After interviewing several young entrepreneurs, I wanted to write a simple guide to starting your own business.
How to Start a Business
Start with an Idea
The first thing you need to do when starting a business is to start with a great idea. It could be something that you are good at doing or something you’ve been thinking of doing for a while. One piece of advice I received from a successful entrepreneur was to write down my business ideas as they came to me. I found that, over time, I was generating lots of new ideas without even trying. When you challenge your mind to continue thinking of ways to make everyday tasks easier or more enjoyable, you’ll be surprised how fast and frequently ideas come to you.
Add Value
What ideas are best? Your business should be one that adds value to the customer. Do I really need another set of knives? Probably not, but if your knives can cut better than the ones I have, you are adding value.
Find a Need
That brings me to the next point. Your business should serve a need. What if I’m a caveman and I don’t use knives to eat? Then your product would not be filling my need. But all you have to do is find the customers that do have the need. That’s the reason that I started this blog. I realized that young adults want to manage their own money, but they may not know where to start.
Write a Business Plan
The next step you need to take is writing a business plan. These are the general questions you’ll need to answer. How will my business make a profit? Who is my customer? When will I break even? How will I get to my potential customers? Inc.com has a really nice guide on how to write a great business plan. Remember that your business plan is a living document and it will change as your business grows and your needs change.
Write a Business Outline
Writing a business outline is a good starting point for writing your business plan. In your business outline you’ll write down every idea you have about your business and the answers to the general business plan questions. Use this outline as a brainstorm where you dump all of the ideas you have or want to have for the business. Then you can organize your thoughts in your actual business plan.
Pitch Angel Investors
Your financials show investors how they are going to make money. You will do this by telling the story with your financials to raise business capital. Investors want to know when you will break even and when they will get back their initial investment. If you’ve seen the show Shark Tank on ABC then you are familiar with pitching angel investors. You need to know your numbers. Deals are made on the numbers first then the business behind it. Without a solid financial plan your business will fail.
Market your Business
Your marketing plan details how you will reach your target customers. It will include the members of your target market and how you will reach them. You will need to conduct market research including taking surveys and polls to gather information relevant to your industry and business.
Set up a website
Your online presence is an important part of your overall branding strategy. Potential customers who are curious about you will usually do a quick Google search to find out more about you. If you don’t take control of your online presence you have no control over what results come up when someone does decide to Google you. I purchased my domain with a coupon I had through GoDaddy and I host the website with Hostgator. I’ve found these services to work well for the many websites that I own. Use the coupon code smallbiz01 to get $9.94 taken off the cost of your Hostgator hosting package.
Start a mailing list
“The money is in the list.” Companies like Godiva, who gives away free chocolate each month to customers on their mailing list, understand this concept. With a targeted mailing list you can stay in touch with your customers. Two popular online mailing software programs are MailChimp and Aweber. Both will allow you to create and design amazing newsletters. You should use your mailing list to provide even more value to your most engaged customers. You could offer discounts or coupon offers specifically to them.
Protect Your Assets
Choose the Right Legal Structure
Decide what sort of business structure you will want for your business. You might be best protected with an LLC, or an S Corp may work better for you. There are different benefits for each legal structure. Consult with your lawyers to get the structure that works best for you.
Get Insured
Depending on what your product is or what industry you are operating in, you will need to get some sort of business insurance. A general liability policy may work for most businesses but you should contact your insurance agent to find out what insurance you will need to protect your business in the event of a lawsuit.
Protect Your Intellectual Property
You should file for patents for any innovative products or processes that you have. You will also need to protect your business name and logos with trademarks and copyrights. The worst thing that could happen to your business would be someone stealing the rights to your proprietary products.
Open your Business!
Congratulations! You are open for business. Now you get to work your business and build an asset that will continue to generate income.
For a more detailed guide, visit the Small Business Administration. They have a step by step guide and links to the resources that will assist you along the way.
What did you do when you first decided to start your business?
Photo Credits: http://www.infobarrel.com/How_to_Raise_Money_to_Start_a_Business
Loading tweets...
