Starting a business is a daunting prospect for any new entrepreneur. A common question is, where do you start? Fortunately, we’ve put together a quick checklist to help guide you through the process for formulating and creating a new business.
1. Generate a great business idea
Every great business starts with a great idea, although that idea might pivot and change over time; in the beginning, there is always an ‘aha’ moment where something clicks. How do you come up with that idea? For some, like Sir Isaac Newton, an apple will fall out of the sky, for the majority of us, this is where the hard work begins.
To begin to generate a business idea, you should:
- take note of your skills and passions, in particular, what type of businesses might suit you as a person and a professional;
- look for opportunities to solve both common and new problems for businesses, people or society as a whole: innovation is the keyword here;
- identify areas where you can provide a better solution than those available in the market;
- if all else fails, look at where can you take an existing business model and do it better and cheaper than competitors.
Generating a great business idea usually takes time, and it’s not something you can force. Be prepared to spend at least a few weeks doing your research and exploring ideas.
2. Decide on a name for your business
This might seem a premature step, but generating a business name or at least a working project name is incredibly important. Psychologically speaking, names have power, and giving something a name makes it both real and important in the human mind. You can either create a short codename, or pause and decide on a final business name now. You can also take a shortcut and use a business name generator.
3. Research your market and test your business model
Now it’s time to see if your idea stands up to research and testing. At this stage you should:
- thoroughly research your market (competitors, features, structure);
- define the demand for your product or service;
- be able to detail and understand the demographic of your customers;
- road test your business model in hypothetical, but realistic, scenarios to see if it will work.
If you have access to an experienced entrepreneur (ideally in the field you are planning to start in), it is well worth asking them to tear apart your business idea completely. If by the end of that conversation, it stands up to scrutiny, it’s much more likely you’re on to a business premise that could work.
4. Decide on your business structure
This is the legal structure of your business. Most new businesses will decide on a Limited Company or Sole Trader status as their structure; there are advantages and disadvantages to both. What is right for your business will entirely depend on your specific situation, so go away and do further research on business structures.
5. Plan your finances & funding
We cannot stress this enough. If you don’t already have a reasonably good understanding of business finance, go and learn. Beyond learning, you should:
- create a basic cash flow forecast and analysis for your business;
- set up essential accounting software, systems and practices;
- create a plan and execute to source funding or finance if required;
- define your tax and accounting responsibilities (set reminders and deadlines for these).
Business finance is often one of the areas that new entrepreneurs overlook, and it can cause a financial or legal headache down the line, caused by not understanding it correctly. Make sure you have a strong financial understanding of your proposed business and a clear plan in place to manage finances.
6. Create a sales and marketing strategy
Without customers, you don’t have a business, so now you need to define how you reach and sell to those customers, starting with:
- an improved analysis of your target market, customer demographics and groups;
- an outline plan of the marketing channels you’ll pursue;
- a clear marketing strategy and tactical list of what you need to do;
- a sales management system and get your CRM ready;
- a defined brand;
- a website (if required).
It’s important not to overthink this stage: your sales and marketing strategy will evolve quickly as your business does, but you must have a clear idea of who your customers are, how to reach them and how to sell to them.
7. Create your product/service
You’ve figured out who your customers are and how you plan to reach and sell to them. Next, you need to figure out how you create and deliver your product or service. You should start by:
- mapping out/describing what your product/service is;
- define how you will you deliver it to customers;
- what you will need to provide your product/service.
Take some time here and map out processes and projects required. You will often want to build out a plan here to create a Minimum Viable Product: this framework and others will help you greatly in this area.
8. Start thinking about HR
Again, this is an often neglected area early on, but most businesses require people to expand and grow. If this is you, then you should start thinking about how you plan to manage, train, recruit and retain your team.
Even if you are a one-person team, you need to have a clear plan and systems in place to manage yourself in terms of productivity, morale and much more. This is one area where there is no limit to the amount of reading you should do. There is no more important skill to learn as a business owner than that of how to manage yourself and others.
9. Get the essentials out of the way
The essentials are generally dull things that are often overlooked and incredibly important. For instance, broadband, electricity, an office chair, business stationery and the list goes on.
To figure out what you need, sit down, make a list and acquire the absolute minimum you need to start.
10. Formalise your business plan and set clear goals
Once you’ve got to grips with the fundamentals of the business you are planning to start, it’s time to formalise everything above in a business plan. It does not have to be 50 pages, but it should give a clear overview to anybody who reads it of what you are planning to do and how. In addition, a business plan, contrary to popular belief, is not a static document. As your business changes, it will change (often this is reflected in management/project management systems).
Now you have the above worked out, it is time to set SMART goals for your business, so you have something to aim for which allows you to track your progress and adjust accordingly.
One final note, do you want this?
Starting, managing and growing a business is incredibly difficult, but it also can be the most rewarding journey you could ever embark on.
Now, if by the end of this article you are not sure about starting, take five minutes. At the end of that five minutes, ask yourself seriously if this is what you want to do. If the answer is yes, then good luck, and get to work.