How To Start Your Business? The Idea, Financing, Business Plan, And Distribution Channels
Running a business means being in charge of your life, being responsible for your success, developing yourself daily, living in a financially comfortable environment, and multiplying your net worth. Even though business has a lot of advantages, you can face a lot of questions. How to start my own business? Where to find funds to finance my company? How to choose a successful business idea? In this article, we tried to solve the most common issues that will help you start your company.
The Idea For a Business. The Very First Step To Create Your Business
When you are making up an idea, the foremost and most realistic solution is to do things you can or love the most. Keep in mind a simple rule: if there is something that you see in a showcase or something that requires employees, you can work with this thing as an entrepreneur. This rule works almost in every case.
To start your business, you need to think about the implementation of your business idea. Think about the unusual things that you will offer. Don’t forget to compare your prices to your competitors’ ones. And think about finding clients. If you have no idea to start your own business, you can use tips to find them.
There are thousands of minor details in your daily routine. And at least one of them makes you feel irritated. Think about this issue and try to find solutions to solve it to get rid of such discomfort. This is it! Your business idea. But you will have to implement it yourself and try to find a realistic solution.
For example, you have a cat who really loves playing. But he doesn’t enjoy the toys you bring him. He prefers to play with cardboard boxes, ripping them apart. The solution is simple. Make stylish and interesting toys for animals using cardboard. If your region has no such goods and no possible alternatives, but there are many people who would like to make their pets happier, you have an excellent opportunity to start your business from scratch and make decent money.
You have a nice job, but still, a lot of corporate rules and unwieldy bureaucracy. Analyze the processes of your business, such as HR, finances, marketing, sales, and others. Think about ways to make your colleagues happier and reduce costs and improve the quality of the goods and services. You will see space for your own business.
For example, your employer pays for lunches, but they are not better than low-quality supermarket food, and the taste is pretty savorless. Think about making a two-stage meal. The first one contains sauces, toppings, and special seasonings. The second one contains base meals and main courses. Employees can order the main course, while all the toppings can be used to enhance the taste in a way they like.
Almost everything that surrounds you hasn’t been perfect from the beginning. Clothes, furniture, services, and electronics were tested and improved with the time flow. Before the smartphone you are used to, there were a lot of devices, such as PDAs, tablets with PC OS, organizers, communicators, video players, and portable consoles. People faced modern smartphones only when technologies grew up and were combined with convenient management.
You don’t need to try some glorious ideas from the beginning. Try using the following rule for finding business ideas. For example, you are an experienced video maker and really love family events. But you don’t want to be a wedding videographer. Make up an educational course combining video production basics with wedding video technological aspects. This way, your clients will participate in records and work with you after studying.
We know a lot of successful companies not only because they produce something, but because they use unique ways to develop their products. The most obvious example is modern taxi services. Private taxi services have been available for more than 100 years. But for now, the car will wait for you after you do several taps on your smartphone screen. And now people can order food using a smartphone. This is the method of “the Y approach in the X niche” for the creation of business ideas.
For example, there are anti-cafe conceptions. This is a place where people pay not for food and drinks they have, but for the time they spend in the restaurants. In fact, you just pay for different entertainment you get there. With the same idea, you can create an anti-coworking. You will lower the rent price, depending on how much time people spend in your coworking. Your clients can’t work all the time, so you can offer different paid services to earn more.
The targeted audience of your business is mainly determined by their ability to pay. Even if your product is literally perfect, and it can solve the majority of your clients’ issues, you still need to make it affordable. There are huge corporations that work this way. Swedish universal furniture stores, Spanish networks with clothes replicas, and Chinese tech giants that take smartphone ideas from American and Korean companies. You are already familiar with these examples of business ideas.
For example, you see landscapes that make your heart feel warmer with the ideas implemented by designers and gardeners. Create low-cost modular gardens with trees, lawns, bushes, and flowers. Develop your unique combination schemes and detailed instructions on taking care of them. The client can make an order on your website and will be able to take care of flowers. Your business idea is a decent and low-cost garden that can be fully managed by a customer without any difficulties.
