How to Start a Business: A Step-by-Step Guide

So, you have a brilliant business concept that will change the world – now what? This is a question that people ask themselves daily, but seldom have an answer. The truth is, turning a concept into a practical business is much more difficult than people would assume. However, with planning, organization, and a few proven strategies, starting and maintaining that new business idea is plausible. If you’d like to learn the best practices for how to start a business, here is a step-by-step guide to follow.

Step 1 – Think of Your Business Idea

Most business ideas begin with a flash of inspiration. Whether it’s something you saw online, a passion you have, or an industry you believe needs better leaders, most businesses are created by some sort of inspiration. The main problem several people encounter is not thinking about whether that concept is best suited as a practical business or should be allocated as a hobby.

That’s why the first step in starting a business is to think about whether your idea can be turned into a profitable business opportunity. A business should provide a good or service for a consumer group for a fair market price. Start by writing down your business idea and ask yourself whether you can turn the concept into a profitable business before investing time, money, and sweat equity. And, don’t be afraid to seek out the advice of friends, family, or other business owners.

Step 2 – Write a Business Plan

Once you’ve determined that your concept can be turned into a profitable business, the next step is to determine how you’re going to accomplish this task. This is where a detailed business plan comes into play. A good business plan outlines several important business operational steps such as defining your product, your targeted customer, operational needs, investigating your competition, creating a marketing and start-up plan, assessing your financial needs and current financial situation, and establishing a plan on how you intend on reaching your customers and stimulating business.

We’ll explain a few of these items in more detail below.

Step 3 - Complete Market Research

It’s quite possible that others have come up with your business idea prior, and perhaps they are currently in business in your area. Before you start a business, you should investigate whether there are others in your area providing similar services. Competitive market research goes much further than simply seeking out others. You should find out how they operate their business, what do they charge for goods or services, how do they connect with customers, and what are their strengths and weaknesses?

This is a part of your business plan, and you’ll quickly learn that a good business plan is always evolving the more research you complete. 

Step 4 - Outline Your Financial Needs

Every business requires some capital to start and maintain operations. Some businesses can be started progressively, with limited financial resources. However, several start-ups fail due to the part-time concept. Regardless of your plan of action, you need to determine how much capital you’ll need to operate and maintain your business before it becomes profitable. Most new businesses require a few years in order to become a profitable entity.

When you determine your financial needs, you’ll also use this data in your business plan, as you’ll need to outline whether you’ll need investment or loan capital to start the business correctly.

Step 5 – Set Up a Registered Business

The steps above will help you determine if starting a business is practical based on your experience, finances, competition, and legality. The next step is to start the action by registering your business with local government. Each city, county, or providence has unique regulations and requirements, so inquire with your municipality for specifics.

Step 6 – Purchase an Insurance Policy

Once your business has been legally established, it’s important to take steps to protect it. The first item should be to retain an insurance policy that helps provide financial support for legal defence against claims of impropriety by clients. A good start is business insurance, which will help cover legal expenses if a civil claim is made against you or your new business. This peace of mind protection allows you to focus on building and developing your new business.

Step 7 – Develop Your Products and Services

When your business has been established and you’re protected with insurance, it’s time to spend time developing your products and services. If you’re offering services (such as online marketing, consulting, or other skill-based advice) outline different levels of service offerings, such as your hourly rate, any retainers required, and terms of service. For products, begin the process of searching for suppliers of raw materials, equipment, and locations to open your business.

Step 8 – Build the Team

Some start-up businesses are self-operated, but that doesn’t need you can do everything yourself. A good business owner understands the importance of allocating tasks to other team members – as to not spread themselves too thin. In your business plan, you hopefully determined how many employees or contractors you’ll need to start. This is the time to find them and hire them.

Step 9 – Brand your Business and Start Advertising

Any good business has a solid brand identity. Whether it’s a catchy name, logo, tagline, or their identity, you need to develop a good brand package before officially opening. This is an area where you should seek professional guidance, especially since developing a strong brand takes a large-scale approach. Consider searching online, such as Upwork.com, where you can find experts in brand creation, such as building logos, websites, and professional-written content.

When your brand identity has been finished, which should include your logo, company colours, fonts, and of course, your complete website, then begin your marketing and advertising program – again established in your business plan.

Step 10 – Grow the Business

It usually takes a start-up business a few years to become self-sustainable and profitable. However, the quicker you begin to grow the business by connecting, networking, and reaching out to new customers, the sooner you can become profitable. Consider setting up a Linked-In page, Facebook, and other social media platforms to connect with future customers and educate them about your industry and the services or goods you offer. Connect locally with the chamber of commerce, or other business owners like yourself, where you can perhaps trade services to help each other grow. Your plan for business growth is another item that will be documented in your business plan. The key is to follow it initially and fine-tune it as you progress.

Developing a concept into a practical business is going to take time, hard work, and likely cost you some money. However, if you start with a proven plan on how to start a business, follow through with each step, review your results, and adjust the plan overtime, you’ll find the process to be much easier and effective.