A lot of people think that starting a business is hard and that it requires the huge amount of capital. A lot of would-be entrepreneurs get stuck early in the process because they think that only a certain type of person has that qualities it takes to be successful business owner. The reality is that most people have what it takes: a good idea, the right amount of capital and some creativity.
But what most of the people lack is patience, determination and the ability to plan. A businessperson can easily become overwhelmed in the early stages of starting a business. They key is to have a working plan and stick to it. This article discusses seven key first steps a would-be entrepreneur must follow to start a business:
1. Take time to brainstorm
An idea is always great, but the businessperson is required to give it legs. The first essential step every businessperson must follow is to research a potential market. The job as a new entrepreneur and a future business owner is to think about every aspect of the business. Come up with answers to every question a stranger or a potential investor might ask. For example, try to answer these questions:
• Who is the target market for the product?
• What could go wrong and how will the entrepreneur solve it?
• Are there additional products or services that the entrepreneur could tie into the main offering?
• What are the main things a businessperson wants customers to know?
By preparing answers to these questions ahead of time, the entrepreneur would come across as a more confident and a trustworthy business owner when it comes time to try to attract the attention of the right stakeholders.
2. The businessperson must then create a business plan
After the entrepreneur has taken the time to answer the questions about the business or product idea, he or she must use them to put together a concrete business plan.
The main parts of a business plan include the executive summary, a company description (as to what makes the company unique), a market analysis (the competition and the target demographics), the company’s structure, a description of the service or the product line, the marketing and the sales strategy, and financial projections — plus any other additional useful information.
3. The businessperson is then required to arrange the funds that are required
A businessperson can’t start a business without capital. He or she is required to determine what he has, what he or she will need and how he or she will go about getting it. If he or she plans to seek the investor funding or financing, he or she is required to start writing a business plan. He or she must research the costs that are associated with his business. He or she must know how much money he or she will need and decide where it could come from.
4. Hire a good business attorney
The businessperson is not necessarily required to have need an attorney on a retainer. An attorney can advise the businessperson about things such as drafting of contracts, reviewing businessperson’s lease and determining the right business structure. However, the best way to find a good attorney is either by referral or through networking.
5. The businessperson is required to hire a good accountant
An accountant will work in conjunction with the attorney and will play an instrumental role in determining the best form of ownership. The accountant can also help the owner to establish bookkeeping and other record keeping procedures that the businessperson is required to keep on track for years. Most important, a good accountant will help with tax planning, which includes ITR Filing, TDS Return Filing etc.
6. Decide on a business structure
The businessperson has a lot of choices which include sole proprietorship, partnership, Private Limited Company or Limited Liability Partnership. The personal liabilities, taxes, paperwork and regulations vary greatly among the different legal business structures. The businessperson’s attorney and accountant help to play a key role in assisting in this important decision.
7. Decide on a business name
It seems obvious and simple, but the name is how the business will be known to the world. The right name says a lot about the businessperson’s company. The businessperson must make a list of all the potential names and then narrow the list down to the one that best describes the company in a few words while being catchy, easy to remember, easy to pronounce and easy to spell. The businessperson must also consider how it would translate to a web domain name.
8. Get all necessary licenses and permits
Along with a business license, the businessperson is also required to get additional licenses depending on the type of business and local laws. Many professionals, such as contractors and real estate agents, are required to license in the states in which they work. Additionally, he or she may need licenses to manufacture and/or sell specific products such as liquor, firearms or even lottery tickets. These licenses might be Import Export Code, Fssai License and so on. The businessperson must thus research all the licenses that are applicable in his or her county and state. It is also extremely important to know zoning laws before the businessperson opens a business.
Whether the business is a day or a year old, the businessperson must continuously set goals in order to move his business forward. He or sheA must examine the competition, employees, investors and peers which helps him decide what new goals need to be set and what needs to happen in order to be successful.
Ananya Gulati is a BusinessTown.com contributor