How to Start a Business: 16 Steps to Follow
Step by step guides on how to start a business.
Do you want to know how to start a business of your dream? A lot of people like to start a business but they don’t know how to go about it. Starting a business is not that difficult.
You only need to learn the simple steps to follow and commit yourself to doing it. I mean, it is not enough to learn how to start a business. If you know how to start a business and refuse to take the bold steps needed to actualize it, it will not make any difference. But if you can commit yourself to taking one step after the other, you will discover how cheap it is to see your dream of starting a business come true.
Before I go into the thrust of this article, which is to guide you on how to start a business, let me digress a little by sharing these two stories with you. These will help you to quickly take a firm decision of starting your own business.
First story
I worked briefly as a Petroleum Attendant before I gained admission into higher institution. I remember a colleague of mine there whom I used to share my goals with. I told him that I would not allow whatever money I was making from the job to stop me from furthering my education. He also told me he wanted to further his education too. Meanwhile, he had been there for three years before I joined the organization. To cut the story short, I gained my admission and left him there. Any time I was coming from the school, I would check him and remind him on the need for him to quickly go back to school as desired. Unfortunately, he didn’t have the courage to take the bold step. By the time I completed my studies, he was still there working as a Petroleum Attendant.
Second Story
After I had been working for some years as an employee, I felt that it was time for me to start my own business. My job was no longer satisfying. This did not happen to only me. My colleagues at work equally felt the same way. We were no longer as productive as we used to be and I knew the reason. I knew I cannot be productive doing something I don’t enjoy. I believe this applies to many employees too. So, we concluded that we needed to quit our jobs and start our own business. Unfortunately, my colleague was not confident enough to leave the job but I left. It has been five years now that I started my business. My friend is still telling me the same story. It has been one compliant after the other. To worsen the case, the benefits the company offers its staff are not as attractive as it used to be while I was there as a result of economic downturn. Still, my friend is still holding on tight to the job that is not making him happy. In my own case, although there have been challenges, I am happy and more fulfilled. I am learning and growing by the day.
Why do I need to share the two stories above? I don’t want you to just read or learn how to start a business. I want you to make a definite decision and take a bold step toward starting your own business if you know that is what will give you fulfilment.
Generate Business ideas
The starting point for starting a business is for you to generate a business idea. “All achievements, all earned riches, have their beginning in an idea” said Napoleon Hill. There are many ways by which you can come up with business ideas. You can get a business idea by looking at existing business and do the same but in a better way. You can generate business ideas through brainstorming or focus group. Your business ideas can be as a result of your work experience or passion. It can even come as a result of frustration. This should not surprise you. That is why entrepreneurs are considered as solution providers. You should generate as many ideas as possible. “Nothing is more dangerous than an idea when it is the only one you have.” said Emile Chartier. Don’t worry if some of them look foolish or absurd to you. Hear what Albert Einstein said “If at first, the idea is not absurd, then there is no hope for it.” Just ensure that you document every idea that comes into your mind.
Read Also:110 small business ideas that you can do with little capital investment.
Evaluate your ideas
Not all ideas are good ideas. A business idea is good if it meets the needs of people and their purchases would be large enough to sustain the business. You start by asking people if they will buy the product or service to determine whether there will be a demand for the product or service.
Research your idea. See if there’s a demand. A lot of people have great ideas, but they don’t know if there’s a need for it. You also have to research your competition – Magic Johnson.
Be Passionate
If you want to make most of your entrepreneurial adventure, you’ve got to be passionate about what you do. Let the thought of the business consume you. Remember the story I shared above. My productivity was dwindling because the job was no longer interesting. Your business is your life. If you do what you love, money will flow to you.
“Passion is one great force that unleashes creativity, because if you are passionate about something, then you are more willing to take more risks,” said Yo-Yo Ma. Donald Trump put it in another word: “without passion you don’t have energy, without energy you have nothing.
Destroy your fear
One of the reasons many people are yet to start their own business is fear. That is, the fear of unknown, the fear of inadequacies and ultimately the fear of failure.
If you have ideas, you have the main asset you need, and there isn’t any limit to what you can do with your business and your life. Ideas are any man’s greatest asset – Harvey S. Firestone. You can never win a race you did not start. If you are afraid to make a start, your greatness may never emerge.
Be Disciplined
As an entrepreneur, you must learn how to be disciplined. Be ready to do things that are necessary even though they are not convenient.
“To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines,” said Steve Jobs.
Develop Business Plan
If you fail to plan, you have planned to fail. There is a need for you to develop a business plan. It is true that you have evaluated your idea and concluded that the idea is good. Nevertheless, you still need to prepare a detailed business plan for the business. This will save you some stress.
Develop your skill
There is no substitute for knowledge. To this day, I read three newspapers a day. It is impossible to read a paper without being exposed to ideas. And ideas, more than money are the real currency for success – Eli Broad.
From the SWOT analysis in your business plan, you should be able to determine whether you have the expertise and know how required to exploit to make the business idea a success. Besides specific skills that are directly related to your business, if you lack any other essential skills, you should develop yourself in such areas.
Chose a location for your business
The choice of location largely depends on the type of business you do. There are some businesses that you can operate from home. If your business is home-based, you may not need to start searching for a location for your business. However, whether you operate from home or elsewhere, you should ensure that you comply with the zoning laws governing your area. Learn about other factors you need to consider before you choose your business location.
Determine your business legal structure
The choice of the right legal structure for your business is very important as it has both legal and tax implications. Popular business legal structures are sole proprietorship, partnership and limited liability companies. Each business legal structure has its advantages and disadvantages.
Read Also: Factors Affecting Choice of Business Legal Structure
Register your business
You need to choose a name for your business. If you are finding it difficult to generate a business name, you can use business name generators. Some of them will not only suggest a business name, they will help you check the availability of the domain name. Your business only becomes legal after you have registered the business name.
Source for Finance
The first source of finance that will be easily accessible for you is your personal savings. If you are confident about your business idea, you will be willing to invest your personal money into it. If you don’t have enough savings to start your business, then you can consider other sources of finance.
Obtain necessary licenses and permits
There are some businesses which are regulated by laws especially drugs and foods related businesses. You need to apply and obtain approval before you can be allowed to carry on such business. Besides, you need to obtain business licenses and permits from different levels of government such as federal, state and local government.
Register with Tax Authority
One way you can easily run into problem is when you refuse to comply with tax laws. Immediately the registration of your business name is completed, you need to register your business with tax authority. The process will differ from one country to another. Generally, you will obtain (TIN). You will need to make reference to this number every time you remit taxes to the tax authority. It is also expected that you display your Tax Identification Number (TIN) on your invoices.
Open a bank account for the business
One thing you need to do as early as possible is to open a bank account for your business. You should separate your personal expenses with business expenses. If you ask your customers to pay into your personal account, it indicates that you don’t have a structure for your business. For good and proper accountability, your business should maintain its own bank account.
Keep proper accounting records
You should be able to track all income and expenses of your business. You can use simple accounting software to keep your records. This will make things easy for you and you will be able to generate financial statements in order to assess and measure the performance of your business at any given time. If you can’t do this by yourself, you can hire somebody to do the task for you.
Hire the right staff
You will need to hire other people to work with you whether now or in the nearest future. Otherwise, you will over-work yourself and therefore suffer a burn-out. It is important you hire somebody with skills that complements your own. Also, you should familiarise yourself with employment laws and the implications of hiring to your business.
Read Also: Starting Your Personal Business
Conclusion
Now that you have taking pain to read how to start a business, it is very important you start taking the necessary steps. When you take one step, the next step will become easier.