10 Keys To Starting a Successful Business
According to findings released by the Bureau of Labor Statistics, it’s estimated that 20% of small companies in the US fail within their first year. Interestingly, by the end of their fifth year of business, approximately 50% have faltered, and after 10 years, only an estimated third of small businesses have survived. The ones who have managed to survive have done so because most of them have followed key steps to success.
Picturing yourself as succeeding and believing you will be successful can put you on the right path, but a positive mindset won’t make you a success on your own. A genuinely successful business needs to be profitable and receive profits.
One of the many misconceptions of people with regard to starting a business is the images that they see on social media. Where “successful” – quotes intended – business people drive luxury cars, drink margaritas by the beach, and have the best time of their life because they are entrepreneurs. The case is the opposite in real life. Entrepreneurs are people who are willing to work extended hours just to keep their business afloat.
According to Luke Lee, CEO of Palaleather, in starting a business, you must ask yourself, “Am I building a business that would create an impact on the people who will patronize, or am I just buying the dream that I saw?”
If you’re a budding entrepreneur, it can be challenging to determine how you will make your business a success. That’s why we have found 10 keys to starting a successful business that we think you should consider when you have decided you want to become a business owner.
1. Research Your Business Idea To Ensure It’s Marketable and Profitable
You need to remember that having an idea is just a seed. You need to make this seed grow, and the way you can do that is by researching your business idea in its entirety. When you start researching your business idea, you are trying to determine if it is profitable and marketable.
According to Teo Vanyo, CEO of Stealth Agents, it’s important for you know to how and where to market your product/service.
There are a few research questions you need to answer when determining if your business idea could succeed. If you can answer the below questions, you are a step closer to having a successful business. Yet, remember that to answer these questions, you will need to use market research methods.
For example, the best ways to research your idea and determine if your business could be successful is by completing surveys, conducting interviews, and analyzing similar businesses in the market by creating comparison charts. make sure you know how and where to market your product/service
- Does your business have a competitive advantage over other similar businesses?
- Is your business’s service or product solving a problem or providing customer benefit?
- Who is your intended audience, and how large is your intended audience?
- Is there a percentage of your audience that other companies are already servicing?
- Are there any businesses that offer similar services or products, and how much do they charge?
- What are the demographics of your business’s intended audience? For example, where do they live, what is the unemployment rate, and what is their income level?
Your business’s location is key to successful operations and overall growth. The location of a business positions it not only to attract a customer base but also to attract the right sort of talent to make the business a success.
OpenPhone just released a ranking of America’s 25 Fastest-Growing Cities for Small Businesses in which they considered factors like business survival rate, number of new business applications, and reported startup funding in each city. Apex, NC came out on top out of 1,000 US cities, while Miami, FL had one of the highest reported startup funding amounts at over $333 million last year. No matter what the business venture may be, this top 25 list is worth considering where to start!
2. Create Your Business Plan
After you have researched your business’s likelihood of success, you can then begin creating a business plan. Yet what is a business plan, and why do you need one? You might not realize it but, you’re going to need a business plan for multiple reasons.
A detailed and thoroughly written business plan will help you define your business’s objectives, identify your goals, and establish your budget and operational costs. There are a few essential business-related elements that your business plan is going to need to include to keep you on the path to success.
First, make sure you have a clear idea of what your business will offer. What products or services will you provide? Who is your target market? What need does your business fill?
Once you have a good understanding of your concept, you can start to develop a business plan. This should include an overview of your business goals, a marketing strategy, and a financial plan.
According to Hanah Alexander from TodayTesting.com, you should also start to build a team of trusted advisors who can help you with various aspects of starting and running your business.
Finally, be prepared to work hard and stay focused on your goals—starting a small business is not for the faint of heart!
Here’s a detailed guide on everything that your business plan should include:
- Your mission: In your business plan, your mission will detail the services or products you plan on providing. This section also details your unique selling proposition and identifies to whom you will sell your products or services.
- Your vision: Perhaps the most important part of your business plan is to establish and detail your vision. This section will explain the type of business you are creating, what your future plans are, and how you want your business to grow.
- Marketing and advertising: Your business can’t be successful if no one knows about it. That’s why marketing and advertising are crucial. When most people start a business, they start with hamster wheel marketing. Hamster wheel marketing is Facebook Ads, cold calls, and direct mail. These are great for generating income in the short term. However, most new businesses never build evergreen content that will generate income in the long term. Evergreen content is things like YouTube videos and SEO. Building this content takes years to develop but, over time, it can create a steady stream of income. According to Shawn Breyer from the The Hive Law, building a presence on these platforms develops credibility for your business as more and more people research the companies that they are considering doing business with.
