When a great new business idea hits you, the excitement is inspiring — especially if it’s something you’re passionate about. Yet, taking those first steps toward creating a new startup can also be overwhelming. Particularly if you want to try and start a business without a lot of available resources or money, it can feel challenging to know where to start and if such a project is even possible without immense resources to begin.
However, with the right steps, entrepreneurs can launch any new business idea they might have. It does take a considerable amount of planning and plenty of hard work, but you can be on your way to becoming a small business owner with the right dedication.
To move forward with your great business idea, you’ll need to plan on following these six steps:
- Do your research
- Build a business plan
- Legally form your business
- Seek feedback and support
- Develop a growth strategy
- Prioritize your customer base
For simplicity’s sake, we’ll use an example of a graphic designer preparing to launch their own small business throughout this article as a point of reference for each step. Let’s see what it takes to get your startup off the ground.
Step 1: Do your research
Before you move forward with your business plan, you need to conduct thorough, extensive research related to:
- Your business idea
- Your target market
- Your likely competition
Researching before moving forward can feel tedious, but it’s one of the most important steps in the process. More than 30% of United States startups fail because of a lack of market fit, so it’s important to understand what is out there and how you can better solve customer problems through your product or service.
You’ll want to research answers to questions like:
- What is the problem customers in this field experience?
- Are there any other businesses already operating your dream business?
- What are other companies doing to solve the problem in other ways?
- How do customers feel about the existing solutions to their problem?
- What niches within this field are lacking that you can help solve?
Some people find this research to be a bit disconcerting. They may find that another business, or even several other businesses, have begun companies similar to what they have to offer. However, that doesn’t your dream of becoming an entrepreneur should stop. Instead, look closely at the problems with those current solutions to see where customers still have a need. Uncover opportunities to pivot your offerings just enough to differentiate yourself from others in the industry and increase your appeal for customers.
Consider our graphic design startup example. You’ll quickly find that many options exist for businesses needing a graphic designer to help them create images and logos. Rather than giving up, additional research might find that:
- There is a shortage of graphic designers in your particular geographic area, and you can limit your market to local businesses. Connecting personally with businesses to learn more about what they envision for their graphics can be a great pull.
- Many customers want to combine their graphic design services with SEO consultation, and you can connect with potential team members who can offer optimization services.
- Few graphic designers specialize in particular niches, such as constructing or roofing repairs, but you have experience with this industry. You can pivot to focus on these organizations.
This market research will help you launch your new business more effectively and avoid wasting limited resources.
Step 2: Build a business plan
Research indicates that small businesses with a formal business plan are 16% more likely to be successful than those without, so taking the time to outline your plan to build and grow your business will likely affect whether you succeed in materializing your dream. A business plan is also necessary for certain financial applications if you plan to take out any loans for your business. It can also help you avoid costly mistakes.
At ZenBusiness, we recommend that new entrepreneurs begin by compiling the market research they’ve completed in the first step of this process. Make sure to include key details, such as:
- An executive summary that provides an overview of your new business
- How pricing structures work in the industry and what yours will look like
- Who your target customers are and how you will reach them
- What your business model will look like
Then, spend time crunching some numbers to better understand your launch expenses and your operating budget. Create sales goals and know what you need to do to meet them. The right business plan will capture your business dream and the path you will take to achieve it.
For our graphic design example, you’ll want to create a business plan that details:
- The niche market of targeting those in the carpentry and roofing industries
- Your operating budget of $1,500 per month for advertising and equipment
- A startup budget of $4,000 for new equipment and software needed
- A pricing structure to help turn a profit
- A marketing plan, including a website, advertising through Google, Facebook, and LinkedIn, and creating pages on reputable freelance platforms
If this is your first business plan, don’t be too intimidated. Taking it step by step can help you see how achievable starting a business is. ZenBusiness also has resources to help you create the best business plan for your organization.
Step 3: Legally form your business
Legally forming your business will be the next step. Creating legal companies impacts businesses as they prepare to file taxes to the state and Internal Revenue Service (IRS). It can also provide benefits to business owners in terms of liability and insurance. If your business grows enough that you end up hiring people, you’ll be glad that you took steps to form your original business now. You can reserve your company name and ensure that your organization takes shape precisely how you imagined it.
At ZenBusiness, we can walk new entrepreneurs through the steps involved in legally forming a new business. You will generally find that you have three main options:
- A limited liability company (LLC) creates a company separate from the owner, limiting personal liability for the business’s debts or other assets. Simultaneously, it allows owners to be taxed on their profits only at the personal level, avoiding the “double taxation” that can occur with certain corporations. Those who prefer greater flexibility will want an LLC.
- An S corporation offers many of the benefits of an LLC, including avoiding double taxation, but serves businesses that are more complex and need more structure. There are rules and regulations concerning owners, shareholders, and other leaders within the corporation.
- A C corporation is for larger organizations that might do business internationally. It’s easier to sell shares in the company at this level, making it a better option for larger organizations. This arrangement does carry the potential for double taxation.
In addition, you can have a sole proprietorship, general partnership, or a limited liability partnership (LLP). If you have a co-founder, you might want to consider if any of these options will work best for you.
You can read more about the benefits of an LLC, how it compares to other options, and determine if it’s the right choice for you. If you believe that you might grow your business larger than an LLC, see if forming a corporation would work better for your new company.
