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“How To Start Your Own Business” – The Step By Step Formula

Are you thinking of, or have you recently started your own business?

As you enter into the process, it can be quite overwhelming, trying to remember, let alone know for sure, all the steps you have to take, all the regulatory matters and things to think about.

What you need to do at the outset is to understand what you need to bring to the game, be clear about all the steps you need to take from thinking about the idea of starting your business to business opening, and to actually design how the business will operate and what to do strategically and on a day-to-day basis.

You can, however, follow a pretty standard step-by-step formula.

I have used my 40 years’ experience advising small business owners and distilled it into 5 basic steps.

So, let’s go!

There are 5 basic steps to take when you are starting your own business.

 

 

Step 1 is to make sure that you are personally equipped to start your business.

This is your first hurdle.

It is no disgrace to admit that some people are not suited to start a business and are better as excellent managers in employment.

So ask yourself if you have the temperament to start your own business.

This means that apart from being an expert in what you do, whether you can be self-motivated when any deadlines or goals in your own business are set by yourself.

You will also need the ability to roll with the punches and accept some bad times and losses as well as the good times. Inevitably there will be ups and downs so you cannot panic or chuck it all in when the ups are just coming but perhaps still out of sight.

You also need to understand that it is in the nature of a startup that you may have to make some sacrifices and some of these could be significant. For example, time is the resource that is most required at the beginning of any business – you are frequently “catching up” so that will mean significantly less time to spend with your loved ones and to spend on leisure activities.

Another resource required is cash.

In the beginning, you will be investing a lot into the business and you may not see much cash flow coming back in the early stages – it’s all about building potential and future cash flow. Will you be settled and accepting or will you stress and worry?

The best way to ask if you are built to do this is to talk to someone who’s “been there” and can honestly tell you what to expect.

Of course, nobody can predict exactly what will happen and what kind of stress or sacrifices you will have to endure, but talking it through with someone can prepare you. After all, forewarned is forearmed.

In preparing yourself, it is also advantageous if you find out what skills you might need.

Being a small business owner is not just about being good at what you do.

Being an expert Accountant will not help you when you need to expand your client base. You need to learn about marketing.

Being an expert builder will not help you to prepare accurate books that can tell you what you can afford to pay yourself – you need to undert=stand what your books say.

Certainly, you can hire experts – but it is your business, and it is incumbent on you to understand what these experts are telling you so that you can make the decisions. You cannot let them make your decisions for you.

So, when you talk to people, try to work out what kind of skills or understanding of other business skills you need. I think you need to understand something about your books and how they are kept; I think you need to have an understanding of marketing – at least about who you are targeting and what the best way is to deliver the best message to them. I believe you need to know a little about human leadership and how to work with people to encourage and motivate them and get the best from them.

Step 2 is to make sure your business idea can fly.

This is your second hurdle before you jump in.

Will your business idea really succeed, taking into account the industry, the demand, the market, the location and the competition?

This means that you need to properly describe your business idea – what it is, what does it sell, who does it sell to.

If it is a new invention or something revolutionary, you may need to test the idea.

Is it a genuine solution to a real-world problem that many others also experience? Have you tested it in a small way to see that it works, and can it scale?

Then, you can research the industry you are in.

Is it a “new” industry or an old industry? What are the trends in that industry where you are? For example, a manufacturing industry may succeed in a country where labour is cheap enough to be competitive but it may be on the decline in a location where the manufacturing workforce is scarce.

What is the demand for your product or service where you are? For example, a bakery-cafe may be successful in a light industrial suburb, but not very successful in an out of way small country town.

What is the competition in your location? How big are your competitors and how many are there?

What are the barriers to entry for that industry – what makes it hard to set up a business in that industry?

For some industries, you may need to be licensed, or you may need substantial funds to invest in expensive equipment, or you may need to be qualified and certified, or it may be subject to intellectual property rights – all these becoming barriers to entry that you may have to overcome.

Make sure you have a good understanding of whether your business idea can work.

Step 3 is to design your business model.

You need to be clear about how all your business’ systems work with each other.

Your business model is made up of components:-

  • Customers – who are they and which segments provide the most revenue?
  • What are your products or services and what do they do for your customer segments?
  • What are your most productive revenue streams?
  • How do you communicate with your customers and deliver your value?
  • What are the important activities you do every day that make your business possible?
  • What are the key resources you need to make all this work?
  • Who are the key partners in the business model – who can you not do business without?
  • What will be your cost structures?

All of these components must work together and in many cases help each other work.

It is important to design this early so that you don’t have to do it on the run.

Your new business would experience a lot of stops and starts if every time you hit a problem in how you operate your business you had to make something up – and then discover that it clashed with the way you did something else.

Step 4 is to plan, and plan and plan!

There is no excuse not to have a business plan.

Yet many small business owners first start their business with only a vague idea of what they need to do to build a sustainable business. They open their doors and then hope for the best – hope that enough of the right customers come in; hope that they have enough money at the right time; hope that when they need to they know who they need to hire and where to find them; hope that they can find the right resources, training, supplies when they need them.

Hope does not build your sustainable business.

Being prepared, and knowing where you are going and how to best get there does.

The most successful small businesses also have a marketing plan, defining who they are targeting, what their product or service does for those people’s needs, and what to say to them as well as when to say it and where to find them.

Not having these plans is like going for a Sunday drive with no goal in mind – who knows where you will get to and if you have enough fuel!

Step 5 is to tick off all the small things you need to get ready.

But to start with, why don’t you start to put together a list of a panel of advisers that can help you in your business. A good list might include:-

  • an accountant
  • a commercial lawyer
  • a bank manager
  • a web designer
  • a computer and networking specialist
  • a business consultant or coach
  • an insurance broker
  • a real estate agent
  • and perhaps a virtual assistant.

You don’t have to activate your dealings with them, just make contact for when you need them.

Some of them should be able to help you tick off the usual set up items:-

  • Incorporation and Business Name registrations
  • Tax registrations
  • bank accounts and EFTPOS systems
  • Website and domain registrations
  • Printing of stationery
  • insurances
  • Set up accounting systems

It may look overwhelming, but if you work logically setting up your business is a simple step-by-step process.

The important thing is to think ahead and plan.

To make things even easier for you I have created an online course called How To Start Your Own Business.

The course is a deep follow-each-step dive into the steps I have written about here.

If you are excited about starting your business, but a little anxious about what you need to do and hopeful that you won’t forget something important, this course is just for you.

After you have completed this course, you will have gained confidence that you are doing the right thing, improved your chances of success, design your business from the start, have clear strategies that you can follow, and taken care of all those small details.

If I were to guide you in my face-to-face bricks and mortar business through these exact same steps I give you here, we would take over three days and it would cost you $8,000.

However because I can use the internet to pre-record my advice on each step, I can leverage my time and offer this course to all first-time business starters for only $97.

Apart from the course itself, I am also providing you with a lot of valuable bonuses like checklists and templates that you can use as you prepare plans, choose the right adviser, and so on.

This is what you get:-

  • You get 5 video lessons giving you detailed step-by-step actions, starting from scratch;
  • You get 10 downloadable worksheets to use during the lessons on assessing your personal readiness, business feasibility assessment, designing your business model, business planning, an implementation checklist, and checklists on how to choose professional advisers;
  • You get a bonus video on what you need to find in yourself to be a successful business owner; and
  • A bonus on how to write Position Descriptions for staff and organise your team.

That’s an incredible barrowful of value for only $97 – priced for the starting business!

So, go and get it here and get yourself fully prepared to start your business.

See you on the course!

 

 

 

Cover image by David Iskander on Unsplash

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