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Start-up Advice

A Simple 6-Step Process to Starting a Small Business

It can be easier than you think if you break it down in small moves forward.

Matthew Toren

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A great small business always starts out as an idea, but you have to transform that idea into action. That’s where many individuals can start to feel overwhelmed. It’s understandable to freeze up at the deluge of things that are required to get a business started, but getting going is actually easier than you might think.

Like any big goal, if you start by breaking it down into smaller tasks, you’ll be able to tackle enough of the actions necessary to get started.

Related: Keep it Simple: How to Write a One Page Business Plan

Here are six ways to break down the process and simplify getting started with your own small business.

1. Write a one-page business plan

The key to a successful small business, especially in the startup phase, is to keep things simple and costs low. Costs don’t just mean your monetary costs, but also your time.

Many would-be small-business owners fall into the trap of trying to create the world’s biggest and most robust business plan. You’re only going to need that if you’re seeking investment or financing, and even if you will be seeking either of those things down the road, I always recommend small-business owners start out with by testing their ideas first before investing lots of time and money.

So to get started, create your own simple, one-page business plan that is a high-level overview of the small business you’re about to start.

  1. Define your vision. What will be the end result of your business?
  2. Define your mission. Different to a vision, your mission should explain the reason your company exists.
  3. Define your objectives. What are you going to do – what are your goals – that will lead to the accomplishment of your mission and your vision?
  4. Outline your basic strategies. How are you going to achieve the objectives you just bulleted?
  5. Write a simple action plan. Bullet out the smaller task-oriented actions required to achieve the stated objectives.

That’s it. It might be longer than one page, but it will surely be more organized and shorter than a full business plan, which could take weeks to write. If you need more information on the one-page business plan, or want to write out a full-blown finance-centered business plan, you can check out the book I co-wrote with my brother that has a robust explanation of both, Small Business, Big Vision: Lessons on How to Dominate Your Market From Self-Made Entrepreneurs Who did it Right.

2. Decide on a budget

While I highly recommend you keep your costs as low as possible, you’ll still need to determine a budget to get started and how much you’ll be able to spend.

If you’re self funding, be realistic about numbers and whatever you anticipate your budget to be. I’ve found that an additional 20% tacked on for incidentals is a realistic overage amount that helps you plan your burn rate.

Your burn rate is how much cash you’re spending month over month. It’s an important number for you to figure out to determine how long you can stay in business before you need to turn a profit.

You should set up your business with profitability in mind the first 30 to 90 days. It’s possible. But have a budget reserve so you can survive if things go leaner than expected.

3. Decide on a legal entity

Filing paperwork to start a business costs money. Often, depending on your state, it can be a lot of money. You’ll need to account for city or municipality licensing, state incorporation or business entity fees and more. Do a thorough search ahead of time to determine what the filing fees are for your city, county and state before starting any business.

Often in the initial “test” phase for your small business, it can be wise to start as a sole proprietor, as it means less paperwork and up-front expenses. That can save you some big-time cash while you determine the viability of your business.

Do be aware though that acting as a sole proprietor can put you at personal risk, so you’ll want to weigh the benefits vs. risks and then speak with a local attorney or tax professional to decide which is smarter for your short-term vs. long-term goals.

You can always file for a business entity once you’ve proven in the first three to six months of business that you’ve got a viable, sustainable model.

Related: Free Sample Business Plans

4. Take care of the money

Whatever business entity you decide on, keep the funds separate from your personal accounts. This is a big mistake that makes tax time and financials so confusing. It’s really easy to set up a free business checking account with your local credit union or bank.

All you’ll need is your filing paperwork, sole proprietor licensing information and an initial deposit to get set up from most financial institutions.

Don’t pay for an account or get any kind of credit lines yet, just get a holding place you can keep your money separated from your personal accounts. This should take you no more than hour at the financial institution of your choice.

5. Get your website

Regardless of whether your business will be brick or mortar or online, you’ll need a website and that means securing a URL. Popular domain sites such as HostGator and Go Daddy will allow you to search for the website domain address of your choice and purchase it for as little as R100.

