Entrepreneurship is an idea that appeals to many, but figuring out how to start a business can sometimes be so overwhelming it scares people away. What should you sell? Who should you sell to? How will you get customers?
If that’s not enough, every other week there seems to be a new business trend online. There’s chatbots, Facebook ads, Instagram influencers, and many more. What should you pay attention to? What actually matters?
If you’re serious about starting a business, stop overthinking and start putting in the work to make it happen.
In this article, we’ll take you through how to start a business in 2021, step-by-step
How To Start A Buisness.
Starting a business involves planning, making financial decisions, doing market research, and acquiring knowledge in areas you never thought you would learn about before. We created this 14 step guide to starting a business to help you put your best foot forward today.
It is important to note that there is no one size fits all model to starting a new business, but these steps will help you organize your thoughts, and iron out important details so when you launch your business you have answered all the important startup questions.
Step 1.) Ask Yourself If Your Ready
There will never be a right time to start a business. If the stars couldn’t align for Romeo and Juliet, they probably won’t align for you either. But you can either look at that as the thing that holds you back from starting or use that to push you to start today.
When it comes down to deciding if you’re ready to start a business, it’s more about mindset than timing. Are you in the frame of mind right now to win? If you didn’t shout heck yeah at your computer screen, you might need to re-examine if entrepreneurship is the right path for you.
The reality is saying you’re going to start a business is easy. But doing it, turning nothing into something that makes money, that can be a whole lot tougher.
And you need to be mentally prepared to take something on. Why? Well, there are going to be challenges like creating ads that generate sales. And if your mindset isn’t in the right place, any failure could devastate you. But if you’re in the right mindset, you’ll KAPOW! failures until you finally start hitting your big wins.
Step 2.) Determine What Type of Business to Start
The next step of starting a business is to figure out what type of business to start.
Is there a niche that you’re particular passionate about? Are you looking for a business that you actively work on or just own? Are you looking to turn your hobby into a business? These are just a few of the questions you need to ask yourself before starting a business.
You can start everything from a Shopify store like MVMT Watches did to a freelance business. You can choose to build a business by yourself by owning a consulting business or you can build a company with a team such as a manufacturing company or a restaurant.
To figure out what type of business you want to start, create a list of things you’re passionate about. For example, yoga, personal finance, dogs, movies, food, and clothing.
Next, use a tool like Keywords Everywhere to look up the search volume of your list in Google. This will help you understand how popular your list of ideas is. You can also use Google Trends to analyze whether the trend is trending upward or downward or if it’s stable to determine the niche’s long-term viability.
Then, look at the top three most popular keywords on your list and answer this question, “In five years from now, which niche would not only get me out of bed in the morning but would also excite me enough to continue creating content/products/tools for it?”
So, what’s your big business idea? Feel free to share in the comments.
Step 3.) Choose a Business Model
After coming up with a business idea, think about how you’re going to execute it in your niche. This is where a business model comes into play.
The business model is a strategy for how you’re going to provide value with your idea and make money off of your customer base.
When learning how to start a business, it helps to know about some tried-and-tested business models.
Step 4. Do Market Research
Next, you need to get clear on your target market. In other words, who are you going to serve?
This step is absolutely vital.
As the marketer Philip Kotler once said, “There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market.”
Here’s the trick: Make sure you are part of your target audience.
Think about it. If you’ve been camping your entire life, you’ll understand the problems, desires, and language of other campers. As a result, it’d be much easier to sell camping products online.
Plus, your marketing will be more successful because you’ll have a better understanding of how to communicate with other campers.
On the other hand, if you’ve never been camping in your life, you’d probably struggle – a lot – to sell camping products online.
So, when choosing a target audience, ask yourself:
- What are my hobbies and interests?
- Is there anything that I know a lot about?
- What do I spend most of my time thinking, talking, and reading about?
Step 5.) Find a Problem to Solve
When learning how to start an online business, it’s important to note one key thing: all businesses solve a problem.
Plumbers fix leaking pipes. Hollywood movies fulfill people’s boredom, curiosity, interest, and the need to escape and relax. Clothing brands help people express themselves and feel attractive.
Here’s the golden rule: The bigger the problem you can solve – and the better you solve it – the more money people are willing to pay.
For example, take healthcare services. They solve a big problem, which is why almost everyone is willing to spend a lot of money on it.
On the other hand, not many people will pay you to stop their table from wobbling. It’s not a big problem, and they don’t need help solving it.
Bottom line: If you want to identify how to start an online business, you need to find a good problem to solve.
Step 6.) Set Realistic Goals and Expectations.
One of the biggest reasons for failure in business comes from naive expectations. I constantly hear stories of people pouring thousands of dollars into ads thinking they’ll triple or quadruple their money only to end up with that big, fat zero.
So, let’s try to paint what a realistic scenario looks like. Your first year in business is all about failure. Why? Because it’s your first business.
Most people approach their first business with a sense of false optimism. If that guy can do it, so can I, you casually think to yourself. But what you casually ignore is the fact that that guy is on his fourth business or he’s been running it for seven years.
