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Starting a business can be such an exciting life venture, especially for a woman. You no longer have to do someone else’s bidding, go through all the office politics or hit your head on that glass ceiling any longer. You can work for yourself and do what you want to do.
But exactly how do you go about starting a business in today’s culture? Clearly it takes a lot of work, but what does that work consist of? Here are seven things, inspired by Candice Landau’s advice on Bplans, you should do before starting a business.
Landau suggests you start by asking yourself questions like “Why do I want to start a business?” “What do I want to do?” “What service will I be offering?” “Who is my target audience?” and so on. These questions will help you decipher what your goals are, what kind of service you will bring to the table and who will want it.
The answers to these questions are important because building a successful business with opportunity for growth takes a great deal of trial and error. Not only that, but Forbes also says, “Starting a new business takes brains, bravery and what will seem to be endless hours of hard work.” It is very likely that you will find yourself working at least 60-80 hours a week for the first two years – is that a life commitment you are willing to make?
The most important thing you can do is to analyze your industry. Landau advises future business owners to know their customers. Are you selling your goods to young women, children, parents or senior citizens?
Once you answer this question and establish your audience, you will have a better understanding of how to market to them and whether or not they’ll like your product.
James Caan, chairman of the Start-Up Loans Company, writes on The Guardian that a good way to evaluate your customers is by analyzing your competitors. “This will give you the insight needed into how to make your product or service even better on price and quality,” Caan says. Not only that, but you can also learn from your competition’s success and failures before you make any of your own.
As with any business, the legal aspect is perhaps the most important part. You don’t want to find yourself in any sort of legal situation that will result in negative PR or monetary losses. Landau says that it’s imperative you know what kind of business model to register under and you need to get a lawyer to assist with any other legal matters you’re unfamiliar with.
According to Forbes, you generally need to be sure that:
1. You are charging the correct amount of tax for your services or products.
2. You get all the proper business licenses needed to run your business in your city.
“Establishing a successful business is hard enough. The last thing you need is some technical legality or administrative detail to stand in the way of your success,” writes Forbes.
As is the case with any big decision in your life – whether you’re deciding to go to college, moving to a new place or getting married – there must a plan in place. A business is no different.
Business plans are necessary in order to get finances from outside sources or simply to have answers to some vital questions like, “Who is financing the venture?” or “What is the timeline it will take to get the business up and running?”
Business plans will force you to think critically about what you are trying to accomplish and how. It is crucial to both you and to any potential investors that you have a road map for how you intend to go about starting the business and maintaining it.
Tory Johnson, founder of Spark & Hustle and Women for Hire, tells ABC that not all business plans need to be excruciatingly detailed. “For a basic business, I favor a one-page business plan that covers what you offer, who you’re targeting, how much you’ll charge and what you’ll do to make it happen,” says Johnson.
Because building a businesses is often a “fluid process that will change once you dive in,” it’s okay to keep it simple at the start. If you need some tips, you can visit Johnson’s Spark & Hustle website to read, “Skip the 40-Page Business Plan.”
There are many ways to get your business financed. You can get help from family, bank loans, credit cards or ask for money from investors. But to do the latter, you will need to have a pitch. Essentially, you will need to practice a persuasive presentation of your business plan to present to potential investors.
Secular business evangelist, Guy Kawasaki, says that the actual business plan is the least influential factor in getting financed for a business, but the pitch is the most influential. It’s a matter of convincing your investors that your business model, idea and product are good enough to pay them back and bring in profit.
So, your pitch must be well thought out and well done in order to convince them to believe in you and your company’s growth.
This point encompasses a lot of things, including where your location will be, who will see it and how you will set your prices for your product.
ABC advises, “Your pricing shouldn’t just cover your costs; it must also generate a profit for our business. Don’t undervalue your time and talent, which is a classic mistake.” One of the ways you can avoid undervaluing is to work from the top down – set the amount of money you want to make annually, break that down into a weekly goal and then decide how many sales it will take to reach that goal.
Additionally, you have to consider city and state regulations as well as the number of competitors in your area. Will they hinder your business? Will you be able to keep up with them? Is the cost of having a shop there too much? Are you surrounded by competition? Will you be the only store of your kind around?
These may seem like a lot of questions, but having an answer for these problems will have a heavy hand in determining how well your business does.
Know that you are human and mistakes are bound to happen. Each new challenge life brings is ultimately a learning experience. As your business grows and develops, you will learn what works and what doesn’t. There will be pitfalls and there will be elevations to success but it all comes with learning and with time.
Entrepreneur says, “You need to accept right now that learning always comes before ‘earning’ (except in the dictionary). You’ll need to be committed to learning as much as you can about sales and marketing and operations if you want to have a truly [successful] business.”
