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How to Start a Business
If starting a successful business was easy, everyone would do it. It takes a lot of work to bring a good idea from your head into a company that does things and turns a profit.
However, if you do have a good idea and you are willing to work hard to bring it to fruition, you can start your own business. Thousands of entrepreneurs create their own companies every single day, and 80 percent of those companies make it into their second year of operations.
Some people choose to start online businesses, while millions more start businesses at home. If you do a little prep work before launch, you can create a business that survives initial startup and grows to thrive in the years that follow.
Here are some great tips to start a business from scratch.
Refine and Test Your Idea
If you’re going to start a business, you have to begin with an idea. Determine exactly what it is you want your business to do, and how you believe it will make money.
You don’t need a lot of detail at this point; that will come later when you write a business plan. The important thing at this point is that you clearly understand what you expect the business to do.
Once you’ve fleshed out a business concept, you’ll want to verify if it is feasible by conducting some market research. If your business is delivering a specific product or service to the market, you could check with potential customers to gauge their interest in purchasing it.
You should also verify what kind of competition you’ll face as well. If you’re confident that your business idea is feasible, then you should write up a business plan.
However, if your initial work and research indicate there are challenges ahead, it may be wise to either revise your idea or think of something else to pursue.
Write a Business Plan
Once you have refined and tested your idea for starting a business, you need to write a business plan. Your business plan will serve as the roadmap that guides you from concept to actual business creation; it will also help you determine how best to run and grow your business and is extremely important.
There is no set format for writing a business plan and if you are unfamiliar with business plan preparation, there are many places you can get help. For starters, the Small Business Administration (SBA) has some useful information and templates for business plan formulation that are definitely worth checking out.
Since a business plan is so critical to your overall business’ success, you may want to seek additional help in writing or refining it. You could use a freelancing platform, such as Fiverr or Upwork, to find an expert to take your concept and, after a little bit of back-and-forth dialogue with you, write up a professional business plan.
Many of the freelancers that use these sites are experts at business plan writing and are affordable as well. Additionally, once you have what you believe is a solid plan, you may want to reach out to your local chamber of commerce.
There may be businesses and resources in the chamber that can give you helpful tips to avoid pitfalls and make your business plan even better. Additionally, networking with local businesses can help you garner additional expertise that will make you a more successful entrepreneur as well.
Once you are confident that your business plan is solid, you’ll need to get the financial resources in place to fund it. In many cases, you may opt to self-fund your new business.
In fact, the majority of new businesses begin with an owner or business partners self-financing them; this is often referred to as “bootstrapping.” However, in many cases, self-financing may not be feasible, or the wisest course of action, and you’ll have to look elsewhere for financing.
Many businesses choose to obtain loans or lines of credit to start their business; this is also called debt financing. Using debt to start your business will help you retain ownership and control of the company. However, you’ll need good credit to obtain a loan, and you’ll also be saddled with payments during the lean startup times after your business launches.
Alternatively, you could pursue equity financing, and find investors willing to back your new company financially. Equity financing may alleviate the requirement to immediately begin making payments upon business launch; however, you may have to surrender ownership, control, and/or future profits if you take on investors.
Finally, if you want to start a business with no money, you could attempt to secure a grant to get your initial financing. There are billions of dollars in Federal, state, and municipal grants as well as nonprofit and private sector organizations that provide grants to new businesses every year.
You will likely have to write a grant proposal and compete against other startups for grant money (so, make sure you keep your freelance business plan writer’s info handy, since he or she may be able to help you with grant writing as well), but pursuing grants to finance your new business is definitely worth considering.
Forming Your Business
Once you’ve planned out your business and you’re ready to launch, one of the key things you should consider is what form your business will take. In many cases, entrepreneurs form businesses as sole proprietorships, with a single owner and all legal and tax liabilities remaining with the entrepreneur.
If there is going to be more than one owner (due to multiple entrepreneurs or investors maintaining a stake in the company, for example), then the business could form as a partnership.
Many more businesses are formed as corporations or limited liability corporations (LLCs) as well, which affects the level of liability the company’s owner or owners shoulder, as well as the legal liability as well. Every business form has its own advantages and disadvantages so ensure you do your homework to determine the form that will work best for you.
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Start A Business Checklist
- Refine & test your idea
- Write a business plan
- Get financing
- Form your business entity
How To Start A Business Online: Parting Thoughts
If you want to start a business of your own, you can expect plenty of challenges. However, despite the hurdles to make your business successful, being your own boss and pursuing your dreams is a reward in itself. So, take the advice offered here into consideration, and start the legwork required to launch your own business today!
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