How to Start a Business: A Guide to Starting a Business
Entrepreneurship is an idea that appeals to many, but figuring out how to start a business can sometimes be so overwhelming it scares people away. What should you sell? Who should you sell to? How will you get customers?
If that’s not enough, every other week there seems to be a new business trend online. There’s chatbots, Facebook ads, Instagram influencers, and many more. What should you pay attention to? What actually matters?
If you’re serious about starting a business, stop overthinking and start putting in the work to make it happen.
In this article, we'll take you through how to start a business in 2021, step-by-step
How to Start a Business
Starting a business involves planning, making financial decisions, doing market research, and acquiring knowledge in areas you never thought you would learn about before. We created this 14 step guide to starting a business to help you put your best foot forward today.
It is important to note that there is no one size fits all model to starting a new business, but these steps will help you organize your thoughts, and iron out important details so when you launch your business you have answered all the important startup questions.
Step 1. Ask Yourself if You’re Ready
There will never be a right time to start a business. If the stars couldn’t align for Romeo and Juliet, they probably won’t align for you either. But you can either look at that as the thing that holds you back from starting or use that to push you to start today.
When it comes down to deciding if you’re ready to start a business, it’s more about mindset than timing. Are you in the frame of mind right now to win? If you didn’t shout heck yeah at your computer screen, you might need to re-examine if entrepreneurship is the right path for you.
Step 2. Determine What Type of Business to Start
The next step of starting a business is to figure out what type of business to start.
Is there a niche that you’re particular passionate about? Are you looking for a business that you actively work on or just own? Are you looking to turn your hobby into a business? These are just a few of the questions you need to ask yourself before starting a business.
You can start everything from a Shopify store like MVMT Watches did to a freelance business. You can choose to build a business by yourself by owning a consulting business or you can build a company with a team such as a manufacturing company or a restaurant.
Step 3. Choose a Business Model
After coming up with a business idea, think about how you’re going to execute it in your niche. This is where a business model comes into play.
The business model is a strategy for how you’re going to provide value with your idea and make money off of your customer base.
Here are six types of business models to consider:
- Affiliate Marketing: Promote other business’s products and services online, and receive a commission for each sale you make with this passive income idea.
- Freelancing: Provide a service to other individuals and businesses using a skill that you have, such as advertising, writing, designing, or programming.
- Coaching and Consulting: Become a coach or a consultant and sell your expertise, advice, and guidance.
- Information Products: Package and sell your expertise in ebooks, worksheets, templates, and online courses.
- Software as a Service (SaaS): Create a piece of software or application, and charge users a recurring subscription fee.
- Ecommerce: Use a service like Shopify to set up a website and sell physical products online.
Step 4. Do Market Research
Next, you need to get clear on your target market. In other words, who are you going to serve?
This step is absolutely vital.
As the marketer Philip Kotler once said, “There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market.”
Here’s the trick: Make sure you are part of your target audience.
Step 5. Find a Problem to Solve
When learning how to start an online business, it’s important to note one key thing: all businesses solve a problem.
Plumbers fix leaking pipes. Hollywood movies fulfill people’s boredom, curiosity, interest, and the need to escape and relax. Clothing brands help people express themselves and feel attractive.
Step 6. Set Realistic Goals and Expectations
One of the biggest reasons for failure in business comes from naive expectations. I constantly hear stories of people pouring thousands of dollars into ads thinking they’ll triple or quadruple their money only to end up with that big, fat zero.
So, let’s try to paint what a realistic scenario looks like. Your first year in business is all about failure. Why? Because it’s your first business.
Most people approach their first business with a sense of false optimism. If that guy can do it, so can I, you casually think to yourself. But what you casually ignore is the fact that that guy is on his fourth business or he’s been running it for seven years.
Step 7. Create a One-Page Business Plan
Unless you’re going to the bank to get a loan, you don’t need to overspend time on your business plan. On a piece of paper, handwrite a plan for your business. While this may be a bit voodoo (sorry!), I find that whenever I handwrite goals, I’m always more likely to achieve them. I always carry my goals around with me which helps remind me of them so I can’t escape them.
Step 8. Get Feedback
So now that you’ve got the idea, you’ve set some goals, and you’ve created a plan, it’s time to get feedback on your idea. This stage has been known to kill many ideas (and sometimes even good ones).
The point of the feedback stage is to get a second opinion on how you can improve your idea. Instead of asking for feedback on the business idea, ask for feedback on a certain component of it. And whatever you do, don’t ask someone you love. Trust me.
Step 9. Find a Way to Pay for Your Business
The most common way people pay for their business is through their 9 to 5 job. Avoid quitting your day gig until you’ve generated enough to pay your costs, taxes, and yourself with a six months runway. In the beginning, you likely won’t be able to pay yourself, as you’ll need to reinvest your earnings back into your business so you can scale the business faster.
Step 10. Pair Up With a Partner
Solopreneurship is on the rise and so this won’t apply to all. But success in business sometimes comes in pairs. Rome wasn’t built in a day and neither was any successful business. There’s going to be a lot of time and resources that’ll go into your business. And having someone you trust to build alongside you can allow you to break up the workload so you progress faster. It’s also great for holding you accountable.
Step 11. Name Your Business
Coming up with the perfect business name can be hard, especially if you want a .com domain to go along with it. You can use a free business name generator to help you come up with a name.
Step 12. Register Your Business
In some cities or states, you don’t need to register your business until you’ve earned a set amount of income or profit from it, so you’ll need to do your due diligence to see what laws apply for you.
However, some entrepreneurs register their businesses on day one to prevent liability. For example, if you’re incorporated on day one and you get sued in the early stages of your business, your business takes the hit instead of you. So, the sooner you incorporate your business, the safer you (personally) are from a legal perspective.
Step 13. Create Your First Product or Service
There are a number of products or services you can create to sell to your audience when starting a business.
Step 14. Promote Your Business
The most important part of starting a business is the promotion stage. Getting your business in front of people will help you generate sales so that your idea turns into a business.