When a person decides to start their own business, they are faced with a large number of questions. Is there any chance of success? What is a business plan and how to write one? What to choose: sole proprietor or LLC? What is the easiest way to pay taxes? We tell you what an entrepreneur needs to know to start his own business.
Evaluate the feasibility of the idea
So far, you only have one idea, so it’s worth starting with. To assess whether it is worth starting a business or not, answer a few questions.
What do I offer to clients?
Try to make an unbiased assessment of whether customers need your product or service and how it will differ from similar products and services. Make sure you look at what your competitors are offering and assess what they are doing well and what they are not doing well; Try to find your niche in the market.
Who will I offer my product to?
Find your target audience – those who might be interested in your product. Find out what your explicit or latent need is. You need to understand the problems and desires of the client, the characteristics of his behavior and character, imagine situations in which he may need your service or product. This will help you in all stages, from the choice of venue to advertising and promotion.
Where will I sell my product?
Maybe your audience is used to buying everything on the Internet, or maybe your product needs to be touched or tried, then you will need a warehouse. Where should it be located, downtown or in a residential area? If you are selling your product exclusively online, consider shipping.
Consider what price the product will sell for. Estimate the approximate cost of the goods, analyze at what price they will be ready to buy your goods. Remember, you must cover all costs and make a profit. At the same time, it is important not to make an excessive margin on your products or services, otherwise, there will be no demand.
If you end up evaluating the business idea as promising and capable of generating profit, test it out on your target audience. After the first few tests, your idea can be transformed a little more.
The result of this initial analysis should be a business strategy that helps you turn an idea into a concrete action plan.
Write a business plan
After you have worked out the overall strategy, you need to calculate everything in detail. A business plan will help you with this. You and your business partners, as well as potential investors or lenders, will need this plan.
The business plan should contain a detailed description of the product with options for further transformation, market analysis with a description of all groups of competitors, and characteristics of potential buyers.
Without numbers, a business plan will certainly not be convincing. You need to understand in advance how profitable the business will be. Therefore, a plan must include several mandatory components:
- Production plan and calculation of the cost of goods or services.
- Promotion plan and estimation of advertising costs and other types of communication with customers.
- An organizational plan and an assessment of employee salaries, as well as external services (eg, courier).
- A financial plan that takes into account all sources of funding and income, as well as everything, including one-time expenses and taxes.
As a result, the business plan should show how much money you need to launch the project, when it reaches self-sufficiency, after what time it will be possible to return the invested funds, and what profit can be expected.
Consider attracting investment
Now you can think about how to attract money to your business. This can be done in different ways:
Seek government support: If your business is important to people in your region or even across the country, the government can help you with collateral, cheap loans or loans, preferential leasing, and rent.
Raising money through crowdfunding: If you are sure that your project will be interesting and useful to a large number of people, you can try to reach them directly through special Internet sites. The crowdfunding format will depend on the type of business.
Attract an investor: Private investors sometimes invest in startups, most often in technology.
Register a business: Intellectual property is suitable for those who have a small business, for example, a small shop or a production. It is a company that you can open yourself or together with partners. Suitable for those who are planning a business with high turnover and for those who are going to transfer large amounts by bank transfer.
Take care of the details
Once you have decided on the main questions, there are many more details to cover.
- Open an account at the bank.
- Verify the facilities’ compliance with fire safety requirements.
- Clarify sanitary requirements if you plan to work with food.
- Study consumer rights.
- Verify that your product meets government standards.
- Find out if you need to certify, declare or register the products.
There are many challenges for any aspiring entrepreneur. But his business, which will bring you money and satisfaction, is worth it.