15°C Lekki Lagos
May 19, 2024
Business Development

ABC Of Starting Business

  • May 13, 2024
  • 12 min read
ABC Of Starting Business

THE ABC OF STARTING A BUSINESS

To become a great and successful entrepreneur does not necessarily require a university degree or loads of cash in the bank, suffice to say little or no experience. Nonetheless a good plan and an ‘I CAN DO IT’ attitude is a must for success in any type of business startup.

Some of the most popular reasons of starting a business can include having a unique business idea, designing a career that has flexibility for growth, working towards financial independence and investment in oneself. If you consider all of this factors against the fact that 80% of all businesses in Nigeria are categorized under small businesses according to the Corporate Affairs Commission, it’s a little wonder that small businesses are everywhere but not all of them are destined to survive.

As a matter of fact only two-thirds of these businesses survive at least Two Years and about half survive Five Years of existence. In other words you may be facing a real challenge when you decide to take action, forget your day –job and become a business owner, following the necessary steps when starting your business will prepare you and your business for a bright and thriving future because you have built your business on a sure foundation for success.

Here are STEPS required to start a business successfully, take one step at a time and you’ll be on your way to successful business ownership:

Step 1: DO YOUR RESEARCH AND EVALUATE YOURSELF

In this guide it is important to start with the most basic question: THE WHY QUESTION,

WHY DO YOU WANT TO START A BUSINESS OF YOUR OWN?

Is it because you need an extra income to support your regular job or you need more freedom and you think it’s time to leave your 9-5 job to start something new?

To help you figure out the type of business you should start you will need to answer this questions with all sincerity, you also need to probe yourself further by asking yourself questions like:

  1. What skills do I have
  2. Where is my area of expertise
  3. Where does my passion lie
  4. What sort of lifestyle do I want to live
  5. How much do I need to start my proposed business
  6. How much can I afford…

Answering all of these questions honestly will create a solid foundation for moving forward, it is better to overcome the odds before inception than latter.

Now that you have done your evaluation and self-appraisal you also need to do a background research of the proposed business so as to balance the business with a little reality, you will need to answer questions like:

Does my business have the potential to succeed?

At this stage you may need to run your business idea through a validation process before you go any further, since you’ve spent time searching for business ideas, now that you’ve come up with one and you’re ready to dive right in, before you make that life-altering decision take some time to analyze the following processes:

  1. Identify a Target Market

The most important aspect of validating a business idea is to determine who your consumers are those who will need your product or services. You need to do a customer avatar that will clearly create a picture of your ideal customers. You need to consider factors such as Age, Gender, Education, Income and Location. The more you have a target customer base the better for you to serve them well. You will not be able to figure out if there is a market for your product or service until you have a clear idea of who will be buying from you or needing your service as the case may be. Check to know if the market is big, how complex it is, is there room enough for your product or service to mix with multitude of existing competitors…

It can also be helpful to test a segment of your target market, conduct a survey to find out who they really are, then  you can decide if it makes sense to launch out by gauging the response from your survey before fully committing to launch out.

  • Know What Makes Your Product/Service Different

 A Unique Selling Proposition during your research will probably help you to discover that there are other businesses already in existence offering same product or service as you, this does not mean your business will fail, it only means that you need to identify what makes your product or service different from your competitors. The Unique Selling Proposition you offer your audience should clearly identify what makes your business different and why your target audience should choose you over your competitors. It could also serve as an effective tool that helps you define your business brand and makes it unique.

Step 2: MAKE A PLAN

A business plan is a blueprint that will guide your business from start to finish. To make your business idea a reality you will need a detailed business plan to follow. This is a must have for all new businesses.

There are different types of business plans for different businesses. If you intend to seek financial support from other investors or Financial Institutions you will need a TRADITIONAL BUSINESS PLAN which is a must for this type of venture. The traditional business plan is generally long and explicit and it normally comes with a common set of sections or details that investors and banks are looking for before they approve your business idea.

If you are not keen on seeking Financial Support a simple one page outline of your business ideas can give you clarity about what you intend to achieve and how you plan to achieve them. A written out plan is always better than guess work when it comes to starting a new business. People will always prefer less of a bad thing than more of a good thing, so if your business can fix a problem for others, they will always appreciate you for that.

Remember the better, cheaper, faster approach, if your business is not completely new in the market think about the current offers on the market and focus on how you  can create something better, cheaper and faster than what the market currently gives.

Step 3: PLAN YOUR FINANCES

Although starting a small business does not have to cost a lot of money, it definitely will involve some initial investment as well as ability to cover ongoing expenses before it starts yielding profit. It is an ideal thing to develop a spreadsheet that estimates the startup costs for the business, equipment costs, Legal fees, Insurance, License and Permits, Market Research, Branding, Property Leasing and all other necessary costs you need to keep the business running for at least 12 months including salaries to yourself and your employees.

