Coming up with a business idea is one step. Learning how to start a business from scratch is another step in becoming the entrepreneur you always dreamed of. <\/p>\n\n\n\n
There are a lot of things you have to consider. From having a refined idea to planning your business structure. <\/p>\n\n\n\n
Of course, you know that being your own boss, enjoying the flexibility with your schedule and keeping more of the financial rewards that come with business ownership has a lot of sacrifices accrued to it. <\/p>\n\n\n\n
In fact, according to the SBA<\/a>, 2\/3 of businesses survive at least 2 years and approximately 50% survive 5 years.<\/p>\n\n\n\n So what is the reason for this high rate of failure?<\/p>\n\n\n\n Lack of, or poor planning can be a major factor. <\/p>\n\n\n\n And to get rid of this, you need to understand what it takes to start a business from scratch, and the steps involved. This article sheds a clear light on this topic. <\/p>\n\n\n\n Starting a business involves creating an organization that is primarily focused on a single product or service which it offers to the consumers.<\/p>\n\n\n\n Additionally, It involves many activities related to organizing the company. From generating an idea for the organization to researching the idea’s potential for success to writing a business plan. All of these processes are employed in starting a business.<\/p>\n\n\n\n As an entrepreneur who is just starting out, you are responsible for the financial risks of the business, as well as the operation and management of the business. <\/p>\n\n\n\n You may want to establish a small, local business organized as a sole proprietorship, or a large business, operated as a corporation. <\/p>\n\n\n\n Regardless of the size of a business, it has to solve problems to survive. Many large, successful corporations began as small organizations with a business idea that was significantly different from anything else on the market.<\/p>\n\n\n\n So, as an entrepreneur, you must be sure that your business idea offers a unique service to your customers. <\/p>\n\n\n\n And to do so, you must first know who our target customers are. Afterward, you can now identify what products they may like and tailor your services to suit their needs.<\/p>\n\n\n\n In general, when starting a business, you should have a plan on how the business will run for the next 2 to 5 years. In other words, you should have a time-based projection for your business. <\/p>\n\n\n\n This plan may cover short-term goals, ranging from 6 to 12 months, and long-term goals, ranging from two to five years.<\/p>\n\n\n\n Don’t understand your business model? Read this post on What Is A Business Model? 35 Types Of Business Models In 2022<\/a><\/p>\n\n\n\n To start your business from scratch, there are a few things to do. Firstly, you must realize that a lot of businesses have crossed the path you are on right now. <\/p>\n\n\n\n So, even if you don’t want to start from scratch, you can just read up on your favorite entrepreneurs and use the same tactics they used. <\/p>\n\n\n\n The bottom line is, you don’t need to reinvent the process, you just need the right information. <\/p>\n\n\n\n So, the question now becomes “What will I do with the business idea in my head right now?”<\/em><\/p>\n\n\n\n Here are 11 things you should know.<\/p>\n\n\n\n Yes, you may have a very good business idea in your mind that has high potential of succeeding. But, if you look closely, something may be odd. <\/p>\n\n\n\n It could be your plan, how much you want to invest, how many people you intend to hire, how you want to present your services to the market, It could be anything. <\/p>\n\n\n\n This is why the first step is to go through your idea and be sure there are no loopholes. Of course, your idea is good, but it can be better.<\/p>\n\n\n\n You have a brilliant business idea that will scale in no time. But the question is “Have you done your research?”<\/p>\n\n\n\n Read books about business, listen to podcasts of your favorite successful entrepreneurs. Listen to the mistakes they made, and find out what they did to ensure you don’t make the same mistake. <\/p>\n\n\n\n Also, while researching, figure out what you can do better, if the market is saturated, why the market is saturated, how can you penetrate the market and generate leads that will in turn drive sales? Figure out who your target market is and how you can reach them.<\/p>\n\n\n\n If possible, build a prototype for people to use, touch and look at. If a prototype is not possible or it\u2019s a service business, then offer a highly descriptive presentation of the business plan complete with it\u2019s unique benefits and how it\u2019s different from the competition.