5 comments
12 pings
MoneyCone says:
April 7, 2011 at 2:22 pm (UTC -4 )
Love the post! To add to this, there are a number of online resources that’ll take care of legal documentation and walk you through the steps to get your company registered. Around $700 I think, but totally worth it.
LaTisha D Styles says:
April 9, 2011 at 9:24 am (UTC -4 )
I think a friend of mine recommended LegalZoom DOT com. They set up most of their non-profit organization using the documents on their site. Fortunately her husband is a contract lawyer so he was able to look over the rest of the paperwork.
Brian says:
April 10, 2011 at 9:21 pm (UTC -4 )
Hi LaTisha,
Very informative post, branding is very important and adding value is key. A good business always stands out from the crowd.
Yakezie says:
April 16, 2011 at 9:38 pm (UTC -4 )
Hi LaTisha,
Thanks for your tips. What are your thoughts on growth vs. profitability? Sometimes, they are mutually exclusive.
Thanks, Sam
LaTisha D Styles says:
April 19, 2011 at 12:03 am (UTC -4 )
Hi Sam, for a new business, I would say that slow controlled growth would be best. That way costs are controlled and the business doesn’t get ahead of itself. Too much growth can eliminate profits altogether.
Entrepreneur Fridays: Apple Butter Bakery » Financial Success for Young Adults says:
May 25, 2011 at 8:27 pm (UTC -4 )
[...] Start a Business [...]
Financial Success for Young Adults » Entrepreneur Fridays: Lara Jeanneret says:
August 4, 2011 at 10:22 pm (UTC -4 )
[...] Start a Business [...]
Entrepreneur Fridays: Accept Credit Cards on your Phone » Financial Success for Young Adults says:
August 12, 2011 at 10:01 am (UTC -4 )
[...] Start a Business [...]
The Best Way To Build Business Experience: Start A Business! » Financial Success for Young Adults says:
August 14, 2011 at 12:28 pm (UTC -4 )
[...] Start a Business [...]
My Barber is a Multi-Millionaire – Here’s How He Did It says:
August 25, 2011 at 10:20 am (UTC -4 )
[...] costs of the shop so everything he makes himself goes right to the bank. He started off as a young entrepreneur and it’s rewarded him for [...]
Job Hunting Expenses: Tax Deductions For Those Looking For Work — Faithful With A Few says:
August 28, 2011 at 7:00 pm (UTC -4 )
[...] break” actually is. However, if you decide to start your own business and become a young entrepreneur, then there is another set of tax laws that govern your situation.To find out more about deducting [...]
How to Make Extra Money » Financial Success for Young Adults says:
October 8, 2011 at 9:40 am (UTC -4 )
[...] is in need of an extra staff member. Just be careful about meeting and do an online check on the business. You might find an organic fashion blog that is in need of writers or promoters. Craigslist is a [...]
The Best Way To Build Business Experience: Start A Business! » Financial Success for Young Adults says:
October 16, 2011 at 8:29 pm (UTC -4 )
[...] The beauty of an idea is that it’s free. You have to pay for a college education, you have to pay for business start-up expenses, and you have to pay to live comfortably. Ideas, however, are [...]
Entrepreneur Fridays: Apple Butter Bakery » Financial Success for Young Adults says:
November 15, 2011 at 9:13 pm (UTC -4 )
[...] Pickett is the owner and founder of the Atlanta based business, Apple Butter Bakery. Better known as Apple Butter Bakery Custom Cake Shoppe, or ABC Cake Shoppe, [...]
How to Make Extra Money » Financial Success for Young Adults says:
November 23, 2011 at 4:26 pm (UTC -4 )
[...] Start a Business [...]
10,000 Free Tickets to Japan » Financial Success for Young Adults says:
January 3, 2012 at 10:02 am (UTC -4 )
[...] knew that I can quickly purchase domains through GoDaddy and I regularly use the coupon from the How to Start a Business post. I already have a hosting package so I can load everything from my local computer to the web, [...]
Yakezie Challenge & Carnivals - Saving Advice says:
January 15, 2012 at 12:29 pm (UTC -4 )
[...] How to Start a Business (from Young Adult Finances) [...]