Building a company is not that different from constructing a house. Sure, you know that you have to build foundations, erect walls, install doors and windows and then wrap it all up with a roof. However, the order in which you do this is crucial for the structural integrity. It’s similar to launching a company, seeing as how preparing for the workload increase before you even acquire your first client may be unnecessary and distracting. In other words, you need to start from the bottom and work your way up. With all of this in mind and without further ado, here is a brief rundown of all the vital steps you need to take when starting a company in order to ensure it is on its road to success.
RELATED POST: TIPS FOR ORGANIZING YOUR SMALL BUSINESS
1. Validate your idea
Usually, people leave their current employment only after they’ve had a ‘million-dollar idea’ of their own. Still, doing something like this without validating your idea first is simply too risky. So, your first step should be looking for the right way to validate your idea. Focus on your target demographic and make a brief survey to find out whether or not they will be interested in your services. Then, try to establish whether the problem you are trying to solve is a top-tier one. Finally, check the internet for any similar ideas, offers, and services in order to see just how unique you actually are.
2. Do the research
The second thing you want to do here is to make sure that your business actually has a fighting chance in the industry, which can be done in several ways. First off, make sure to look for all the competitors you will have and try to be honest about whether or not you actually stand a chance. If your offer doesn’t bring anything new to the table, this could be quite a problem. Next, you need to ensure that there is actually a market for your product out there. Heading out into the unknown on your first entrepreneurial adventure seldom gives positive results.
ALSO READ: HOW TO GET MONEY FOR YOUR STARTUP
3. Focus on the business plan
Once you know your idea is a valid one, and once you have all the details, you can start forming a business plan. For this, you will need a company description, an executive summary, market analysis and a clearly defined company structure. Furthermore, it is also desirable to have at least an outline of your marketing and sales strategy at this point. Most importantly, however, you need to make a fiscal projection for the following period. One way to do this is to take a look at similar companies on the market and use the median as a base value. On the other hand, if you are the first one on the market, this might be a bit trickier and may involve more guesswork. You can check here for details about company incorporation.
4. Start thinking about your brand
The next step is the one regarding the public image of your company. For this, you need to resolve several important issues like the name of your company, its logo, its corporate colors, product packages and much more. The name is a first major issue you have to tackle, seeing as how it has to be simple, descriptive and easy to both memorize and pronounce. Apart from this, it also has to be available, which, considering the number of small businesses on the market, is in no way easy. Therefore, make sure to register a business name as soon as you come up with an idea that fits all of these criteria.
ALSO READ: 5 TIPS FOR STARTING A WAREHOUSING BUSINESS
5. Gather the funds
Finally, you need to gather enough money to start your business, which is why it is important that you have an accurate estimate of the amount you need. For instance, registrations, licenses, equipment, employee fees, bonuses, office lease and supplies all have their fixed price but are just the tip of the iceberg of all you need to take care of.
Apart from this, keep in mind that your company may not become profitable for months, which means that you will also be obliged to have some capital in reserve, in order to boost your cash flow when the need arises. Luckily, in 2017, there are more than a few ways to gather the necessary resources, ranging from traditional loans to crowdfunding and factoring.
Once you have all of this out of the way, the real struggle begins. You see, approximately 9 out of 10 businesses fail within their first five years. Needless to say, an error in the formative stage of your company may cause some serious damage further down the line. This is why you need to give it your best while planning, organizing and establishing your company in order to give yourself a real shot at success.