A lot of people have fancied themselves not cut out for the average nine to five, and would love to try out something both mentally and physically rewarding, not neglecting the financial aspect. Being your own boss, having flexibility with your schedule and keeping more of the financial rewards that come with business ownership, are all good reasons to own your own company.
“It is always the start that requires the greatest effort.” – James Cash Penny
“Building Oracle is like doing math puzzles as a kid.” – Larry Ellison
But a lot of would-be entrepreneurs get to find out along the line that it is not all roses, and that their projections are way off the mark. According to the Small Business Association, two thirds of all startups survive at least 2 years and approximately 50% of these startups survive up to 5 years.
“Success is a poor teacher. We learn the most about ourselves when we fail, so don’t be afraid of failing. Failing is part of the process of success. You cannot have success without failure.” – Rich Dad
One of the reasons why businesses fail lie in the planning and execution of such venture. There are so many things you have to consider from coming up with an excellent idea to registering a company, all the way to business planning, fundraising and much more.
“The business empires built by successful entrepreneurs were erected on the foundation of past failures.” – Ajaero Tony Martins
a) Thomas Edison failed 10,000 times before he invented the incandescent bulb and he went on to build General Electric (GE); one of the most powerful companies in the world. This is what he has to say;
“I have not failed. I have just found 10,000 ways that won’t work.” – Thomas Edison
b) Henry Ford had two business failures and with the experience gathered from those business failures, he went on to build Ford Motor Company and became one of the richest men in history.
“Failure is just a resting place. It is an opportunity to begin again more intelligently.” – Henry Ford
C) Sir Philip Green had four business failures before he hit his first million at the age of 33.
d) Robert Kiyosaki had a major business failure when his Nylon and Velcro wallet company crashed; and with the experience from this failure, he went on to build the Rich Dad Company.
“Losers quit when they fail. Winners fail until they succeed.” – Robert Kiyosaki
“I can accept failure, everyone fails at something. But I cannot accept not trying.” – Michael Jordan
This is why setting up a business is not for the faint of heart. If you want to try out the entrepreneurial route and want to start a business instead of seeking for paid employment, here is a step by step format of how you can start a business from the scratch.
19 Steps to Starting a Business from Scratch as a Beginner With No Money
“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” – Aliko Dangote
Starting a business is a process that requires an enormous amount of thought and careful examination. First, you need to find out why you want to be a business owner. Are you genuinely interested in running a business or are you just trying to follow a fad?
Before you start a business, you should be absolutely clear about why you are doing it. That may sound obvious, but there are actually many reasons why someone should choose to turn their back on the security of a job and career for the uncertainty of starting a business. So the clearer you are about what exactly you are trying to achieve, the better chances you have of achieving it.
Next, take a good look at your strengths, weaknesses and skills. This will allow you to start thinking about what you can do and what you cannot do. It is important to start here even if you already have world’s best business idea, because you might not have the skills or personality traits to enable you to make it into a successful business.
“The height attained by great men is not by sudden flight. For while their companions lay asleep, these men were toiling in the night.” – Anonymous
You may be good at public speaking which can help when raising money, but bad at accounting which just means that you’ll need to find some kind of help with that area of the business. The crucial point is to understand yourself and your team, and if you are well suited to any business ideas, areas of business or specific types of business. It allows you to start coming up with ideas and narrowing down what businesses you could start.
Logic dictates that if you want a successful business then you should begin in an area that you already have a passion for. To start figuring out what businesses or areas of business you are passionate about, you need to start by thinking about the areas, activities, and things you are passionate about. That is, what interests you and what do you have strong opinions on, for example:
- Someone who loves to hike might consider setting up a travel business.
- Someone who loves Lego might think about a toy or construction business.
- Someone who spent their whole life with a passion for music might start a company related to sound.
2. Read and Learn as much as you can about what it takes to start a business
“I started and built a business from scratch. One thing I love about the entrepreneurial process is this; no matter my level of fame and success today, the thought of my early days in life, when I had nothing; will always keep me humble.” – Ajaero Tony Martins
Research is crucial when it comes to starting a business. So much can be learned and extrapolated from just a few hours of Googling, surfing the Internet or reading related business books. Do your homework thoroughly and you’ll be so much better off. In fact, it’s a necessary first step to determine the viability of your business idea.
It’s important to be honest with yourself. If it seems your idea has already been done, can you do it better or offer it cheaper than the competition? Ask yourself the hard questions and get feedback from associates and mentors. Anybody that neglects to do the ground work may likely find out too late that they have made an avoidable mistake.
When it comes to starting a business especially if you are a novice, one thing you should keep in mind is that you need help. By this help, we don’t mean financial. You can have a bag of money and still wreck your business. Right now, what you need more than anything else is the right kind of people to help you through the journey.