If you’re starting an online business, you can tie your domain to an online shopping cart and store front such as Shopify for a low monthly fee, or you can build a basic website yourself on top of your URL with do-it-yourself drag-and-drop site builders such as Weebly for a low fee. Both are less than R1 000 a month.

6. Test sales

You have enough of a foundation now that you can start testing some sales. Try to spread the word in inexpensive and creative ways.

If you have a service-based business, get involved with your local chamber of commerce or small-business chapter immediately and ask what resources are available for you to speak, present or share information about your business.

If you have a product-based business, test the viability of your product at local swap meets, farmers markets or other community events to test what the public really thinks (and if they’ll purchase) from you.

Related: Hate Being Stuck Behind a Desk? 7 Business Ideas for You

Drive traffic to your website through simple Facebook Ads with capped budgets, or set up a simple Google AdWords account with a budget cap to test if traffic is going to your site.

You can follow these six steps by yourself for not a lot of money. It’s a fantastic way to test the viability of your small business before throwing all your time and money into an unproven idea.

This article was originally posted here on Entrepreneur.com.

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Vancouver, B.C.

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Start-up Advice

4 Tips To Secure Funding For Your Start-up

Here are 4 tips to help you secure funding for your start-up.

Ellie Martin

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Entrepreneurs seek to create new and ingenious ideas. Successful business owners are adept at looking at things in new and interesting ways. Their creativity fuels everything they do. Blazing through the initial steps of opening your own start-up can seem like a breeze if you’re endowed with this creative mojo, but you still may find yourself stuck at the very last step of starting your business.

Finding funding is undoubtedly the most difficult part of starting a business, and securing it requires the most creativity of all. Still, you can only stretch your creativity so far. Luckily, there are a few ways you can improve your chances of getting the money you need, regardless of whether you decide to attract angel investors or venture capitalists, or if you decide to apply for small business loans and grants.

Here are 4 tips to help you secure funding for your start-up:

1. Seek alternative funding opportunities

Before taking out a massive bank loan, consider these other funding options:

The vast majority of entrepreneurs either use their own funds to start their business or borrow money from friends and family. According to Forbes, 90% of start-ups fail, with 25% of them failing within their first year of operation. Due to this rate of failure, if it really is impossible for you to attract investors or secure venture capital, it is still best to avoid putting up your own money. Before draining your personal savings account, look into other options, such as crowdfunding. Research small business grants as well, as these can help cover gaps in funding.

2. Write a top-of-the-line business plan

If you’re interested in attracting investors, you’ll need a solid business plan to lure them in. Regardless of how wonderful your idea is, you must communicate that idea effectively and back up your claims with thorough research. A tightly organised business plan has the ability to assure investors of your industry know-how. It will give them a picture of how you plan to run your business and how accurately you can assess and address risks.

An entrepreneur who has a business plan with a punchy executive summary and a precise market analysis in hand is more likely to attract shrewd investors than one with only an inspired (and undeveloped) idea.

Related: Business Plan Format Guide

3. Network, network, network

The absolute best way to find investors is to network. Generally, you never want to cold call investors with your business ideas. You want to build relationships naturally with those in your industry and in your local community. Talk with other business leaders and go to local events. Offer to help other entrepreneurs and established business owners. They may return the favour by introducing you to reliable angel investors or they may steer you to a venture capital firm that helped launch their start-up. They may even offer to pitch in some of their own cash, if they really take to your idea.

Moreover, to make sure your networking efforts are effective, try to pinpoint the audience who would be most interested in your idea.

“Network selectively,” advises American author and entrepreneur, Steve Pavlina. “Take the time to build a profile of your ideal customers, and target your networking activities to reach them. Speak to those who are already predisposed to want what you offer.”

Building connections is a vital part of creating your business. You’ll need to build new ones and strengthen existing ones, not only to get the funding you need in the short term, but also to survive as a business in the long term. 

4. Be prepared to compromise

Asking for funding for your startup means experiencing failure time and time again. Most of the investors you’ll encounter will pass on your idea. You shouldn’t take this to heart. It’s all a part of the process. You may find that in order to get the funding you need you’ll have to give a small piece of the business over to an angel investor.

