.
Once you have a product that people won’t hesitate to buy, you’ve found a spot in the market to sell.
Don’t Ignore Financing Options
You can get a business up and running with your own money in many cases. Unless you’re opening a physical location and need to buy a lot of startup equipment, you won’t have too many costs.
However, that doesn’t mean you shouldn’t take advantage of financing in the future.
As time goes on and your business grows, you’ll encounter opportunities that need a large amount of cash to take advantage of. Unfortunately, it’s common to miss these opportunities when you only use cash.
Setting up financing early in your business is a great way to get ahead of the game. Pre-approved loans and credit lines will allow you to make large purchase orders and other investments without having cash on hand.
The biggest thing to consider is the return you’ll see on that debt. If you expect your business to grow more because of financing, it’s worth doing.
Pick the Right Business Structure
You have a few options for business structures when you start a new business. If you’re just starting and you’re on your own, it’s possible to do it as a sole proprietor. However, that does have limits.
It’s hard to separate your business and personal issues as a sole proprietor. If a problem occurs, your personal assets may be at stake.
It makes sense to open an LLC for people working as freelancers or who don’t need to hire employees. An LLC is a pass-through entity that helps protect your personal assets when issues arise.
If you ever want to onboard a partner, you can switch to a partnership.
If you plan to start a larger business and hire employees, a corporation makes more sense. This structure will help you set up payroll, and it gets taxed on its own.
If you’re unsure what type of business structure to form, reach out to a lawyer to get professional advice.
Pick the Right Tools
You’re already going to have a ton of work on your plate when you start a business. The last thing you want is to give yourself more work by not using software tools to handle a lot of your tasks.
There are countless tools available, so look into each option to find the best ones. Here are a few tools you can examine:
- Project management software
- Email list
- Customer relationship management
- Accounting management
- Process automation
- Inventory management
The above is a great first step for most business owners, but other tools that are unique to different industries are also available. Look at niche-specific tools to see how they integrate into your business.
Of course, you also have the option to have tools developed that are completely custom to your needs. Even if this isn’t feasible initially, you should still watch your routine tasks to see if the software can help.
If software can make a task easier and less time-consuming, it’s worth paying a developer to write software to handle things for you.
Plan Your Marketing Strategy
You can’t expect people to just stumble upon your business in today’s competitive world. Now that people can search online for everything they can imagine, it’s harder than ever to stand out as a small business.
A great marketing strategy will help you stand out from your competitors. Since you know something about your audience with information from your market fit research, you should be able to find a place online to advertise.
Of course, the first place to start is with a website. Your website acts like a 24/7 salesperson that never sleeps.
You can either go with a pre-designed website theme or hire a web designer to get a unique look. Many companies offer affordable web design prices, so it doesn’t cost a fortune for a great design.
Once you have a website online, you have a place to send online traffic. Look into SEO, display advertising, and social media marketing to see the most promising place to reach your target customers.
Keep the Guide Above in Mind When Starting Your New Business
A startup company is hard enough to be successful with when you do everything right. It’s even harder when you don’t know what you’re doing and fail at executing your business strategy. Follow the guide above when starting your new business to avoid the common mistakes new business owners make.
Head back to the blog if you want to find more business tips that will help you run a business the right way.