These people can be business mentors or even a business coach. Some entrepreneurs would decide to take on partners who would also play the role of a business guide or coach. If you start your company with co-founders, you should agree early on about the details of your business relationship.
Not doing so can potentially cause significant legal problems down the road. In a way, think of the founder agreement as a form of “pre-nuptial agreement.” Here are the key deal terms your written founder agreement needs to address:
- How is the equity split among the founders?
- Is the percentage of ownership subject to vesting based on continued participation in the business?
- What are the roles and responsibilities of the founders?
- If one founder leaves, does the company or the other founder have the right to buy back that founder’s shares? At what price?
- How much time commitment to the business is expected of each founder?
- What salaries (if any) are the founders entitled to? How can that be changed?
- How are key decisions and day-to-day decisions of the business to be made? (by majority vote, unanimous vote, or are certain decisions solely in the hands of the CEO?)
- Under what circumstances can a founder be removed as an employee of the business? (usually, this would be a Board decision)
- What assets or cash does each founder contribute or invest into the business?
- How will a sale of the business be decided?
- What happens if one founder isn’t living up to expectations under the founder agreement? How will it be resolved?
- What is the overall goal and vision for the business?
- If one founder wants to leave the business, does the company have the right to buy back his or her shares? At what price?
Business skills are skills that help people understand consumer and organizational behavior and the ability to use this information to promote the success of the company. Business skills are often considered soft skills and may include team management, leadership and communication skills, sales and marketing skills, etc.
You need to develop a couple of these skills if you want to be successful with your business. This is because, as a startup, you may likely take up a lot of roles by yourself before you start making enough money to hire professionals. So you need to build yourself up in these skills before you think of starting your business.
A business model is a description of how your business makes money. It’s an explanation of how you deliver value to your customers at an appropriate cost. How are you going to explain to anyone what your product does/intends to do and how it is going to add/create value for customers as well as the company, if you don’t have a business model? There are various types of business models you can choose for your business.
Coming up with any business idea is relatively easy, but coming up with a great business idea is hard. It is critical to your success that when starting out you explore as many ideas as possible before deciding on the final one you will take forward. It is your business idea that will succeed not necessarily your business.
Start by thinking about what significant problems you could solve and how. Many successful companies started out on a mission to solve real problems that affect millions of people and provide a solution through their products and services.
If your business idea involves a new product or service (or even an enhancement to an existing product or service), it needs to be evaluated. This is technically called market research. There are firms that specialize in doing market research for new products or ideas, but if you are on a tight budget, you can do this yourself.
After several rounds of market research with different groups of people, you should see patterns emerging about things that they both liked and didn’t like. Use this information to tweak your product or service and do another round of market research.
You should look for areas where you can provide significant savings to the customer vs competitors. These types of businesses grow incredibly fast, particularly during recession. Keep in mind that you’ll never come up with a universally loved product, your job is to produce a product or service that appeals to the broadest range of your target market.
Once you have a few thoroughly researched business ideas, it’s time to test quickly and validate if your proposed business can work in the real world. Many entrepreneurs who skip this stage, end up wasting much time chasing ventures that would never work.
When testing a proposed business, you can assess the performance of any venture in different ways, so it is important to initially work out what you want to measure to gauge success or failure. Here are some suggested measures to get you started:
- How much revenue could you generate/How many products can you sell?
- How much customer interest can you generate?
- How much press/notoriety can you generate?
If you have a services or a specific solution based business and your primary sales channel will be online, this is often the quickest way to test:
- Set up a quick one-page website.
- Make it seem and feel professional.
- List your services/solutions.
- Add a contact email.
- Find the e-mails of ideal potential buyers and contact them about your service.
- Then manage communications and see if anyone is interested, if not ask why and be persistent.
- Set up a market stall and sell
If you are starting a product based business and your primary sales method will be face-to-face, a cost-effective way to test your business is to build initial versions of your product and book a table at your local market or festival. You can gauge via sales and customer feedback though this method.
When starting out, your product or service has to be at least good if not great. And the only way to find out is if you have a prototype. You can build a prototype for people to use, touch and look at so they can get a feel of it. If a prototype is not possible or it’s a service business, then offer a highly descriptive presentation of the business plan complete with its unique benefits and how it’s different from the competition.
Having a “beta” test product works for many startups as they work the bugs out from user reactions. Don’t drag your feet on getting your product out to market, since early customer feedback is one of the best ways to help improve your product.
Coming up with the perfect business name can be hard, especially if you want a .com domain to go along with it. You can use a free business name generator to help you come up with a name. Most brands try to include their keyword in the brand name, such as Fashion Nova. However, some brands create a unique name, such as Oberlo.
