Starting a new business can seem like an overwhelming task. So, take these essential steps to ensure a smoother transition.
Discuss startup plans with your family.
If you are married or have children, it is important to talk to your family. Running a business can be difficult and time consuming, so you need to be sure that you have the support of those closest to you since they will be impacted by your decision. Not only that, but having your spouse or significant other in your corner (someone who is willing to listen to your ideas and give you honest feedback) in the early stages of your business can be a real bonus.
Determine whether you’re up for the job.
Some people are cut out for running a business, while others are not. Before you take the leap into entrepreneurship, you need to honestly evaluate whether you are up for the job. Ask yourself these questions: Are you willing to put in longer days? Can you handle itwhen people criticize your vision and ideas? Are you comfortable with the idea of scaling back and changing your spending habits to support your dream? Are you open to conquering startup hurdles? Clearly define your “why” and list all of the reasons why you want to start a business.
Choose your product and market wisely.
Make sure to find a clear product-market fit. Sell a product or service that people truly need. Also, evaluate your skills and talents and decide which of them can translate into a successful business.
Don’t reinvent the wheel.
It isn’t always necessary to be first to market with a particular product. If people aren’t familiar with the product you are selling, educating them and gaining early adopters can be an uphill battle. Consider a product or idea that has an established market. Just be sure to give your offering its own unique twist to help it stand out from a sea of competitors.
Get to know your ideal customers.
The more you can research your industry and get to know customers, the better. Ask customers what they need and pay attention to how competitors are currently meeting (or not meeting) those needs.
Research and test your business idea.
Rather than jumping into the shark tank with both feet and no gear, you may want to test your ideas to see if they are viable first. For instance, you may want to start your business part-time while earning income at your full-time place of employment. Use your steady paycheck to fuel your cash flow needs. This allows you to see if your business has potential and take a calculated risk.
Acknowledge your strengths and weaknesses.
Take an honest look at your skills and decide which areas are weak. Don’t sugar coat it for yourself. Instead, be brutally honest. When you are done, have someone close to you (that is qualified and preferably has already done what you will set out to do) read the list and get their input. By pinpointing areas where skills are lacking, you can determine which parts of your business operations may need outsourcing.
Find a business mentor.
Having a trusted mentor who can advise you can be invaluable. Find someone you trust who has direct business experience. Be sure it is someone who will be honest with you. If you don’t know of any potential mentors, get on people’s radar. Forbes contributor Kathy Caprino suggests, “Don’t ask for mentorship, but follow their work, and be helpful and supportive. Give, and give more.” You may even want to give them a percentage of your profits or equity in exchange for their help.
Formulate your business plan.
Keep in mind that your business plan is a fluid document that will change over time. However, it is important to try to make it as accurate as possible — particularly when it comes to long-term goals. Your business plan serves two main purposes: It can help you qualify for a traditional loan (or investment) and it can act as a road map for your business as you move forward. Ideally, your business plan should not contain fluff or filler. Instead, be as concise and accurate without wandering off topic or including unnecessary details. If you do want to include extra data, attach an appendix at the end of the plan.
Select and form a legal business entity.
At some point you’ll need to create a company. Choosing the right type of business entity for your operation is essential. The right type of entity can offer a whole host of benefits for your business and be invaluable when it comes to taxation, professionalism, legal coverage, etc.