Your first crowdfunding effort may fall short, and you might have to incorporate feedback from backers and implement changes to the core of your idea to crowdfund successfully the next go around. Don’t be too rigid with your vision. If you’re willing to make some slight changes, you could have a much better shot at landing a deal.

Securing funding for your start-up is no easy task, but it is certainly not one you have to do alone. Enlist the help of friends, family, and business associates to help you craft a superb business plan, meet other entrepreneurs and investors, and make revisions to your idea. Use their input to help you find other ways to fund your start-up, such as small business grants and crowdfunding. Use these 4 tips for securing funding for your start-up, continue researching your target market and refining the way you approach investors. Without a shadow of a doubt, if you’re willing to seek the advice of others and compromise when necessary, you’ll find a way to fund your start-up.

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Start-up Advice

7 Strategies For Development As An Entrepreneur

What follows are seven simplified yet key strategies to develop yourself as an entrepreneur which are a hybrid of the authors’ practical experience and what he has learnt from very successful entrepreneurs, coaches, and consultants over several years.

Dirk Coetsee

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What lies behind you and what lies in front of you are tiny matters compared to what lies inside of you” – Ralph Waldo Emmerson


I am an entrepreneur, I surround myself with business minded people, I am privileged enough to be mentored by great leaders. I speak to visionaries, I write about them and learn from them.

What follows are seven simplified yet key strategies to develop yourself as an entrepreneur which are a hybrid of the authors’ practical experience and what he has learnt from very successful entrepreneurs, coaches, and consultants over several years.

A wise man once told me, “A higher level of consciousness does not mean you are better than anybody else it just means your mind sees from a higher vantage point and therefore you see clearer than most.”

Related: 8 Entrepreneurs Share Their Best Advice For When The Going Gets Tough

Those wise words lead us into explaining the first strategy:

1. Expand your consciousness

Simply put your consciousness is nothing but what you are aware of. By increasing what you are aware of through experience, study and honest self-reflection and by inquiring deeply into every aspect of your business as to increase the quality of your awareness you are enhancing the quality of your experience as an entrepreneur.

The second strategy often referred to as priming or framing is commonly used by successful entrepreneurs:

2. Priming or framing

Priming or framing is creating a positive mindset first thing in the morning which builds mental strength and the capacity to face the day with a very good attitude. This is, in essence, done by creating a morning ritual or habit for yourself which can take whatever form you prefer, as long as the outcome of it is a stronger and better you.

Some prefer meditation and/or prayer. Others repeat affirmations in the mirror. Some take the quiet early morning hours as the opportune time to read and learn more about their craft. Exercise is another way to start your day in a positive way. See this exercise of Priming or framing as an investment earning compound interest over a period of time.

nelson-mandelaGoogle whom any famous leader or entrepreneurs’ mentor was and a name or many will most certainly pop up. Nelson Mandela’s’ mentor was Oliver Tambo, Warren Buffet holds the Dale Carnegie certificate proudly displayed on his office wall in high regard, the famous investor Ray Dalio is still coached by Tony Robbins.

Related: (Podcast) Being An Entrepreneur Is Painful

That explains why you should:

3. Be willing to be mentored

When I facilitate training or a coaching session a common objection to being mentored is: “ Yes , but I do not know anyone that could mentor me.”

Honestly, what a lame excuse. Most servant leaders understand that it is part of their duty to society by leaving other servant leaders and/or entrepreneurs behind and are actually just waiting for your call.

It is really as simple as that, make your list of people that you look up to and want to be mentored by and call them, sincerely tell them how much you admire them and ask for guidance and mentorship. To those whom knock sincerely a door will be opened.

There is no such thing as a “self-made man” as everyone has received some help in some shape or form along their journey of entrepreneurship.

It is much harder to give up on something that you really have worked hard for over a long period of time as opposed to something that you have approached with half-hearted intent and little effort.

Therefore:

4. Hard work compounded by smart work

Hard work is not only something that you should do to stay ahead of the competition but a necessity in order to build resilience.