The business name you choose should be catchy, memorable, easy to spell when heard, have available usernames and a domain, and be concise. Sometimes the best naming ideas come after bouncing names with a friend as a second opinion helps give you a different perspective. So feel free to get a second opinion if you feel stuck when choosing the right brand name.
Here are some basic tips on how to name your startup:
- Avoid hard-to-spell names
- Don’t pick a name that could be limiting as your business grows
- Conduct a thorough Internet search on a proposed name
- Get a “.com” domain name (as opposed to “.net” or another variant)
- Conduct a thorough trademark search
- Make sure you and your employees will be happy saying the name
- Come up with five names you like and test market the name with prospective employees, partners, investors, and potential customers
10. Decide on a Business Structure and Register your Business
You have many options when it comes to choosing a business structure. Discussing them with your accountant or financial adviser is really the only way to know what’s right for you. But just to give you a quick rundown of the types of business entities and their pros and cons we will briefly go through them:
You should know that there is no simple answer to which structure is best for your business, it depends on your business operation and needs. For example, if you:
- Plan to grow your small business beyond yourself (one person) and then sell it, then a Private Limited Company would likely be the most suitable structure.
- Plan to only operate as a one-person business for the near future, then a Sole proprietorship would probably be the best structure.
- Plan to start a business that has a significant amount of senior management, capital and that deals in services, then a Limited Liability partnership would be the best choice.
A business plan is a great exercise for sorting out your thoughts and it allows you to plan your business in a structured way. Basically, you can think of a business plan as an outline or the blueprint of your business. Your business plan should include many key elements and follow a simple and clear structure.
Always aim to create a business plan that anyone could pick up and understand what your business is, what its objectives are and how you are planning to get there; this means breaking it up into clear sections. A good business plan should have the following elements:
- Executive summary
- Contents page
- Business model and products/services
- Customer, market and competition
- Marketing and sales
- Finances and projections
- Business plan summary
This section should summarize your entire business plan through key points in bullet point format and provide contact details so a reader can easily get in touch with you. Create your initial document in Word, Google docs or Open Office, these tools are easy to use and you’ll end up with an easily editable file.
You can also use Excel to create and update a clear structure, this helps to give you a good overview of the plan. Make sure to use a theme that is consistent throughout the document regarding fonts, colours and design features. If you must give a copy to an external party, always export the file to PDF, and make sure to have professional graphics in place if desired.
Before you can start generating any revenue or making purchases, you are going to need to open a business bank account to send, receive and securely store your businesses capital (money). It is essential to select a bank and business account carefully as it is very likely you will be with the chosen banking provider for the life of the business.
You also must decide what type of business account or accounts your set up. If you have the wrong type of account, it can significantly affect your cost of business banking. It will take you a bit of time to gather information on bank accounts and compare it, but it is worth doing as it can save you a lot of money, time and headaches in the future.
Once you are a few months or years into trading, it can be challenging to change banks and even to change your accounts, as you will likely be processing many payments and purchases through your bank and accounts at any one time.
As you are setting up your business, you need to start thinking of the location you will be operating from. Apart from working from home, there a few different options for entrepreneurs looking for space to start and run their businesses.
Rent a co-working space
Co-working spaces allow you to flexibly rent office space or an individual desk at a relatively low cost compared to traditional serviced or private office options. They also offer an environment designed for start-ups with a great community of like-minded entrepreneurs.
Accelerator programs provide seed investment, mentorship and office space for a limited time to start-ups and other small companies. If you are a technology business there are many accelerators where you could apply for in many major cities in the UK.
Incubators are effectively low-cost office space that offer some level of community and network. Non-for-profit companies, charities or universities typically run them.
Rent from another local business
Many large to medium sized businesses that find they have excess space are often open if approached by a smaller company about renting unused space in their premises. It is a great source of extra income for the landlord business and often a flexible renting agreement for the tenant business.
14. Buy the Needed Equipment, Software and Office Supplies
Getting the basic essential setup for any new business is not glamorous, but it is very necessary. You need to start looking out for equipment necessary to your business, required software and office supplies. When it comes to sorting out the internet, phone, utilities or purchasing technology among many other things, here’s a quick guide to getting the essentials right.
Set up your business broadband
Fast and reliable internet is a necessity when it comes to running a business. Whether you need to sell online or communicate with customers, the internet is a vital component for most new businesses. Here are some guidelines for choosing a secure, reliable and fast internet provider and package:
- Make sure your connection will have a minimum of 20mbs download speed and 6mbs upload speed (Broadband or Fibreoptic).
