Starting your own business in today's economic climate can seem daunting, but it doesn't have to be. With the correct planning and knowledge, you can learn how to start a small business!
When getting started on your journey to becoming an entrepreneur, you'll need to identify what type of business you want to run and who your target market will be. Here are five steps to starting a small business, from conception to execution.
1. Identify a market gap.
Every industry has holes, and not just in the road. Understanding what no one else is doing and finding a way to fill it can be powerful. Plus, it's good to know what you'll be going up against because if you're going after something people are already well versed in, you need to have a new or significantly different perspective or skill set. For example, women have historically been marginalized in business startups, but I've found they are a vast untapped market. Research has shown that companies with at least one woman on the executive board performed better than those without.
2. Select your goods or services.
One of the most essential parts of starting a small business is creating a product or service people want. First, research different industries to find what niche you want to go into. Next, figure out what you will provide for your customers. One way to do this is by learning about their pain points, what their interests are, and what they would like more of in order to meet their needs. Lastly, once you have an idea for a product or service, come up with some ways to market it.
3. Make a plan and get advice from experts in the field.
A business plan will help you map out a lot of details about your business, but it's not the only thing you need to know. Make sure to tap into other experts in the field for more knowledge.
For example, here are some of the things you can get advice on: legal, financial, marketing and social media strategies, sales tactics and more. Once you have all this information from experts, make an action plan: Take what they've told you and use it to create an action plan that will help grow your company. Focus on what makes sense for your company based on what was discussed during the meeting or phone call with each expert.
Start small when expanding to new markets: One way to expand is by using digital channels like Google Ads or Facebook ads, which allow businesses to target very specific groups of people with specific interests.
4. Dedicate some time to your finances.
For you to say that you've planned your finances properly, you have to calculate the startup costs: the cost of labor, rental costs, licenses and permits, and any other additional costs that might arise. It's also important to plan for the future. It is often recommended that you have the cash to cover up to six months of operating expenses because it could take a while for your business to turn profits.
At this point, decide on how you'll fund your business, such as internal funding (personal savings, funds from friends and family, credit cards) or external funding (small business loans, grants, venture capital and crowdfunding, among others).
Another important aspect of finances is insurance. It's a good idea to set aside funds to ensure your business, no matter what size it is. The type of policy you'll be given depends on your business model and the risks it faces.
Finally, allocate a portion of your finances to acquire the right tools for your business. This will not only make your life easier, but it can also make your business run seamlessly.
5. Market and scale your business.
It is common for many business owners to invest heavily in product development and neglect the marketing budget until after the product is launched. However, in my experience, this is not the best way to go about it. Marketing will help your business scale to the next level by growing your customer base and increasing your revenue eventually. Just make sure you remember to build a solid team as your business scales up.
Starting a small business takes a lot of time and work, but it can be very rewarding. Rely on the steps above and once you get your business going, stay organized and don't lose focus.
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Junior Management Consultant