When you have lost sight of your purpose and vision as an entrepreneur decision making becomes drastically harder, your morale might be affected negatively, and your bank balance might suffer as a consequence.

So:

5. Ensure that you have constancy of purpose and a clear Vision

A very effective way of priming and/or framing is to remind yourself of your purpose and vision every morning. Make your Vision and purpose visual by displaying it clearly at your office. An entrepreneur cannot talk regularly nor enthusiastically enough about his or her vision and purpose. When you have not wholeheartedly bought into a vision and purpose how can you expect your team to?

ian-fuhrThose whom embody servant leadership of which the founder of Sorbet, Ian Fuhr is a prime example know that unconditional giving as a principle not only builds character but empowers others so that we can not only grow as businesses but as people.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

That is the reason for:

6. Giving without expecting anything in return

When you give of yourself unconditionally you have a true servant heart and your clients will not only be loyal, but they will love you in general. Giving unconditionally feels good and receiving unconditionally places no burden on you and creates a wonderful and vibrant work atmosphere, generally speaking.

When you only take a stand on your principles and values during good times yet allow them to crumble in the face of challenging times “your house is divided and cannot stand”.  Your principles and values must become ingrained practises and not just frivolous words.

Taking the aforementioned into account:

7. Have non-negotiable principles and values that you live by

As an example, if when respect is a non-negotiable value that you live by you will refrain from losing emotional control and will be willing to walk away from a conversation where someone dis-respects you.

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Start-up Advice

7 Ways A Tech Start-up Is Like Starting A Band

Building a successful tech start-up and putting together a band are more similar than most entrepreneurs and musicians would like to admit.

Alice Goldstein

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Building a successful tech start-up and putting together a band are more similar than most entrepreneurs and musicians would like to admit. The truth is that both of them require a lot of hard work, sleepless nights, self-induced poverty and other big sacrifices. Like a startup, says Alex Grossi of Quiet Riot:

“The process that once entailed a songwriter or record label spending countless hours and dollars recording, manufacturing and marketing music is gone. It is now up to the artist to figure out what the next move is in the industry.”

Succeeding in the music or the business worlds can also bring a number of great benefits. Becoming a successful entrepreneur can open up doors to new, more fulfilling projects and rewards. Moreover, you will have more control over your future ventures and have a big role in the success of any project you work on.

Visualising your tech start-up as a band can help you get creative, and may even help catapult your company to success. Because of this, I’ve put together a list of seven ways a tech start-up is like putting together a band, so you can put on your inspirational hat and make your company more than just a one-hit-wonder.

1. Be honest with your skill set

The first thing you need to consider when starting a band is the instrument you can play and at what level. The very same can be said for tech start-ups. Technology now influences virtually every single part of modern society, so you need to consider the skills you have available and determine how you can use them to create a good product.

David Ellefson, the bassist from Megadeth, owner of Ellefson’s Coffee and EMP label group shared his learning experience forming and playing in rock bands, in which he said:

“The idea of a rock band is selling this dream of the ultimate creative journey and endless freedoms. Yet, things like showing up on time, knowing your role (and respecting the roles of others!), disciplined practice, marketing &; promotion are as much part of the band experience as getting onstage and rocking the house each night.

Related: How Craig Bright And Brian Little Launched Rocking The Daisies

I learned many years ago that just because I was successful in music didn’t qualify me to be an expert in other fields, too. My successes came as a result of discovering my passion and honing in on skills that came natural to me. That led to relationships that opened doors for my success. We’ve all been blessed with certain skills, talents, and abilities and having success (and happiness!) usually lies with our passion allowing us to be the best we can be with those abilities in a chosen field.”

The good thing is that you don’t only have to focus on your particular expertise. Each band member offers a valuable set of skills that contribute to the quality of the music. In this case, your band members will be your start-up team. Take a look at what each team member brings to the table and make sure you are applying them to their full potential.

2. You need to be driven by passion

business-passionJust because you love music doesn’t mean making music will just happen, and in the words of Phil X the guitar player of Bon Jovi:

“There are no short cuts. You have to kick your own ass before you kick everyone else’s.”

