To begin with, what is a start-up company? A start-up company is a new business venture you come up with as a matter of ambition and innovation to offer new services or goods for a specific market. This could be in form of a partnership or sole-owner business that has a specific target population. These are often unique ventures that eventually become the best at what they do.
Many people are surprised when they hear a prominent businessperson talk about how they started out small. But every new business has to start from scratch, as an entrepreneur shifts an idea to reality.
51% of Inc. 500 CEOs said they chose entrepreneurship because it suits their skills and abilities.
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Most people don’t realize that launching a start-up business happens step by step. You have to know exactly what must happen when you start your business. There are specific things you need to adhere to in terms of protocol or legal requirements. It’s essential to inform yourself before starting a business. Here’s what you need to know:
1. Test Your Business Idea For Relevance
You have a good business idea, and everyone you’ve described it to says it’s a marvelous idea. Still, you haven’t checked whether it’s applicable or functional. It’s critical that your idea has relevance, especially in terms of the consumers. Testing for the relevance of your start-up idea requires you to begin with a field study, and then finalize it with a desk analysis of the idea. Look at the market you’ll be working with, and understand if they’re willing to spend cash on the products you will be offering. You could also decide to test-drive your products and services with a sample of your market to check the response. If your products are liked, then proceed with more production, or stop if the response is not good.
2. Choose The Right Name For Your Company
A good name is as good as a beautiful face. Researching the perfect name is critical for business relevance. So get out there and listen to people’s suggestions. Check the meaning of the names you choose in all languages, so you don’t accidentally create a company name that some people will find offensive or odd. But don’t overthink. Some people who find your name inappropriate will not buy anything you produce, but some will buy just because of the amazing name.
3. Access Your Finances
It’s essential for you to have starting capital to start your business. You may have savings that could help you start the business, but if it isn’t enough, you’ll need to know how to access other sources of capital. You might go to a bank, but you’ll want to know their interest rates and terms of repayment before asking for a commercial loan. You could also get friends to help you fund your start-up, as long as you both agree on how you’ll pay them back.
4. Select The Correct Business Structure
Start-up businesses have specific structures. For instance, you might decide to start the business as a sole entrepreneur or as a partnership. This will depend on your financial capabilities as much as your idea. The structure you choose may determine whether your business grows or crashes. You have to know the merits and drawbacks of being a sole owner compared to being in a partnership. Weighing the options enables you to choose the right structure for your business. Decide whether you want to be the only decision-maker, or if you’re willing to listen to a second opinion.
5. Build Your Company Team
A start-up company always has employees who will work hard to ensure that the products and services are of good quality. It’s critical that you hire the right team to build your company. These people should have the same level of enthusiasm as you do. Ensure that you bond with your employees to know whether they’re happy with their job and to let them know that any concern that arises will be well taken care of. It’s fundamental that you hire professionals, not amateurs.
6. Know How To Handle The Legal Issues
A small start-up has five major legal considerations. One needs to be aware of taxation law, employment regulations and insurance. You’ll definitely have to know how and when to pay taxes in order to keep your business running. Workers also have rights and requirements that are protected by law – so make sure those workplace provisions are in place. Insuring your business is another must-do. To be on the safe side, take out an insurance policy for your business, however small it is.
7. Offer The Right Pricing
It’s obvious that all entrepreneurs want profits from sales. The price you come up with should be correct in terms of the quantity and quality of the goods you offer. Be aware that expensive goods don’t sell well, while cheap ones do sell. The affordability of your goods can be deduced by researching your clients. They’ll only buy what they can afford.
8. Learn More About Your Competitors
You’ll be very lucky if your business has no competition. Competition comes from other companies that produce similar products and target the same market you do. Competition always keeps entrepreneurs on their toes and ensures that they remain relevant to clients. The best way to beat the competition is by offering better quality and more affordable products. So is being first. Developing new ideas before your competitor keeps you relevant in the market.
9. Learn How To Market And Sell
It’s important for you to learn the art of marketing. Only by doing so can you successfully come up with appealing products that clients will buy. Create compelling advertisements for your products and come up with promotions to impress your customers. It’s vital for you to learn the best way to make sales. For instance, you could choose between direct client contact or online selling and delivery. If you learn about your clients’ lifestyle, you’ll figure out what option to use.
10. Solve Consumer Problems
Regardless of how effectively you provide quality goods or services, you won’t please everybody. People will complain about your products, product delivery or the terms of payment. It’s very important to consider these concerns, because if you respond to them appropriately, you will keep your clients. Assuming these concerns mean nothing will cause you to lose clients.
Not all startup businesses will flourish, in fact many fail – and knowing the reasons for failure before you start can actually give you the edge. Alternatively, you can learn what NOT to do before starting your business, by watching the following video with Evan.