Many people today want to start their own venture. Some do it for the promise of having a lucrative career, while others prefer this option due to the flexibility and freedom of being a business owner. However, starting a business is a lot more complicated than meets the eye.
You simply can’t wake up one day and say, “I’m going to start a business today.” The main reason is that there are necessary steps to take before you can actually start a business of any kind. Preparations and planning are among those steps, alongside tons of paperwork your government requires you to file.
Of course, you can choose to avoid such steps if you wish, but that would be a serious mistake that could lead to business failure sooner than you think. With that in mind, here are a few steps to take before you actually consider starting a startup business.
Market Research
Your business endeavor depends on the market research you conduct before you launch your business on the market. Research is a crucial step, mainly because it will provide you with the necessary information required to understand the market itself, as well as its dynamics.
Simply put, with the right kind of information, you’ll be able to make more strategic decisions and avoid common pitfalls that await every inexperienced entrepreneur.
As an example, market research helps you test your business idea and determine if there’s, indeed, any market demand for your products or services. That said, 42% of all startups fail because there was no market need for their products and services. Here are some other factors research can help you do:
- Identify your target audience
- Understand your audience’s preferences, needs, demands and expectations
- Help you conduct a competitive analysis
- Help you create a marketing campaign
- Help you understand how to stand out by becoming unique
Register a Business Name and Structure
This step is absolutely necessary if you want your startup to operate legally after the launch. As mentioned before, you can skip it or do it later, but then you’re at risk of getting a hefty fine from your friendly neighborhood government. Bureaucracy always catches up to you, so you might as well deal with it now.
The first order of business is to choose a business structure. The structure will determine the amount of paperwork that needs filing, as well as determine the necessary licenses, permits, insurance, and tax obligations. It will also determine the amount of liability for the owner. Therefore, it’s recommended to start out as an LLC (Limited Liability Company) to protect both yourself and your startup adequately.
Next, you have to pick a name for your business and register it. There are several reasons why this is important and here are a few of them:
- Get registered under DBA (Doing Business As)
- Trademark your business name
- Use a business name for marketing and branding purposes
Consider an Office Space
Every business needs an office space, sooner or later. Undoubtedly you’ve already received some advice on how you should work from home as much as possible and save money on office space and equipment.
What no one tells you about is that it’s next to impossible to do everything on your own regarding starting and running a startup business. In other words, you’ll need a team of employees to help you out, and you’ll need an office space so that everyone can work together.
Although your employees can work remotely and you technically don’t need an office, it’s important to build a relationship with your team that will foster trust, commitment, and collaboration.
You simply cannot achieve that environment if everyone is working from their homes. Renting an office might be a strain on your budget, but you can make it work with a bit of planning ahead. That’s why this step should be considered before you start a business.
Get the Equipment Ready
If you decide to hire employees and rent an office space, you’ll also need the necessary equipment to get your startup operational. Equipment is a broad term which should be tackled before you start a business.
What you need depends on the nature of your business, of course. For instance, a tech startup requires computers and other IT equipment. A transportation or delivery business requires vehicles. In other words, you must obtain what you need before you start your business. Otherwise, you’re just missing out on potential opportunities right from the start.
Equipment can strain your budget, which is why you must find ways to save money any way that you can. As an example, if you are starting a transportation business, try to save on car insurance as much as you can by opting for an ideal policy. You can also rent out equipment instead of buying it or look if someone is donating their old equipment.
Take Care of Funding
Funding is the most important factor for startup businesses. Most new entrepreneurs only consider a budget required for starting a business, yet they rarely consider funding required to support your business until it becomes sustainable, i.e. starts to generate revenue and profits.
That said, 29% of startups fail because they ran out of funds. Therefore, consider alternative funding sources if you cannot support it yourself. Here are a few examples:
- Bootstrapping
- Angel Investors
- Venture Capital
- Bank loans
- Government grants
- Crowdfunding
Securing funding should be your top priority even before you start your business. That way, you can avoid financial hardships that follow every startup business today.
Deciding to start a business can be a dream come true for a lot of entrepreneurs. However, becoming a business owner is a serious matter that requires dedication, effort, and a lot of planning ahead. That’s why it’s of the utmost importance to take the necessary steps before you decide to start a business so that everything can be well-prepared for the launch and operations.