Once you have identified your passion, the next step is acquiring the skills to realise your dream. This may seem tricky at first, but try to get creative and figure out a way to combine your skills and passions to build a valuable business.

If you are preparing to launch a tech start-up, you should definitely find something you are passionate about. Not only will this make your work easier, but you will always find motivation to give your best, even on bad days. Moreover, you may find that working on something that you really love will actually bring you joy and work as extra fuel when your tank is running low.

3. Put together a stellar lineup

If you were building a band and you knew the best drummers and bass players in town, you would definitely reach out and try to recruit them, right? Well, the same thing goes for your tech start-up. You should review all your options and scour your connections until you find the combination that best suits your vision.

Now, remember that putting together a killer lineup isn’t only about finding the best of the best. You also need to find a balance and make sure that the talent you bring on board will compliment the whole team. If you have two great candidates, but you think they won’t work well together, you are better off choosing the one that works best with the rest of your ensemble.

4. Practice makes perfect

practiceOne of the most important aspects of having a band is practicing frequently. Musicians already have a high level of dexterity, but that doesn’t mean the band will sound good right off the bat. By practicing together, you can make sure everyone is on the same page and organise your act.

As a start-up, the equivalent of having band practice is working as a team. Although everyone learned the skills needed to carry out their specific tasks separately, you also need to work as a team to make sure everyone is in sync.

A good way to do this is to give everyone individual tasks, and also assign at least one communal task a week. This will give you time to sit down with your team members, gauge that everyone is on the same page, and clear the air if they are not.

Related: Will.I.Am: The Man Who Took Music To Mars

5. Networking is the KEY

Any successful musician will tell you that networking is as important as the quality of your music. Networking with the right people can help you land gigs, get your music to the right listeners, and make a name for yourself by rubbing elbows with established industry giants.

The reason why I say that networking is KEY to any tech start-up is because it’s what will enable you to Keep Expanding Yourself. Building connections with established tech companies and influencers can help you get your name out there and land significant contracts. Not only this, you will also be able to gain valuable insights from the people that already thrive in your industry.

6. Find your audience

audienceMost bands already have a good idea of who their followers are or will be, and they focus on getting gigs in venues that will attract these fans. This makes their promotion easier and increases the chances of hosting a successful event. Not only this, in order to adapt to your audience’s changing needs and preferences, you must be ready to diversify wherever necessary.

Marq Torien from BulletBoys put it beautifully “Always know at some point you have to reinvent yourself in your music career. It’s a must, if you want to keep your audience and fans who love what you or your group does. All the great musicians and artists have done so at some point in their careers. Don’t have fear of diversity”. Marq stayed true to his words as their highly anticipated March 2018 Frontiers Records release “From Out of The Skies ” is truly one of their most diverse album to date.

Although it’s a bit more complicated, you should identify your start-up’s perfect clientele in the form of fictional buyer personas. This requires a good amount of market research, but it will give you essential information about your potential customer base. You’ll be able to create marketing campaigns that speak directly to your buyer personas through the channels they use the most as well as diversify based on changes in consumer demand.

Related: Kim Coppen-Watkins On Having And Maintaining Strategic Growth

7. Use all available promotion channels

It’s no secret that the most popular bands are featured on radio, television, the internet, and just about any other channel you can imagine. Besides boosting their collective egos, bands tend to take advantage of all promotional channels they have available because it guarantees it will extend their reach as far as possible.

You should also consider all the marketing channels you have available and take advantage of every single one of them. Now, if you start-up is in its early stages, you may not be able to invest huge amounts into advertising. That being said, you can always get creative and use free marketing channels such as social media platforms, blogs, and YouTube videos.

Finally …

Launching a tech start-up may not sound as glamorous as being in a band, but they are more similar than you may think. Always remember a successful tech start-up requires patience, a lot of behind-the-scenes work, the ability to adapt to change, and a well-organised team. Follow the tips outlined above to pave your way to success and enjoy the perks that come with it!

This article was originally posted here on Entrepreneur.com.

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