Continuing with our example of a graphic design company, you’ve done the research and decided that you’ll want to start an LLC. This will give you the flexibility you’re looking for, particularly when adding future employees. As a North Carolina resident, you’ll get the process started by finding a name, appointing a registered agent, and filing your Articles of Organization with the state.
Step 4: Seek feedback and support
As you begin to form and grow your new business, you’ll want to solicit feedback and advice from various people. You’ll find that fellow entrepreneurs might have good suggestions, but you don’t want all of your information and guidance to come from these sources. Instead, focus on soliciting and gathering feedback from your customers and target base. The better you get to know your customers, the clearer your path toward success becomes.
Of course, you also don’t want to run the risk of frustrating or annoying your customers, which would hinder your relationship with them. Instead, we recommend the following:
- Initiate the conversation at the point of sale. When you give the customer the product they ordered or finish providing them with a service, ask them if you met their needs.
- Build a culture of open communication through social media and your social network. Encourage customers to ask questions or respond to your prompts to keep them engaged with the brand.
- Monitor social media and set up Google alerts to know if people discuss your business or industry in general.
- Let customers know that you always welcome their feedback and look for ways to improve. Then, take action based on their advice and let them know that their input was received through your behavior.
As a graphic designer, clients might be your best source of feedback in terms of easy delivery, review of designs, and obtaining referrals for new business.
Step 5: Develop a growth strategy
Growth hacking is an entrepreneur’s secret weapon. Knowing how to make a concrete plan to drive growth can help you thrive in the competitive world of entrepreneurship. It’s common for new business owners to find this overwhelming, but there are a few key actions to get started on the path toward attainable growth and business success.
Growth hacking involves employing strategies that will help you attain a lot of growth very quickly. There are also several growth hacking strategies that you can learn from the founder of the term through GrowthHackers.com.
As an overview, you’ll want to focus on:
- Making sure your product accurately reflects what people want to see
- Engaging directly with the most interested potential customers, defining them very narrowly, to spark favorable attention
- Using social media to create content people want to engage with
- Creating excellent customer experiences that encourage people to talk about you
Returning to our example of a graphic designer, you can start by focusing on a specific area of your business you want to grow. Consider your social media presence. You can outline a growth strategy that will increase your follower count on specific social channels and provide a way to A/B test different types of content to determine which one drives the most engagement.
Step 6: Prioritize your customer base
Once you’ve created your business, you want to prioritize your customer base. Make sure you maintain a strong relationship with the customers who have purchased your products or services. Not only will they be most likely to repurchase your product, but these early-stage adopters will also let you know how well your minimum viable product (MVP) meets their needs and fill the needed role of word-of-mouth advertising.
People naturally trust recommendations that come from people they trust more than from paid advertisements from brands. Therefore, building a base of people who’ll vouch for your products online and with their friends and family will compliment your growth hacking and help your business spread.
Finishing up with our graphic designer example, an easy way to use your existing skill set to “wow” your existing customers is to create a personalized graphic to send them on their birthday. This shows that you value their relationship more than just what they pay you in completed projects.
Start Your Business Today With ZenBusiness
A startup business is undoubtedly an exciting and thrilling endeavor. Being your own boss and growing a successful following can help you realize your dream. When you have a great startup idea and want to use it to create a successful business, consider the steps and ideas outlined above. Walking through each part of the process armed with the services and templates at ZenBusiness can make the entire process straightforward and help you begin your dream business.
Starting a Startup FAQs
- How do you start a startup with no money?
Starting a business with no money can be a challenge, but it’s not impossible. You have a few options. You can begin by leveraging free services as much as possible — such as building a following on social media and creating web content to showcase your skills. Brands can employ SEO strategies to make their websites more visible to customers making queries through a search engine. You can also take advantage of the latest means of communicating with customers, such as podcasts, to raise money and keep the business moving forward.
You also can take out a business loan to help you cover initial startup costs. Some new businesses will also fund their companies through angel investors. Angel investors offer new businesses capital to begin their businesses. Venture capital can play an important role in securing funding for high-potential businesses. However, to secure this type of funding, you need to have a business plan that the investor will approve and view as profitable.
Other new businesses will make use of nontraditional fundraising options, namely crowdfunding. This strategy invites regular people, instead of banks, to invest directly in the businesses that serve their communities.
No matter what, make sure you have a well-written business plan to know what you want to offer as a business and how you plan to meet your goals, including repaying any loans taken.
- When should you start a startup?
The exact time to begin a startup will vary considerably from person to person. Generally speaking, though, you should not begin a startup until you have:
- Completed your market research and analysis. You must know who you are targeting, who already serves this market, how you will differentiate yourself, and where customer needs are not being met.
- Created a business plan. Have a complete plan, including your budget outline and sales goals, to guide your business through the challenging first years.
- Created a plan for growing your organization. Know your marketing strategy, including how you will reach your target customers and interest them in your product.
When you have begun to create a plan with research, you’ll be on your way to creating a successful startup.
- How long before a startup becomes profitable?
This answer will depend on the business sector that your startup will operate in, your amount of startup costs, your prices, and the level of competition you encounter. A business with few to no startup costs may be able to declare a profit within the first year of operating. However, a new pet grooming business with various startup costs may take longer to clear any costs and begin turning a profit. In general, many startups see profit beginning about two to three years after starting the business.