- Check reviews online of each company and the different tiers/types of internet packages they offer.
- Make sure the contract length is no longer than 18 months (you usually negotiate heavily when your contract comes up for renewal, lowering the cost).
- Verify that the company has a responsive customer service team rather than an automated machine or poor customer service.
- If you live or work in an area where broadband or fibre is weak regarding internet connectively or it doesn’t connect at all, consider a 4G internet contract and an antenna as an alternative solution to get fast and stable internet.
Having a landline number for your business is still a necessity for having a legitimate business image from the start and for having a fix and reliable number where customers can reach you on. If you own or rent a private office, it is easy to set up a business line with your phone package.
15. Setup your Office or Business Facility
Before even looking for office space, you may want to make a list of everything you will need in your new office, from desks and chairs to computer hardware, as well as any tasks like setting up your internet connection. Knowing your business needs will help ensure you choose the correct office size and location to support yourself and team members who share your workspace.
Here are the common items most small business offices need:
Consider the best office desk to suit your work needs and office layout.
There are three common types of chairs you may want to consider.
Determine how many and what kind of computers you’ll need.
Determine whether you need any new business software.
Find an internet provider with adequate speed and reliability.
You may need desk phones, cell phones, and conference phones.
Decide whether a standard or voice-over-internet-protocol (VoIP) phone system is best.
Consider what other services and supplies your office needs. For example, you may need to set up an alarm system, a phone answering service, or even credit cards for your employees. Many of these are optional based on your business model and where your office is located.
Here are some of the more common optional office services and supplies:
Consider whether you need a security system or video surveillance.
Set up an after-hours answering service, or use a service like Ruby Receptionist to save on hiring someone to answer your phones.
Amazon is a great place to order supplies because they’ll deliver right to your office, saving you time. Consider copy paper, desk organizers, and recycling bins.
Bank accounts and credit cards
You may want to set up free or low-cost bank accounts, as well as determine whether to provide credit cards to managers or sales reps.
A time clock can keep track of who’s on site as well as hours worked. And most, like Homebase, can interface directly with your payroll software.
- Do you hate sales and cold calling? Great! There are people who love selling and wouldn’t want to do anything else.
- Bored to death with accounting? There are a ton of small accounting firms out there that will take care of that for you.
- What about marketing? You can hire someone in-house or out-source that too.
Your job is to keep on top of all the different aspects of the business to make sure they are all running smoothly and getting the results you need. If not, it’s your job to figure out the problem and implement a solution though hiring right.
Launching a business is an exciting time for an entrepreneur. During a grand opening, new businesses introduce their products and services to potential clients, vendors, suppliers, investors and the surrounding community. Grand opening events are designed to leave a memorable impression on guests.
To get a great outing on your great opening, you have to apply several strategies. Host a small, intimate cocktail reception to introduce and celebrate your new business. Publicize the opening of the business on websites and in publications that target your ideal clients.
Invite the community to come and celebrate your the opening of your business on a designated day or weekend. Contact and join the business associations in your area once your business is ready to take clients. Provide useful, engaging information on your site that encourages visitors to bookmark your page. Announce the grand opening of your business by advertising online and offline.
Whether you are a retail store, a chemicals company or a modelling company having at least a basic website is a basic marketing tool in the 21st century, customers expect you to have a website and expect to be able to find it easily. Your website should:
- Include and show your company/business details including address, phone number, name, and logo (if you have a limited company number it is also a legal requirement to list it here).
- Provide a clear description of what your business is/does.
- Provide details of your products, services, and
- Provide a business e-mail or contact form that enables prospective customers/outside parties to reach you easily.
- You can add many more things to your website, this is just the basic information you need to include.
Creating a website is not nearly as complicated as you might think it is. There are many different types of software, website builders and helpful information that allow you to build a simple website for your business. Once you have a website, you are going to need a professional e-mail address where prospective customers and external parties can reach you.
If the business is to become successful, you must become a great salesperson. You are going to have to learn how to “sell” your business—not only to customers but also to prospective investors and even to potential employees. It’s important to be positive, trustworthy, and to learn how to listen. You must practice your sales pitch, get feedback from a variety of people, and then refine your pitch.
Even if you are not naturally an extrovert, you need to show confidence, follow up, and ask for the sale. Again, you have to always feel the pulse of your business. Have your eyes in every department, especially in marketing and accounts. Equally take care of your clients so they keep coming back.
- How to File a DBA in Los Angeles (Requirement, Cost, Fees & Steps) - April 3, 2021
- How to File a DBA in Florida (Requirement, Cost, Fees & Steps) - April 3, 2021
- How to File a DBA in Pennsylvania (Requirement, Cost, Fees & Steps) - April 3, 2021