<\/p>\n\n\n\n Most importantly, understand the “why of your business”. You are going to have to do something better, and you’ll only find it out in your research. <\/p>\n\n\n\n Keep in mind that you\u2019ll never come up with a universally loved product, your job is to produce a product or service that appeals to the broadest range of your target market.<\/p>\n\n\n\n Make more money, learn How to Sell App Ideas to Google and Get Paid Heavily in 2022<\/a><\/p>\n\n\n\n With a refined idea, and a solid result from your research, its time to write a business plan. <\/p>\n\n\n\n Your business plan will contain answers to questions like,<\/p>\n\n\n\n Why am I starting this business? Who is my target audience? How much will it cost to get started?<\/em> <\/p>\n\n\n\n Asides these, your business plan should contain;<\/p>\n\n\n\n This should lay out the businesses product or service and the problem that it solves for the consumer.<\/p>\n\n\n\n This section should talk about the market you are serving. Is it an expanding market, and how does your product fit into the already existing market. <\/p>\n\n\n\n This segment should answer the question of how you intend to penetrate the market and sell your product or services. <\/p>\n\n\n\n How do you intend to run your business, Who will be your key employees, and what are their specific roles. Will these employees have targets given to them each month. <\/p>\n\n\n\n While writing your business plan, it is important that your put your best foot forward. <\/p>\n\n\n\n Playing up the positives while minimizing the negatives is almost expected in a business plan.<\/p>\n\n\n\n Moreover, banks and other professionals who will want to invest in your business will do an in-depth analysis before putting any money into your idea. <\/p>\n\n\n\n Before starting that business, its imperative that you carry out a risk analysis of your business. What investments will you take in future that has a high risk potential?<\/p>\n\n\n\n Think about it. Because, many businesses comes with risk. So, the earlier you determine which risk level you can take, the better for your business. <\/p>\n\n\n\n One hack to this is to consider an exit strategy. It will help you figure out how to overcome any potential difficulties and what you need to sustain it.<\/p>\n\n\n\n Get to know 25+ Most Profitable Small Businesses In 2021 | Expert Advice<\/a><\/p>\n\n\n\n Its not enough that you have a viable business idea. The next most important thing to consider is the cost of turning that idea into a business. <\/p>\n\n\n\n Every business requires capital, so you need to know how you’re going to get the finances to fund your business. <\/p>\n\n\n\n Are you going to be working with a team? Then you\u2019ll have to consider the cost of paying these people.<\/p>\n\n\n\n Will you need equipment? If yes, you’ll have to determine the cost of acquiring that equipment. <\/p>\n\n\n\n Also, check the expenses you’d make, to ensure you wouldn’t be spending into your capital. You know that a startup doesn’t produce profit for at least the first five years of business. <\/p>\n\n\n\n So, how do you intend to get that money?<\/p>\n\n\n\n If you have the money to fund your business then this is the easiest. You don’t have to go to the banks or look for investors to invest in your business. <\/p>\n\n\n\n But this is not an option for most people as they don’t have the money to invest in their business. <\/p>\n\n\n\n Regardless, there are still other options available<\/p>\n\n\n\n Your friends and family can be a good source of funding for your business. Go ahead and send out your business plan to everyone you know. <\/p>\n\n\n\n Then follow up, be prepared to tell them the total amount of money you expect to raise, the minimum investment you are looking for and what you will give in return for the investment.<\/p>\n\n\n\n Banks could be another source of funding for your business. However, the irony is that they are willing to give you money when you don’t need it but become stingy when its time to get a loan. <\/p>\n\n\n\n Before you approach the bank, go over your business plan with an expert and verify all the numbers and data that you provide. <\/p>\n\n\n\n Also be very familiar with your business plan, so that you can answer any question they might have. <\/p>\n\n\n\n Get to know 200+ Online Business Ideas That Can Make You Wealth in 2022<\/a><\/p>\n\n\n\n You can also source funds from several crowdfunding sites like Kickstarter or GoFundMe.<\/p>\n\n\n\n Other Important things you need to consider when starting a business from the scratch is;<\/p>\n\n\n\n You\u2019ll need to determine your business structure. Whether you’d operate as a sole proprietorship or a partnership or an LLC.