Now that you have a figure in mind, there are a number of ways you can fund the business which includes:

-Seeking small business loans from the Banks

-Seeking small business grants from the Government

-Approaching Investors for support …

The goal here is to work through the options and create a plan that best suit your financial need to get your business off the ground.

Step 4: CHOOSE A BUSINESS STRUCTURE

Your business could either be a Corporation, a Limited Liability Company or a Sole proprietorship, or even a partnership.  The business structure/entity you choose will impact your Company in many ways, i.e. business name, liabilities, taxation, auditing etc.

It may be worth investing in the service of an attorney to ensure you make the right choice for your business structure depending on the complexity of the business.

If you choose an initial business structure and then the business grows and needs change you may have to reevaluate and consequently change your business structure as well either from sole proprietorship to Limited Liability or as the case may be.

Step 5: REGISTER YOUR BUSINESS NAME

Since your business name plays an important role in almost every aspect of your business life you need to make sure it’s a good one, also be sure to think through all of the potential implications as you explore your options.

Once you have settled for a business name you will need to check if its currently in use or have been trademarked before you get it registered. A sole proprietor must register their business name with their state or Local Government while Corporations, Limited Liability Company’s or Limited Partnerships  usually register their businesses with the Corporate Affairs Commission when their paperwork is filed.

Step 6: GET LICENSES AND PERMITS

Paperwork is part of the process when you start you own business. There are variety of business licenses and permits under law that may apply to your business depending on your location and type of business. You will need to know what License and Permit apply to your situation during startup process.

Step 7: CHOOSE AN ACCOUNTING SYSTEM

Your accounting system is necessary in order to create and manage your budget, to set your rates and prices, to conduct business with others, and to file your taxes. If you know much about accounting you can easily set up your accounting system yourself, else you hire an accountant to take away the guess work.

It has been proven that businesses run most effectively when there are systems in place, and one of the most important systems for a small business is a proper accounting system. So you may have to consider choosing your accounting system as a lifeline for your business.

Step 8: SET UP YOUR BUSINESS

In setting up your place of business, you will need to think about your location, equipment and overall setup and make sure your business location works for the type of business you intend doing because setting up your place of business is important for the operation of your business whether you will have a home office, a shared or private office space or a retail outlet, you also will need to consider if it makes more sense to buy or lease your commercial space.

Step 9: GET YOUR TEAM READY

Its now time to start the process of hiring employees. Make sure you take the time to outline the positions you need to fill and the job responsibilities that are part of each position.

If you need to outsource employment work to independent contractors, now is the time to work with an attorney to get your Independent Contractor Agreement in place.

Moreover if you are a one-man business outfit hitting the small business road alone, you may not be needing employees or contractors, but you will still need your own support team such as a mentor, a business coach or even your family that will serve as your Go-To resource for advice, motivation and reassurance when the business road gets bumpy.

Step 10: PROMOTE YOUR SMALL BUSINESS

Once your business is up and running you need to start attracting clients and customers. You want to start with the basics by writing a unique selling proposition and create a marketing plan. Then, explore as many small business marketing ideas as possible so you can decide how to promote your business most effectively.

 Once you have completed these business start-up activities, you will have all of the most important bases covered. Keep in mind that success doesn’t happen overnight. Use the plan you’ve created to consistently work on your business, and you will increase your chances of success.

Step 11: GET FEEDBACK

One of easiest ways to utilize feedback is to focus on “THE LEAN STARTUP” approach. Let people interact with your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people will become your first brand advocates, especially if you listen to their input and them like your product or service.

By pushing out a product, getting feedback and then adapting before you push out the next product, you can constantly improve and make sure you stay relevant.

Just realize that some of those advices solicited or not, will be good and some will be bad, so you should have a plan on how to receive feedback.

HERE ARE SIX TIPS FOR HANDLING FEEDBACK

  1. STOP AND THINK OVER EVERY HINT YOU GET

Your brain will probably be in an excited state when receiving feedback from clients or customers, and it may start racing to bad conclusions. Slow down and take the time to consider carefully what you’ve just heard.

  1. APPRECIATE THOSE COMMENTS WETHER GOOD OR BAD

Start by saying ‘Thank You’. People who give you negative feedback wont expect you to thank them for it, but doing so will probably make them respect you and encourage them to continue to be honest in the future.

  1. LOOK FOR THE GRAIN OF TRUTH IN EVERY HINT

If someone doesn’t like one idea, it doesn’t mean they hate everything you’ve done. Remember that these people are trying to help, and they might just be pointing out a smaller problem or solution that you should look into further.

  1. CHECK OUT THE PATTERNS OF THOSE FEEDBACK

If you keep hearing the same comments, then it’s time to start sitting up and taking notice.

  • LISTEN WITH CURIOUSITY

Be willing to enter into a conversation where the client or customer is in control

  • ASK QUESTIONS

Figure out why someone liked or didn’t like something about your product or service. Think how you could make it better? Or what would be a better solution?

BEST OF LUCK

Leave a Reply

Your email address will not be published. Required fields are marked *