How To Set-up Your Own Business (First Steps)
Being your own boss is the 21st-century dream, sadly not many people know how to start a business or get bogged down by too much information.
Perhaps you have considered leaving your nine-to-five job a hundred times this year. You may have thought of a great idea that will disrupt the current market or a new way to cater to the needs of people around you, or you simply want an outlet to do the things you are passionate about (or good at) on a wider scale.
If this is you, then you’ve considered jumping into the entrepreneurial line but are still unsure what needs doing. Here is a comprehensive checklist that teaches you how to start a business, and takes you from thinking to action in no time. Grab your pads…
Step 1: Why do you want to start a business?
Before we jump into the action plans it’s important you understand why starting a business is important to you. The right mindset will set the stage and determine how far you’ll go to start and grow your business. Sadly, a lot of entrepreneurs get this wrong.
They either start a business for the wrong reasons or do it for weak ones. When I ask my friends why they want to start their own business, answers read like this:
*For freedom to do the things I want
*To work at my pace
*I want to answer to myself
It’s rare to hear people say I’m good at this and want to reach more people. As I said it’s possible to have the right ideas for the wrong or weak reasons. When the need to solve problems is the fuel for your want, you will sustain the momentum required to face the hurdles of the coming years.
Step 2: Research and Map your business idea
To succeed at entrepreneurship, offering unique value is a necessity. It’s also important to consider the kind of product you have on offer, the market, offerings of potential and existing competition, and growth in market share. This information requires in-depth research. You might already have some promising ideas you’d love to try.
That’s fine. There are chances you’ll fail at it. That’s fine, too. But your chance of failure is significantly reduced when you have the right information on feasibility, and your ability to carry this through.
This is where idea mapping comes in. Before you share your business idea consider these questions:
What do you find effortless that others complain about?
What does your friends/family say you are good at?
If finance was not a problem, what would you do for free?
How do people introduce you?
With these in mind, you have an idea of what kind of value you can offer with your product or services because it’s easier to build on existing strengths. You could also send out an online questionnaire (see: survey monkey) to get a clue of what people need and how you can best serve them.
It is vital to set realistic goals before you start a business to see the big picture. Your first great idea might fail; even the second, too. But what matters is what you do afterward.
Step 3: Business Plan
A business plan is a blueprint that guides your business from start-up to growth. It highlights your goals and details of how you intend to achieve them. Every business idea needs a plan to become reality. The nature of your business and how you intend to source finance will decide the kind of plan you need.
Traditional business plans will serve those who want funding from financial institutions and investors. It’s more thorough than a one-paged business plan often used by people who do not need external funds.
Whatever your choice of finance, writing a plan is a necessary part of starting, running, and growing your business.
Step 4: Plan Finance
Even though we say creating value is most important, none of this will materialize except we have money to start a business. Making a budget is a good way to assess finance. Your budget should cover estimates of expenses for at least 12 months. Inclusive is the startup costs e.g. legal fee, branding, advert, license and permit, equipment, inventory etc., and other fixed, recurring expenses like rent, utility, employee cost, transport/travel, subscription, dues etc.
Some businesses need heavy startup capital, while others do not. Depending on your budget, there are various ways of sourcing finance. For residents in Nigeria, you can get access to funds from the Bank of Industry (BOI), Tony Elumelu Foundation, or from grants, crowdfunding, and angel investors. For those in a regular nine-to-five job, consider setting aside portions of your salary for a time to get started.
Step 5: Determine the business structure
Your business can be a partnership, sole proprietorship, Limited Liability Company or a corporation. This structure will have an impact on your business name, how you file taxes and your liability, among other factors.
Depending on the complexity of your business, it is wise to use the services of a lawyer for legal advice. Irrespective of your plans today, you can always change your business structure as the company grows, to accommodate change.
Step 6: Register your business
A registered business is a legal entity within the country it’s situated. In Nigeria, you need to register your business (irrespective of its structure) with the CAC. For employers of labor, you’ll also have to register with the FIRS and the IRS of your state of residence. This is where you file monthly and annual returns.
Step 7: Choose your accounting system
I’ve met long-time business owners who spend a lot of money to fix their accounting, sales, or inventory systems. The one thing they all had in common was thinking reaching consumers and making money were more important. It is true every business needs money, but without a working system in place, you will find that problems met in the future are avoidable.
For a small company, you don’t need anything fancy, like QuickBooks, if you can’t afford it yet. Invest your time in a simple spreadsheet to record your income and expenses daily. If you can afford a robust software package now, then choose one that’s simple to use. Bookkeeping is easy—at first. With adequate income and expense records, you already have preliminary documents that any accountant can work with.
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Step 8: Build your team
Unless you’re hashing it out as a solopreneur, choosing the most efficient team will impact greatly on your business. When choosing partners and employees always go for people who understand the company’s vision, are easy to teach, and imbibe team spirit. Make sure to highlight the roles and responsibilities for each vacant position so everyone has an idea of expectations.
If you intend contracting jobs, then now is the time to use the services of a lawyer to draft a contractual agreement. It’s important to not get hasty in making this kind of decision. Start a business with the proper legal documents.
Step 9: Brand and Promote your business
You’ve come this far, well done! We have set the stage for takeoff. A bit of branding and promotion is next. You do this by discovering and advertising your unique selling point (USP) to potential customers. You want to tell them what value this business has to offer and why it’s better than anything the competition has.
A website is also suitable for promoting your company; however, make time to keep it regularly updated. Social media presence is a hallmark of every successful business today. It’s important to leverage existing technology and trends and adapt to changes in the corporate environment.
Among all, create a business logo that is easily identifiable on any of your products. This logo should surface on your website, social media pages and sales items.
Once you’ve gone through the listed you’ll have all your bases covered as you start a business. Remember though to stick to the plan and religiously follow through with it.
Becoming successful is not something that happens immediately, but with the right knowledge, people, funding, market and attitude, you’ll stay on a steady path of growth and eventual success.