Process of Starting a Business

The process of starting a business starts with conducting market research.

All the information below assumes you have a job you hate and are exploring the options of change. The change might include starting your own business. 

Conducting market research is a vital step in the process of starting a business.  This involves gathering information on potential customers and competitors to develop a strong marketing  plan. The market research is the basis of building a business.

Discovering the who, what, why, when and where, is the process of getting an idea if this ‘sucker will fly’.

Take the time to do extensive research. The devil is in the detail.

The Process of Starting a Business is Knowing the 5 “W’s”  

The 5 “W’s”

Who are you going to sell your product or service to?

What is the customer buying? What are you selling?

Why is the customer going to buy it?

When is the customer going to need it? When will it be ready?

Where are your customers located? Where are you going to find them?

Be sure you understand the importance of not only who your customers are but also where they’re located and what motivates them. 

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• how to turn your dreams into a step-by-step path to  well-thought-out goals.  
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So, whether you’re wanting material possessions, yearning for a promotion, changing jobs or building a startup, this book will help you create a path forward.

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The 3 Key  Research Processes.

• Primary research involves directly engaging potential customers through surveys, interviews, or focus groups to discover what problems you can solve for them. What is the ‘pain point’?
• Secondary research consists of analyzing publicly available information like local government stats or market reports even Google, Yahoo, Bing or any browser to understand your target audience better.
• Competitor analysis can identify market gaps, uncover competitors’ popular products, and show weaknesses in their marketing or sales strategies.

Within the process of starting a business by combining these strategies, you can better position yourself in the market.

Examine every possibility you can think of. Get help. Seek a mentor.

Create a Business Plan

The business plan is critical. It clearly describes your business’s mission, structure, and financial projections. This document is the blueprint and the key tool in attracting staff, customers and investors.

Components of a business plan

• Executive summary is a brief overview of your business, including its mission, vision, and goals.

• Company description includes what it offers and where it is in the market.
• Competitive analysis using the SWOT analysis (Strengths,Weakness,Opportunities and Threats) to evaluate your business against your competitors.
• Organizational structure outlines the business’s legal structure and management hierarchy. This needs to be flexible and will change as the business grows. 
• Products and services are the description of what you’re selling. How you serve your customers and plans for future products or services.
• The marketing approach is how you are going to attract and retain customers.
• Funding requirements give a clear picture of the capital needed to operate for at least the first 3 years and may be extended to five years.
• Financial projections - the juicy stuff within the process of starting a business. The motivator. It’s the spreadsheet that reassures you that the future is predictable. Its primary use is for you and potential investors of your business’s future stability. It is at the forefront of the business process. Without this, you are ‘in the dark’. ‘Shooting from the hip’. 

Include comprehensive information early on in your business plan to prepare for potential setbacks. Use these as opportunities. Record everything for future direction.

Choosing a business name is a personal choice. Consider ambiguous options. It will represent your business. Keep it short as a rule.

Choose Your Business Name

Your business name should be unique and not already trademarked. Do your searches. Tools like the U.S. Patent and Trademark Office’s trademark search system can help verify the availability of your desired name. Just a hint - make it unique or even ambiguous. When you have settled on a name, register it for a small fee and prepare to launch.

Register Your Business

Registering your business is a required legal process that typically involves filing articles of incorporation or organization in most countries. 

Search for the right name that suits your brand. Give it much thought.

Open a Business Bank Account

This is super important, separate your business and personal finances. 

Opening a business checking account and credit card can streamline your finances and protect your personal assets. A business credit card can also help with startup expenses. I can’t make this any clearer. Do it.

Use your blueprint spreadsheet to give scenarios of as many contingencies as you can think of.

Estimating and Protecting Cash Flow

New business startups underestimate their cash flow needs, especially in the first year. 

Use your blueprint spreadsheet to give scenarios of as many contingencies as you can think of. The detail is in the planning process of starting a business. Things like salaries, product development and funding, when revenue will come in and fees for professional services like tax consultants, business attorneys, and accountants. These all have to be estimated. The more you understand and anticipate likely scenarios the better placed you will be to succeed.

Small business loans typically require a solid business plan and financial projections. IMO this is the best source notwithstanding personal funding.

