The thought of owning a business is a dream for many. However, it can be very intimidating to take the first step, especially if you have no prior business experience. The following guide can help you get started on how to start a business.
Initial Considerations
There are a handful of things you need to consider before ultimately deciding to go into business for yourself. The first is to decide what your new business will do. You need to have a strong, well-defined idea.
Do not just go into business because something is what’s selling now. To be successful, you will need to innovate and stand out from your competitors. Start a business based around something you are passionate about.
Money is another consideration. How financially well-off are you? It’s generally recommended that you have six months worth of savings put away before quitting a job to start and run a business full-time.
Another factor to consider is your family. Are they okay with you taking this risk and making this change? Come to an understanding before you proceed any further.
Draft A Business Plan
When starting a business, it’s incredibly important to have a plan. This usually takes the form of a document known as a business plan.
This document outlines all aspects of your new business and there is no set way to make one. Information it can outline includes management structure, long-term goals and a detailed description of a target audience. Writing down this information makes it easier to meet goals and stay on track as your business forms and grows.
A business plan will likely be necessary if you are planning to take out a loan to start your business. Banks will want to see your idea so they can judge whether it will be successful enough to allow you to pay off your loan.
Do not be afraid to edit and change your business plan as time goes by. Making edits based on changing finances, goals, or the types of products or services you produce is good business sense because it allows adaptation.
Register Your Business
The next important step is to register your business. This typically needs to be done for tax purposes, but may also be necessary to secure permits to operate in a particular state or municipality. Check to see what you need to do.
It’s not as simple as it sounds, however. There are a number of legal business entities and you must select the right one.
The first is the sole proprietorship. This is the simplest business entity. In it, you are the sole owner and the business is not a separate legal entity from you personally.
LLCs, or limited liability corporations, have gained a lot of popularity in recent years. They are a hybrid model between the simpler and the more complex business structures. They provide protection as a separate entity while not having the same requirements as full corporations.
Then there are C-corporations and S-corporations. These are more advanced and complex business structures but still have some key differences from one another. These differences include taxation and shareholder requirements.
For someone without business experience, it is recommended you consult a business attorney for this step. An attorney will advise you on the best way to organize your business and ensure it is set up properly. If there are legal problems in the future, having an attorney you can go to for assistance will be a major asset as well.
Use Technology
Technology has made it considerably easier for anyone to start a business for less while still competing against big brands. It is imperative that you incorporate technology into your new business. It will streamline your operations, help you get organized and boost productivity.
Cloud software is key and especially useful for small businesses. Even the largest corporations are heavily utilizing it. Some examples of this type of software include Microsoft Office 365, Adobe Creative Cloud and Quickbooks.
This type of software is usually sold on a subscription model. This makes it cheaper than one-time software downloads and more affordable for small businesses than ever before. It is also very mobile-friendly.
There is also free, open source software that can save you money. If it meets your needs, there’s often no reason not to use it.
Hire The Right Employees
It is usually not recommended that you hire additional employees until you absolutely have to. This is because you want to establish your company first and see some success before you make such a sizable commitment.
The employees most useful for a small business to hire first are usually accountants, marketers and human resources professionals. You want to focus on hiring employees who have strengths that counteract your weaknesses. Because you have no business experience, this usually means people who do.
There are some roles you can likely outsource rather than hire. These include graphic designers, content writers and IT services, among others.
When you do decide the time is right to hire employees, there are a few key steps to take.
- The first is drafting a strong job ad. You want to create one that doesn’t overwhelm the reader and sells both the position and the company. Make it fun and engaging.
- The second is accepting and sifting through resumes. This can also include a skills assessment and aptitude test. Applicant tracking software can help you manage the deluge of resumes if many are submitted.
- The third is the interview stage, where you will meet candidates and evaluate whether you wish to hire them. Always hire for fit, personality and ability. Have a back-and-forth conversation instead of just asking a string of questions.
It is perfectly possible to not only start a new business without experience, but also be successful. Do so by planning properly, setting up the business correctly, using technology and hiring with care. Your new business will achieve liftoff in no time.