<\/p>\n\n\n\n Most small businesses choose to operate as a sole proprietorship. This is because, it allows most business owners use their personal account instead of a special business bank account. <\/p>\n\n\n\n Additionally, you as the sole proprietor has total control over all decision making. <\/p>\n\n\n\n The downside to this is that you are personally held responsible for the debts and liabilities of the company. <\/p>\n\n\n\n A partnership is formed when two or more people decide to start a business. This can be another legal way to structure your business. <\/p>\n\n\n\n However, it is important that before you enter a partnership, you must have a partnership agreement. <\/p>\n\n\n\n The advantage of using the partnership structure is that its relatively easy and inexpensive to start. <\/p>\n\n\n\n Hiring key employees can be easier as you are allowed to give equity ownership to as many partners as you want.<\/p>\n\n\n\n For tax, each partner pays tax on their individual portion of the partnerships income.<\/p>\n\n\n\n The downside to this is that it can be difficult for some general partnerships to raise capital. <\/p>\n\n\n\n Because it is a partnership, the actions of one of the partners can affect the entire organisation. <\/p>\n\n\n\n Additionally, all profits must be shared according to the partnership agreement regardless of the amount of work done by any single partner.<\/p>\n\n\n\n This is the most popular business structure for various business entity. This is because, the setup cost is not prohibitive and there is a separation between the owners and the company.<\/p>\n\n\n\n The main advantage of this type of business structure is that it provides some protection against certain debts and liabilities that are solely the companies. <\/p>\n\n\n\n For tax purposes, its only going to be once, on an individual level. <\/p>\n\n\n\n Another business structure you might want to consider is a corporation. A corporation is legally considered an independent entity that is seperate from its owners. <\/p>\n\n\n\n The advantage of this type of structure is that the owners cannot be held personally responsible for any debts or liabilities of the company.<\/p>\n\n\n\n The downside to this is that, it has higher administrative costs than any other business entity. <\/p>\n\n\n\n Also, you’d need to obtain license and permits fro the state where your business is located. <\/p>\n\n\n\n Different types of business entities have different registration and administrative requirements. <\/p>\n\n\n\n So, endeavour to register your business with the state.<\/p>\n\n\n\n If you’d need to work with people, which you definitely will, then go ahead to build your team. <\/p>\n\n\n\n Do you hates sales and marketing? There are tons of people that will be willing to do that for you.<\/p>\n\n\n\n What about Accounting? There are a ton of small accounting firms out there that will take care of that for you.<\/p>\n\n\n\n Whatever job you need to be done, figure out who will get it done and implement the solution. <\/p>\n\n\n\n No matter what kind of business you start, you need insurance! Of course, no one likes to buy insurance, but it can be the difference between having a minor inconvenience and declaring bankruptcy.<\/p>\n\n\n\n Good branding is always important for any business to thrive. So figure out the best way to package your business to grab the attention of your customers. <\/p>\n\n\n\n Continuously review the strategies put in place to see the growth of your business.<\/p>\n\n\n\n What Does Starting a Business Mean?<\/span><\/h2>\n\n\n\n
How to Start a Business from Scratch<\/span><\/h2>\n\n\n\n
#1. Refine your Idea<\/span><\/h3>\n\n\n\n
#2. Do your research<\/span><\/h3>\n\n\n\n
#3. Write a business plan<\/span><\/h3>\n\n\n\n
a. Executive Summary<\/span><\/h4>\n\n\n\n
b. Market Evaluation<\/span><\/h4>\n\n\n\n
c. Market Strategies<\/span><\/h4>\n\n\n\n
d. Operational Plan<\/span><\/h4>\n\n\n\n
#4. Do your risk analysis<\/span><\/h3>\n\n\n\n
#5. Evaluate the Costs<\/span><\/h3>\n\n\n\n
a. Self Funding<\/span><\/h4>\n\n\n\n
b. Friends and Family<\/span><\/h4>\n\n\n\n
c. Banks<\/span><\/h4>\n\n\n\n
d. Crowdfunding<\/span><\/h4>\n\n\n\n
#6. Determine your business legal structure<\/span><\/h3>\n\n\n\n
a. Sole Proprietorship<\/span><\/h4>\n\n\n\n
b. Partnership<\/span><\/h4>\n\n\n\n
c. Limited Liability Company (LLC)<\/span><\/h4>\n\n\n\n
d. Corporation<\/span><\/h4>\n\n\n\n
#7. Register with the Government<\/span><\/h3>\n\n\n\n
#8. Build a team<\/span><\/h3>\n\n\n\n
#9. Buy Insurance<\/span><\/h3>\n\n\n\n
#10. Brand yourself and advertise<\/span><\/h3>\n\n\n\n
#11. Grow your business.<\/span><\/h3>\n\n\n\n