Starting your own business can be a difficult journey. There are many opportunities for growth, but there are also many things that can go wrong and interrupt your path toward success. Entrepreneurs need to keep certain common-sense steps in mind when they are starting their businesses. Sean Glasser, the CEO of BLUETRACK, Inc., explains the process of starting your own business and points out some pitfalls that can happen along the way.
Research the Market
Every business starts as an idea but not every idea is a good one. It is important for you to understand the playing field you will be entering. Who are the competitors? What are their offerings? Can you compete head to head or via an underserved niche? Is there enough demand? Is there room for you to make a profit doing it?
Research is the number one thing any new entrepreneur must partake in. It is relatively cheap and easy to do in today’s digital world but skipping it can lead to critical failure.
Figure Out a Plan
“I hear a lot of potential entrepreneurs bring up the mention of a business plan and you can see the fear in their eyes. Honestly, you don’t need a formal 100-page business plan to move ahead in entrepreneurship, but you do need a plan.” Generally, a plan should answer the key questions that any experienced skeptic may throw in your direction (and the ones that your research should have covered):
Who are your competitors and what sets you apart?
What is stopping a competitor from copying your approach?
Is there enough demand for your offering? How do you know?
How long can you keep it operational without sales?
How do you plan to scale or grow in the future?
What will you do if your initial assumptions prove incorrect?
There are many more questions that can be covered but this gives you the general idea of what a business plan should address. The whole point of a plan is to iron out the problems on paper before you face them in the real world.
Think About Financing
There are generally two ways you could finance a business: Your money, or other people’s money. Starting a business with your own money can be tough, especially if you don’t have a lot of it to spare. However, it’s not impossible and it’s my personal choice among the two.
– You have full control over all decisions
– You earn more of the profit later on
– Your decisions tend to be smarter, since you have skin in the game
– Your business tends to be more creative in problem solving
– Losses will be felt harder
– Starting and growth may be harder & take longer to accomplish
Starting a business with other people’s money sounds great on the surface but should be carefully considered as it does involve risks. While obtaining funding from a bank, friend or venture capitalist will differ, they all share the following:
– You can usually start sooner and grow faster in the beginning
– You can sometimes avoid personal liability if you fail
– You can sometimes get valuable mentoring
– You usually do not have full control over the direction
– You can earn a smaller piece of the pie if you make it big
– You may end up owing money to someone if you fail
– Your business plan will be scrutinized much closer
– You may not have that extra push that someone with skin in the game has
Get a Good Attorney & Accountant
There are two professions that are expensive but crucial for starting and growing a business. You should research and retain a competent business attorney to start the legal forming of your business. While this is not necessary in all states, it is highly recommended as they can guide you through the reporting and filing requirements, if any. Just as important is a qualified CPA who will help you set up your accounting books and can act as a guide during the early days to make sure you are on the right track toward profit.
Register with the Government
While every business and jurisdiction is different, all businesses will need to register with some kind of government entity. This could include the state for foundation purposes and for sales tax collection, the IRS in order to get your EIN (Employer Identification Number), Customs & Duties if you import, or any number of licensing jurisdictions, depending on your type of business. It’s a daunting task at times to deal with all this red tape but cannot be skipped if you want your business dream to come true.
Sell First, Everything Else Second
Business cards, signage, titles, coffee machines, etc. are all great but you need to make sure your business is focused on its primary purpose: making money! Whatever your enterprise, there will be some form of selling involved and you need to make sure you are committed to that above all else, especially in the early days. Without this, you can kiss everything else goodbye!
Listen, Learn, Improve
Sure, you are smart and know what works, but everything can be improved. In order to thrive in today’s competitive environment, you need to constantly engage your clients, ask them questions and LISTEN carefully. You have to continually learn and improve your offering to serve the market if you hope to compete with the other businesses out there and grow into a successful enterprise. Without this step, you are just leaving your future to chance.
The Journey of Starting a Business
When you follow these steps from Sean Glasser, you will have an easier time starting your new business and your entrepreneurship journey. Making sure that you have paid attention to all of the legal requirements of starting a business is key. When you have all of your requirements in order, you can start making money with your new idea.