How to Start your Business: Six Significant Steps
You might have a great idea, but when it comes to changing your idea into a full-fledged business, it might seem intimidating. You might have a ton of questions in your mind and the biggest question of all might be, “Will I be able to make it a success?” It is no secret how Facebook, WhatsApp, and numerous other tech giants started their journey as start-ups and made a huge success.
We all know that there is no shortcut to success. To do well, you should be willing to work hard, especially in the initial stages. But putting in efforts in the wrong direction will yield you nothing.
So, in this blog, I will discuss six simple steps that will help you build a strong foundation for your business and give you the right direction to move forward.
1) Research about your idea
The first and foremost step of starting a business is to have a thorough understanding of the idea that you have in your mind. You have to make sure that your idea is practical and can convert into a business. For that, you need to conduct proper market research which entails two stages. In the first stage, you have to analyze the data and statistics about your market that is already available. And in the second stage, you have to gather data by conducting surveys and interviews and then analyze them. A correctly done market research will help you get information about the following things:
- Target Market
- Market Size
- Competitors in the market
You will be able to satisfy the needs of your customer and make your business profitable only after having in-depth knowledge about these three areas.
Conducting a competitive analysis of similar businesses in the market is an integral part of market research. Jot down the strengths and weaknesses of each one of them and compare them with yours to see what advantage your product or service offers over them and what are the challenges that you might face from your competitors.
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2) Draft a business plan
After the analysis part comes the part of building a concrete business plan. A well-written business plan must include:
- The purpose of your business: It includes details about the kind of products or services that you are planning to offer. In this section, mention what makes you different from other businesses providing similar products/services.
- Goals: Set your short-term and long-term goals and give details about the strategies and action plans that you will undertake to accomplish those goals.
- Pricing: In this section, first include details about the costs that are likely to be incurred by examining the raw materials required for your product/service and the ways to acquire them. After that, set prices for your goods/services by keeping in mind the profit of your business.
- Financial Plan: Draft a proper financial plan that would include the proposed budget and financial projections. Financial projections forecast your business’s future income and expenses. They are important as they help you see when you may have financing needs and the best times to make capital expenditures. Try to incorporate projected financial statements like balance sheets and income statements in this plan.
- Marketing: Make a plan about how you will be advertising your product/service and how much money will you spend on this.
3) Create your budget and get start-up capital
Add up the costs of setting up the start-up and the ongoing costs like employee salaries, rent to estimate your expenses for the first 6 months or 1 year. After you have created your budget, decide how you will acquire the start-up capital required. There are a lot of funding options available these days. You can apply for a business loan or you can even find an investor. Crowdfunding is also a great way to raise the funds required.
4) Find a brilliant name for your business
Naming your business is a very important step as you cannot start branding your business without giving it a name. Coming up with a perfect name is indeed a challenge. Try not to go for a name that is very difficult to pronounce and which people cannot remember easily. The most significant thing that you have to keep in mind while deciding the name is that it should reflect the intent and vision of your business in a simple yet unique manner. Also, go through the guidelines of the Companies Act 2013 and Companies Incorporation Rules 2014 for naming a company.
5) Decide the structure of your business
There are five types of business structures in India:
- Sole proprietorship
- One-person company
- Partnership company
- Limited liability company
- Private limited company
Each business structure comes with its legal compliance that have to be met. So, when it comes to company registration, it is extremely important to choose the right business structure for your start-up. Go and conduct in-depth research about each one of them and see under which structure your business falls.
6) Register your business
Registering your business is a critical step without which your business cannot move forward. This step might seem daunting at first, but trust me the online mode has made the entire procedure very simple. The registration process will be carried out on the portal of the Ministry of Corporate Affairs. Research thoroughly about all the steps involved and get your business registered!
To wrap up
The steps that I have highlighted here are the essentials of starting a business and form the basis of every business. If you are starting from scratch, following these steps will surely provide you with a direction and help you launch your business.
A young businessman who has been in the line of entrepreneurship for quite a few years. He is an active learner and loves to know more about new technological developments coming up as well as how they can be put to great use to yield better results for society.