How To Choose A Business Idea?
When you search for an idea to create your business from scratch, you don’t need to be afraid to generate the craziest ideas ever. The more you generate, the higher the chance that you will find something great. Some rules will help you understand how to start your business.
- Turn on your generation mode. Spend a whole week forming several ideas. And don’t forget to note them all. At the end of the week, analyze all your ideas and choose the best one.
- Test your idea. Choose 3 people out of all your friend and family pool. One skeptical, one dreamy, and one rational. Tell them about your idea and listen to their opinions.
- Interview the search engine. Try to find the same businesses across the Internet and see their structure, goods, and services. Find some ways to be different.
- Find entrepreneurs with the same business but from different cities. Some business owners are ready to share their ideas and secrets. Arrange a meeting and go ahead to find new knowledge.
Proof of Concept. Fully form the structure of a business using brief statements. It should contain the following:
- Business idea (only 1 sentence);
- Team organization;
- Demanded results;
- Measures of success;
- The roadmap of your business.
After creating a document with a detailed check of your concept, you can move forward and establish a business plan and financial model.
How To Create A Business Plan?
A business plan for a small business is primarily a discipline factor. With it, you can describe how your business will develop and why it will be successful. If you want to manage your business yourself, the business plan can be simplified, but you still need to work on it. Usually, a business plan contains the following parts:
- Brief description of the main business idea. This is the point you paid attention to before. You just need to retell all the main parts of your idea.
- Competitors and features of the market. Examine the market and estimate the main features, such as potential growth. List local and global competitors (the ones in and out of your region). Split your competitors into direct and indirect (the ones who have a similar product and the ones who have a different product, but still can replace yours).
- The description of goods and services. Usually, you can see a “Product matrix” term. It is way too complicated. It is a list of all your goods and services, which are divided into separate categories, such as the main ones (determine the primary income of your company), niche (only a small part of your customers will use them), and extra (the ones you can sell with the main ones).
- The lifespan of your product. Mention how long your customers will be able to use your products or how often one will return for your services. With this part, you can easily manage the term of use of your product and provide customers with guarantees and rules for using your services.
- Audience and client analytics. Create several segments of your customers. Describe how you fulfill the demands of each part of your targeted audience. Use age, income, gender, marital status, habits, hobbies, and education to form these segments. This way, you will better understand how to sell your products and services.
- Marketing and sales. Decide the price you are going to put on your goods and services and what is the volume of goods you are going to sell. The main dilemma is to sell more but cheaper, or vice versa. There is no universal and correct decision for such a question. But your business model and the business creation process depend on a chosen ratio.
- The team and organization. Think about distribution points, estimate the required number of employees in your organization, and mention how much you want to pay for their work. Also, show which criteria your workers have to achieve.
- Manufacturing and distribution. Estimate how many items you can produce or how many services you can offer monthly. Think about places to buy materials or goods, people who will give you rent, and what infrastructure will be required.
- Search for customers. You need to choose platforms to attract customers and estimate the price of such a process. You can select such advertising channels as genuine traffic with search optimization, bloggers, social media content, video platforms, and external advertising. Make up a shortlist and calculate the KPI of each advertising method.
- Financial plan. Try to predict all the expenses and income sources. You have to estimate how fast you will gain back your investments, what your monthly income will be, and how to scale your business if everything works as desired. It is crucial to estimate 30–40% of extra expenses. You will definitely have them because no one can predict different unexpected events.
In addition to a business plan, you can create branding. It will be made of the brand style and naming. A common mistake of many inexperienced entrepreneurs is that they concentrate too much on logos and naming. You should pay better attention to analyzing the financial part of your business. Make a simple name and order branding online. Don’t worry. You can easily update branding nuances without any issues.
Where To Find Funds For Business?