Funding Your Business

Here are some ways to fund your business:

• Self-funding: Using your savings or getting loans from friends and family can reduce reliance on external capital. Not a fan of loans from friends. You be the judge.
• Business credit cards: Often easier to obtain than loans, especially for startups without a revenue history. Be sure you have the means to repay. Bankruptcy can have long-term stigma.
• Small business loans: These typically require a solid business plan and financial projections. IMO this is the best source notwithstanding personal funding. If you can get a business plan with evidence of future growth and cash flow presented and approved, it is a good sign things are going to work out swell.
• Venture capital: Some businesses opt to work with venture capital investors, exchanging equity for capital. Beware of all the future exit clauses. Sometimes it is too easy to get sucked into this with your enthusiasm.

• Crowdfunding platforms like GoFundMe, Kickstarter, and Indiegogo can help raise money from potential customers. Again, research the pros and cons. 
• Payroll software: It’s crucial to invest in payroll software to avoid issues with tax compliance and employee payments. Find decent outsourcing companies that specialize in this. Don’t be limited to local. Research options offshore.

The process of starting a business also involves making decisions to minimize costs, especially when funds are limited. So, think about cost-saving strategies:

Getting a mentor who has experience in the process of starting a business.

Other Considerations & Cost-saving Strategies

• Acting as your own registered agent.
• Using free business formation services.
• Using existing equipment rather than purchasing new tools.
• Utilizing free software tools like Square, which offers free credit card readers for small businesses as an example.
• Get a mentor who has  experience in the process of starting a business.

Continue to work your day jobs until your business generates a steady income.

Keeping Your Day Job

I don’t know why I put this so far down on the page. It deserves a place further up, but here it is.

Starting a business can be financially risky, and many entrepreneurs continue to work their day jobs until their business generates a steady income. This can reduce the stress of managing personal expenses during the startup phase. Yes, it does require working two jobs. However, if you hate your day job and you love the opportunity to start and build your business, then it is never work.

Built into your process of starting a business should be opportunities to go global.

Best Places to Start a Business

Starting a business in your home state is often the most cost-effective. However, with the WWW, you don’t need to limit yourself. Built into your process of starting a business should be business ideas with opportunities to go global.

Now a quick story.

I mentored a startup about 12 years ago. It was a software development business. The gal was super enthusiastic and I could see that if anyone was going to give this startup the best opportunity to succeed; it was her.

For the story, I will call her Gina.

Now Gina was a geek of the highest order. She could make a keyboard sing and the screen dance. It was awesome to watch her create programs and watch them morph into reality.

She had the skills. Now let’s be right upfront - I know little about coding, creating programs or the tech scene. What I do know is business. How to manage the process of starting a business and how to consolidate and grow. That’s what I know.

So Gina had enough of her own saving to last the first few years. The funding, as far as I was concerned was not an issue. 

By the end of the second year, she was working on the business, not in the business.

Gina wanted to start in her hometown. Small town USA. Yes, it was sustainable looking at the market research. Yes, it was profitable when we did the blueprint, business plan, and spreadsheets. However, with the product she was developing and the pain point she was fixing, I could see it could be quite useful globally. I discussed the option with her. We included many options and scenarios in the plan and spreadsheet. At the end of the day, the decision was made to test the market initially and record the results over 6 months. I introduced offshore outsourcing for scalability and fewer moving parts to manage in-house. I love ‘fewer moving parts”.

To cut a long story short, the exercise went ‘gangbusters’ Not only did she out-perform budget forecasts but had to increase the outsourced staff. 

In no time, Gina was managing the business. By the end of the second year, she was working on the business, not in the business.

The best possible strategy to build your business. 

So, from the process of starting a business to having a successful business after only two years, the outcomes were phenomenal.

Gina sold her business for millions a few years ago and is now enjoying life swanning around Europe considering her next business venture. 

This was a success, because Gina took advice. She loved what she did and she worked on her business not in her business. An enormous difference.

Summary

So there you have it. In summary, before you do anything: 

Do your research.

Get a mentor.

Figure out the funding.

Do a blueprint.

Do a business plan using a spreadsheet.

Consider all scenarios.

Don’t give up your day job.

Stay focused.

Set realistic goals and time frames.

Think global.

The process of starting a business is not rocket science. It is plain common sense. 

If you think you have what it takes, get on board. I’m here for you.

Go you good thing.

Experience isn't the best teacher, experience is the only teacher.

Confidence comes from experience

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Hello, I'm Daryl Pratt creator of MENTORaUS

I have been mentoring folk like you since 2005. 

I built this site so I can share all my knowledge, wisdom and experience from the thousands of hours of listening and mentoring folk to make a change. 

Life is short my friend so the sooner you control your destiny the better.

It will not be easy but it will be fulfilling, I can guarantee.

There is nothing so powerful as an idea whose time has come!

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