There are a whopping 28.8 million small businesses in the United States. Furthermore, U.S. small businesses employ nearly half of the private workforce.
What does this mean? The American dream is kicking with vibrancy and energy, and it has never been a better time to pursue your entrepreneurial goals.
With that being said, the question of how to start a business from scratch may seem like a daunting one. Fortunately, with the right education, research, and mindset, you’ll be well on your way to success in no time.
Let’s get into it!
Reflect Inwards and Know Yourself
Here’s the thing: if you want to create the next big idea, you’ll need a lot of patience, persistence, and drive to accomplish that goal.
It’s vital for all business owners to take an honest inventory of their assets and their weaknesses. You need to know what you can do and what you cannot do.
For example, if you’re planning to run a one-man operation, you’ll need skills in a variety of areas, including:
- Time management
Beyond your skillset, it’s necessary to reflect on your goals and intentions. Are you the type of person who’s risk-averse and fears the thought of not making or even losing money at first?
Or are you the type of person who is willing to do what it takes to succeed – even if it means initially stumbling around in the dark?
Finally, how do you plan to integrate the rest of your life into your business? Do you plan to work a stable job (even if you don’t enjoy it) until this is up and running? Or do you want to take the leap of faith into the full commitment?
Crystallize Your Business Idea
We’ve all had those million-dollar business ideas. But we also know that many businesses fail. Finding and crystallizing your business idea takes time and dedication.
Identify the Problem
As a business owner, you must think about the problems that your potential customers may face.
What isn’t working in their daily lives? Why do they have fears or concerns?
Identify the Solution
Chances are, you’re probably not reinventing the wheel (if you are, more power to you!). Instead, you’re probably looking into better solutions for an existing problem.
You don’t have to be 100 percent original in what you do in order to succeed.
For example, every new restaurant that emerges on the market isn’t trying to be the only restaurant. Its owners are simply trying to outdo their competition by providing a better customer experience or better food.
Innovate What Hasn’t Changed
Amazon, Tesla, Airbnb, Uber. What do all of these household names have in common?
They weren’t the first of their kind to offer a particular solution, but they were all leaders in providing innovation in slower-moving markets.
For example, Amazon started by selling books online. They eventually branched out to selling everything except live humans online. While they weren’t the first marketplace to introduce online shopping, they innovated their experience in a way that makes their platform seemingly irresistible.
For years, when people traveled, they stayed in hotels. Airbnb created an entirely new experience that offered affordable lodging options for travelers and a potentially lucrative income stream for homeowners.
Research, Research, Research
What do successful business owners have in common?
They know exactly what’s happening within their market, and they know what their competition is doing as well.
Understand Your Audience
To successfully sell a product or service, you must identify your target demographic. In other words, who is your ideal consumer and why does he or she need what you have to offer?
The more you can cultivate the image of this person, the better you can tailor your marketing strategies.
Understand Your Competition
Once you know your audience, you need to research your competition. What companies does your target demographic currently use? Where can you, the new business, create a niche for yourself within that existing landscape?
Again, you don’t have to remove the competition. You simply have to do things better than they do.
Figure Out Funding Options
Depending on your business, it can cost you a few dollars to several thousands of dollars for initial start-up costs.
Fortunately, there are several options available to entrepreneurs, including:
- Small business grants
- Traditional loans
- Crowdsourcing funds
- Venture capital
Many business owners dip into their own savings to cover the initial costs. Again, this will all depend on your risk levels.
Get Your House in Order
Do you need to hire any staff? What about your website? Do you have potential clients already lined up?
Registering Your Business
Your company’s structure depends on your business needs and execution. Here are some of the most popular registration options:
Sole Proprietorship: This refers to the one-man business. If you work independently, this is the most common business structure. You’re entitled to all business profits, but you also hold liability for accrued damages or debts.
General Partnership: Refers to two or more persons who share the profits, losses, and business management.
Limited Partnership: One or more general partners and one or more limited partners.
Nonprofit Corporation: These are common structures that serve the public interest without seeking profit.
Limited Liability Company: Refers to one or more individuals who sign a special agreement. There may be special provisions for assets, profits, and losses.
Taxes and Finances
Working for yourself is exciting, but it also makes you liable for the financial side of things. When you get started, you’ll want to open a business bank account.
You’ll also benefit from hiring a good accountant. This individual can help you with your deductions and business needs.
Get More Tips on How to Start a Business from Scratch
If you’re sitting on a dream, there’s no better time to transform that hope into reality. New businesses prosper every day, and the world likely needs what you have to offer.
Interested in learning more about opening and running a successful business? Be sure to check out our blog!