I love, love, love how excited people are as they begin learning how to start a business. But if you go into it thinking you’re going to dominate the world on day one, you’ll be failing in a matter of months due to drastic disappointment.
The difference between a successful business and a failed one is perseverance. Do you have what it takes to keep promoting your business even when you have no customers or website visitors after a month? Are you savvy enough to know when a strategy just isn’t going to work? And are you patient enough to play the slow and steady game (meaning that you might not see sales right away but will see bigger returns down the road)?
Now that you know that those first few months will take every ounce of hustle you’ve got, how will you approach your goals in the foundation stage of your business?
Maybe instead of focusing on your first sale, you might focus on creating content to drive relevant traffic. Or maybe before you start a business, you choose to build a following on Instagram so that you have an audience when the time to launch comes.
Step 7.) Create a One-Page Business Plan
Unless you’re going to the bank to get a loan, you don’t need to overspend time on your business plan. On a piece of paper, handwrite a plan for your business. While this may be a bit voodoo (sorry!), I find that whenever I handwrite goals, I’m always more likely to achieve them. I always carry my goals around with me which helps remind me of them so I can’t escape them.
Now back to real-world advice. On your one-page business plan, make sure to include the following:
- Problem your business solves
- A one-sentence elevator pitch (what does your business do)
- A list of your target audiences (e.g. people who own dogs, people who follow dog accounts on social media)
- SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats to your business)
- Marketing plan (list of ideas on how you’ll promote your business)
- Financial plan (list of business costs, how you’ll make money to pay for the business in the beginning and how your business will make money)
- Financial projections for each quarter (e.g. January to March, April to June, etc.)
Step 8.) Get Feedback.
So now that you’ve got the idea, you’ve set some goals, and you’ve created a plan, it’s time to get feedback on your idea. This stage has been known to kill many ideas (and sometimes even good ones).
The point of the feedback stage is to get a second opinion on how you can improve your idea. Instead of asking for feedback on the business idea, ask for feedback on a certain component of it. And whatever you do, don’t ask someone you love. Trust me.
Most cities have business centers where you can speak with an in-house entrepreneur who will give you feedback on how to start a business. Some cities even have programs for younger adults that allow you to be mentored by an entrepreneur in your field. Whether you’re planning to work on tried-and-tested or unusual business ideas, be sure to get feedback from the right people to help you inch closer to business success.
Step 9.) Find a Way to Pay for Your Business.
The most common way people pay for their business is through their 9 to 5 job. Avoid quitting your day gig until you’ve generated enough to pay your costs, taxes, and yourself with a six months runway. In the beginning, you likely won’t be able to pay yourself, as you’ll need to reinvest your earnings back into your business so you can scale the business faster.
However, some businesses have very minimal costs such as freelance businesses which might require some software or a computer which you might already own or have access to.
Step 10.) Pair Up With a Partner.
Solopreneurship is on the rise and so this won’t apply to all. But success in business sometimes comes in pairs. Rome wasn’t built in a day and neither was any successful business. There’s going to be a lot of time and resources that’ll go into your business. And having someone you trust to build alongside you can allow you to break up the workload so you progress faster. It’s also great for holding you accountable.
The important thing to stress about a partnership is that you really need to know how well you work with someone. Is this person trustworthy? Have you worked together before? How have the two of you managed conflicts in the past? Do your skillsets balance each other out? Will a business relationship ruin your current relationship/friendship? Make sure to ask all the tough questions because choosing the wrong partner, if you even decide to have one at all, can have negative consequences.
Step 11.) Name Your Business.
Coming up with the perfect business name can be hard, especially if you want a .com domain to go along with it. You can use a free business name generator to help you come up with a name.
Most brands try to include their keyword in the brand name, such as Fashion Nova.
The business name you choose should be catchy, memorable, easy to spell when heard, have available usernames and a domain, and be concise.
Sometimes the best naming ideas come after bouncing names with a friend as a second opinion helps give you a different perspective. So feel free to get a second opinion if you feel stuck when choosing the right brand name.
Step 12.) Register Your Business.
In some cities or states, you don’t need to register your business until you’ve earned a set amount of income or profit from it, so you’ll need to do your due diligence to see what laws apply for you.
However, some entrepreneurs register their businesses on day one to prevent liability. For example, if you’re incorporated on day one and you get sued in the early stages of your business, your business takes the hit instead of you. So, the sooner you incorporate your business, the safer you (personally) are from a legal perspective. Of course, incorporation isn’t the only type of business venture available at your disposal.
You can also choose to become a sole proprietor or create a partnership business. You’ll need to do some research prior to starting a business to determine which business structure is best for your situation.
Step 13.) Create Your First Product or Service.
There are a number of products or services you can create to sell to your audience when starting a business.
If you’re an industry expert, you can create digital products such as ebooks, courses, music, or other digital content to sell to others. You can monetize your expertise with products and upsell with services.
As for software businesses, you can create a SAAS product that helps other businesses. Or if you’re a consultant, you can offer speaking gigs, coaching, or your skillset.
The products you create for your business will depend heavily on your skillset and business type. However, there are countless products that can be ordered or created that you can sell to an audience.