4 Key Steps To Starting Your Own Business
We’ve all had the classic “lightbulb” moment at some point.
Whether it was a crazy invention that popped into your head, a new product for the industry you’re in or a game-changing app, most of us have thought of something at some point in our lives.
Many people will abandon their business ideas due to simply not knowing where to start, what to do or how to fund it.
But where there’s a will, there’s a way.
Here are the first four key steps to starting your own business.
1. Research and learning
If you can, speak to as many start-up business owners, and ask them one simple question: “How much of what you now know, did you know when you started?”
Chances are the responses will be something along the lines of “not a lot”, “a fraction” or “barely anything”.
Not knowing things in business will be one of the first tests as a start-up entrepreneur as you need to be familiar with everything. So, if you’re reading this, chances are you’re already researching, learning and adapting to the new set of challenges before you.
Give yourself a pat on the back!
The most successful businesspeople are quick and efficient learners. Longevity in business is all about adapting to new trends, technologies, markets and opportunities. To adapt, you need to be able to research, listen, learn and execute.
Plus, this skill isn’t just for starting your own business. The ability to effectively research new topics of interest is a critical skill to practise as it will help you as you enter the ever-evolving world of business.
As you start your business, you may not know specifically what you need to learn, research or develop knowledge upon, until you need it most.
For example, you might know how to set up your website and your social media pages, but you may need to research how to add customised social buttons to your site.
Take each day as it comes, and if you feel like you’re out of depth, change that. The Internet is a chaotic fountain of knowledge, and it’s at your disposal.
So, you’ve looked further into your idea, and you’ve found out that there’s a solid chance you’re onto a winner.
Next up, before we get deep into the exciting stuff like branding and creating your MVP (minimum viable product), it’s worth putting in the necessary prep work to save yourself getting carried away.
In total honesty, this isn’t a one-process-wins-all situation, as many entrepreneurs will run their preparation stages differently to others.
However, as a few key pointers, look at:
- Creating your business plan– be prepared to constantly adapt and change this
- Cost analysis– how much your product will cost to make
- Product value potential– how much your product could sell for, once traction has been gained
- Penetration pricing opportunity– a lower price at which you could provide your product/service to a new market, to gain exposure
- Purchasing your domain name/web hosting
- Registeringyour limited company
- Voluntary VAT registration– if you’re solely looking at suppling a product/service to businesses
3. Startup execution
If you’ve ticked off our first two tips from your list, you’re into one of the most exciting parts.
You’ve planned your first steps, you’ve got a great idea and now you get to see everything come together for the very first time.
Here’s a quick checklist for start-up execution:
Branding and website development
As a business, if you fail to offer product or service information online you may struggle to gain initial traction. After all, if something isn’t available online, you’re likely to think it doesn’t exist!
Focus on developing your website and creating a memorable, modern and consistent brand; one that you can forever be proud of.
It’s critical that your website is optimised for mobile usage as across many sectors, mobile overtakes desktop traffic. Not only will this help your search engine results page (SERP) rankings (Google will start to love you!), but you’ll see a far greater engagement with your website from your users.
Creating a prototype or minimum viable product
Based upon your ideas and research into possible suppliers of components to build or develop your product or service, it’s now time to generate your first product.
It’s the day you turn your dreams into a business reality (sounds cheesy, right?).
In all seriousness, this step is incredibly exciting. It’s also one that can make or break a startup business.
If you decide to dedicate most of your budget to your first order with your new suppliers, and the components you require turn out to be the wrong size/type/option for your product, you’ll be left with a large amount of obsolete stock and an empty bank.
A total nightmare.
A 3D printing crowdfunding project failed to launch for this very reason. With roughly £3 million funded, components were bought all at once, with little planning. It’s safe to say, you can guess what happened. Multiple unhappy investors.
To avoid this, work with each supplier to generate a small batch of products initially, from which you can run testing upon. Then, go through quality assurance, check and approval processes.
Once everything has been placed together, you can celebrate your first MVP. This states that the product is in a position from which it can be sent to market, but requires refining and developing to be the finished option.
Having a life-changing idea for a business can be fantastic, and soul destroying at the same time, depending on which scenario you find your first-time-entrepreneurial self in.
An amazing idea, without the funding to take it to market can render you hopeless, as you feeling you’re losing the race to push to market such an incredible product or service.
Having an amazing idea, with funding, can be the most exciting time of your life, and it’ll give you the ability to instantly crack on with your plans that you’ve prepared.
There are multiple ways of funding your organisation, all of which require the necessary research, organisation and preparation of their own.
Private investors, also known as ‘Business Angels’ often invest into start-up businesses, in return for a portion of equity (a share) of the business.
Typically, private investors will invest anywhere up to £150,000-£250,000.
For larger investment requirements, Venture Capitalists (VCs) will get involved, typically with values of anywhere from double, to triple figure £millions – although don’t get too excited here as VCs usually look at pre-established companies with proof of traction. Usually.
Other options could be crowdfunding platforms, business bank loans or simply self-funding from either personal savings, family, friends or acquaintances. Either way, if you feel you need to look down the financing route, there are multiple options to look at.
4. Expectation and patience
As a new start-up entrepreneur, with your (almost) finished product in your hands, and the ability to produce multiple units, you’re probably feeling on top of the world.
Enjoy, cherish and remember this moment. We’d love to say it lasts, but as an entrepreneur, you already know this isn’t always the case!
There’s a lot of entrepreneurial-themed click bait floating around the Internet at present, and so managing your own expectations is essential.
It doesn’t come all at once, it takes patience, maturity and awareness. The millionaires you follow on Instagram are probably leasing their Lamborghinis and the ‘make £X,000/hour’ schemes are probably misleading.
Nothing happens overnight, we all know this. Unless you’re WhatsApp, which was acquired for $19 billion by Facebook, after being just 550 days old. But that’s a rarity.
Triple the amount of money that you’re saving for a ‘rainy day’ in business, triple the amount of time you feel it’ll take before you’ve hit your long-term goals.
Ignore that friend that promises you a certain monthly wage with their ‘guaranteed earning scheme’.
Ignore that part of your brain that’s asking, ‘where’s my Ferrari?’
Earning your exposure and respect in an industry, depending on how saturated your market is, can take a substantial amount of time, patience and maturity.
Be patient, be respectful and learn along the way. Whatever is worth having, will take a long time to build up.
Never burn bridges and always focus on what your target market is asking for.
Be prepared to take a personal financial hit and be prepared to work all the hours you can — although this will come instinctively. If you have enough work to take you into the early hours of the morning to it’ll increase the value of your business, as an entrepreneur, you’ll be hard-wired to crack on.
Businesses fail due to impatience, immaturity and lack of persistence. If you’ve planned for your success, been confident with your product/service development, and if you have a certain level of funding to place your organisation within your target market, you’re on to a winner.
The stages ahead of you contain two things. Learning, and adaptation. Enjoy the journey ahead, and stay focused.