- Plan the financing: Financing is the essential oxygen for a company’s survival; if it runs out, it is likely to die, even if it has a lot of potential. Successful entrepreneurs make arrangements ahead of time to ensure they will have access to the necessary financing. Potential investors, partners, and lenders are much more willing to support a business when they are provided with detailed plans upfront. – Ilija Sekulov, Digital Marketing Expert at Mailbutler.
- Pricing strategy: You won’t have a business unless you figure out how much you want to charge for your products or services. Yet, you need to remember not to set an unreasonable rate or one that will not earn you a profit. This vital section of your business plan will also detail what you expect your future earnings and expenses to be.
- Your action plan: Your business is not going to be successful if you don’t have an action plan. In this section, you need to set out the steps you will take to achieve your goals and objectives.
3. Establish Your Businesses Tax and Legal Requirements
It’s imperative to learn what your business tax and legal requirements are while you are starting your business. If you leave these tasks until after your business is fully established, you could have a very daunting and expensive task ahead of you.
For example, some of the business and legal tax requirements you need to determine while starting your business include establishing if your business needs to be registered, if you will have to have workers’ compensation insurance, and if you need to charge PST or GST.
Additionally, you also need to consider how the form of business ownership you choose will affect your income tax situation. Certain business ownership modules will cost you more in taxes, which you likely want to avoid.
4. Keep Detailed Records
Ultimately, the reality is that if you don’t keep detailed records, your business isn’t going to be successful. When you keep detailed records, you will know your business’s financial status, which is especially important when you have just begun to start a business. This will allow you to determine what could be a potential problem and allow you to rectify it before it causes irreparable damage.
Additionally, by keeping detailed records, you are also creating a visualization of future projections, which will help you immensely with business planning. These records will also help you pay taxes when your business is fully up and running.
Essentially, you need to have these records to easily analyze your profit and loss statements and study your general ledger. These records will help you understand your business’s cash flow, allowing you to make key decisions regarding all areas of your business.
5. Start Your Business While You Are Employed
Realistically how long can you maintain your standard of living if you are trying to start a business while unemployed? It’s usually always a better idea to try and begin your business while you are still employed because you don’t know how long it will take your business to earn consistent profits.
Additionally, suppose you’re working while trying to start a business. In that case, you will have an easier time securing funds, and you will be able to feed your private earnings into your business. If you earn enough and if your business idea doesn’t require costly start-up capital, you might not even need to take out business loans.
6. Line Up Customers
Why wait until only after you have started your business to receive customers. When you decide to start your business, you should immediately begin sourcing people you believe would be interested in your products or services.
Yet, how do you begin lining up customers? Well, you can start by simply creating social media pages for your business. Since so many people use social media, you are likely to begin receiving consumer interest while you work to fully create your business.
7. Analyze Your Direct Competition
It might not seem believable, but analyzing your direct competition can help you tremendously when you are trying to start a successful business. This is because competition actually creates a space for the best results.
By studying and learning from your competitors, you’re identifying ways that you can make your business better than theirs. This could give you a considerable edge while you start your company and increase your chances of being successful.
8. Have Realistic Business Expectations
It might be hard to do, but you need to try to have realistic business expectations when you’re starting your company, especially if you have a small amount of start-up money. You can do this by setting small goals at first that are easily achievable.
Think of it this way. Suppose you have complicated business expectations that exceed your fund availability. In that case, you will become discouraged, and this will affect your work ethic and could make you decide to give up before you even truly begin. Having realistic expectations and meeting them will inspire you to keep going and allow you to have a much greater chance at creating a successful business.
9. Seek Professional Assistance
Starting a business independently or with a few people can be difficult. Not everyone is equipped with the necessary and vital skills a business needs to have a fighting chance at success. That’s why you shouldn’t be afraid to seek professional help.
For example, you need to consider hiring an accountant, a bookkeeper, a lawyer, and a marketing expert. An accountant can make sure your business remains tax compliant, a bookkeeper will ensure all your company records are kept up to date, a lawyer can help you draw up employment contracts, and a marketing expert can make sure your business starts gaining a positive reputation.
10. Always Be Professional
Starting a business comes with many expected and unexpected challenges. One of the best ways to face these challenges and get through them is by being professional. When you are starting your business, being professional can get you through doors you might have thought previously closed to you.
Additionally, the more professional your business appears, the more likely you are to gain a respectable reputation and retain and obtain new customers. You can prove that your business is professional by having a dedicated work phone, a work email address, business cards, and a business address. Moreover, you can also prove your professionalism by treating everyone who comes into contact with your business with courtesy and kindness.
Should you follow the above key steps, you will have a higher chance of starting a successful business. These steps will help you start your business off on the right foot in a much less stressful manner than you would have if you had not listened to our advice. With the right plans and mindset and a passion for what you want to do, you can achieve any business goals and objectives you set your mind to.
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