You can create a business with minimal investments (we will show you such business strategies at the end of the article) or start your business with an excellent investment. There are several ways to finance your business. Each has its own disadvantage.
Personal savings. You have a chance to create a super profitable business. We do believe in that. However, life can give you unpleasant surprises. So, if you want to reduce all the risks, use the simple rule: 80% – 8 months – 1 unexpected event.
- Try not to invest all your funds. Keep at least 20% of the initial amount.
- Businesses usually show viability within 6–8 months. Be prepared that you will have to find costs for living during this period.
- Have an insurance plan. You need to solve the problem quickly if some additional issues appear.
The help of friends and family. You can try to open not only one business in your life. You will achieve your results, but remember that it is hard to find real friends and impossible to find a new family. So you need to think about how you will have to return their money. If you will not, you might spoil relationships with your closest friends and family members forever. But here are some tips.
- Ask only for the amount of money that will not be critical for your closest ones. This way, it will be fine for them to help you.
- You should rely on three main forecasts: the business grows as planned, the business will be profitable, and the business will not be profitable.
- If the business idea wasn’t successful, estimate the time it would take to return the money.
- Discuss details with your relatives. Make sure they agree with all the nuances.
Co-financing with your partners. Partners can significantly support each other on the one hand, while on the other, they can become the main source of different contradictions. Despite all the encouragement and understanding vibes at the moment of planning, you should make up a contract that will estimate responsibilities. In the contract, you should focus on several aspects:
- Estimate the shares of the company. Shares depend not only on the money value, but also on the effort put into business.
- Estimate responsibility sectors. Your partner can start as a regular investor, but then he might try to affect the company’s processes. This way, you can lose control.
- Make the process of leaving the business clear. You need to estimate the compensation for your partner if he wants to leave.
Also, there are other sources of getting funds for your business. Bank credits have a lot of return requirements, so you can only create a debt obstacle for yourself. Professional investors require a well-based business plan, so you shouldn’t waste your time searching for investors if you lack business pitching skills. Grants and government financing are pretty comfortable and welcoming, but you should find a mentor to help you with pitching. Crowdfunding requires involving media and qualitative content. Only this way will your audience agree to co-finance your business.
Customer Finding and Involvement: Create a Website, Manage Social Media, and Advertise
To create a base of clients, you can use different online tools. Each of them solves different problems. They will help form the client pool or the reputation the way you want.
Website. With the help of the website, you can sell goods and services or introduce your business to clients. Depending on your demands, you can create a landing page, a business card, a store, or a website for signing up for services via forms.
By creating a website with Weblium, you can add up to 10000 positions to your store and accept 15 payment methods worldwide. Export files will help you sync all your goods and services with social media. Service registration forms support unfolding lists and selecting options and date in a calendar. You will make your business successful with a free-to-use builder of pop-ups, expanded SEO settings, and third-party marketing integrations.
Social media. With social media, you will grow your audience and offer goods and services. Remember to link your store on a website to social networks. It is completed with product export.
Online advertising. Online advertising can be divided into banners for third-party websites, promoting posts, advertising announcements, and YouTube videos. SEO optimization of the website will help you attract more customers without extra expenses.
Frequently Asked Questions
Which business is the most profitable today?
The income of a business depends on a chosen business model. For this reason, it is important to create a business plan with the necessary calculations.
What is required to do before starting a business?
We described all the processes. Here is a brief list: find a business idea, draw up a proof of concept, create a business plan, find a financing source, register your business, and describe ways to find and attract customers.
Which business should a beginner start?
The best business for a beginner is the one where you don’t have to form up a team and don’t need to find financial support.
Which business can be started without huge investments?
There are several businesses that don’t require huge investments. Soap production, drop-shipping, production of plush toys, dog clothes tailoring, working with unusual bouquets, dessert production, production of canned products, children care, help with moving, tutoring, photo studio, yoga courses, recruitment agency, online education, translation bureau – all these strategies will be perfect for a startup.