There are many different things to consider when starting a business...
The process may seem overwhelming, daunting or even terrifying at times, but there are a variety of resources and steps you can take to help get your business off the ground. And even before you begin to tackle the steps below, ask yourself the right questions in order to get initial market validation.
Step 1: Start with a business plan
Starting with a business plan is a great way to get organized. Putting a pen to paper will force you to look at the bigger picture and assess your value proposition, marketing strategy, business structure, financial plan and operational plan. It’s also used as a guideline to hold yourself accountable, and will help you understand how to execute starting your business. That’s not to say that your business plan is set in stone, but use it as a working document and don’t be afraid to make revisions as your company grows or changes direction. It’s also essential to have a thorough business plan when looking for financing, whether you’re trying to get a loan or attract investors. (Check out the Small Business Development Center’s LEADING EDGE program if you are looking for an affordable resource to help write your business plan.)
Step 2: Determine the legal structure of your business
When registering your business, research which structure will have the best legal and tax implications, assess the pros and cons, and determine how your chosen structure will affect your business now and in the future. Whether it is a Sole Proprietorship, Limited Liability Company, Cooperative, Corporation, Partnership, or S Corporation, doing proper research in advance will allow you to avoid revisiting this step in the future. If you’re business is located in Colorado you can search the Secretary of State database to see if a name is already being used.
Step 3: Create your financial projections
Understanding your budget is a great way to determine if you have enough funds to get your business off the ground. If you’re short on cash, what are your options? Do you need debt or equity financing? Are you able to bootstrap? Creating realistic financial projections will not only help you plan for the future, but it also tells lenders that you’re aware of the potential profit and loss of your business. There are free resources and courses that can help you develop a realistic projection.
Step 4: Develop a network
Creating a positive network of enthusiastic, like-minded individuals to help propel your venture forward is essential. You can approach this in a number of ways. A few ideas include joining a local chamber, participating in a regular mastermind (or other entrepreneurial meetup like 1 Million Cups), take an entrepreneurial course (like our Ice House Entrepreneur Development Training) or find a mentor you can bounce ideas off of. Doing all of the above makes a powerful combination too!
Step 5: Test your market
Once you’ve determined your target market, it’s time to test your product or service. Finding creative and inexpensive ways to see if your business gives the people what they want is absolutely critical. Utilize your network to help with your market research. Figure out how to reach your market, and then listen to their feedback. Do you need to pivot your idea? Who are your competitors, and how do you stand out? Knowing your customers’ needs and solving their problems will result in creating a successful business.
Now it’s time to set aside the fear and do it! But do know that success rarely happens overnight. In talking with many of our borrowers, it’s their determination, grit, and perseverance that aids their ability to launch a lucrative venture.