The road to entrepreneurial success can be long, and there are a lot of steps required when it comes to starting your own business. Company development can be greatly rewarding and comes with the added benefit of being your own boss. However, competition can be incredibly tough, and so it is important to ensure that your business is set apart from the rest. There are several factors to consider when setting up your business, from researching and developing your idea, to properly branding and advertising your product on all the appropriate channels. If you are thinking of setting up your own company, here are a few things you should take into consideration.
Developing your idea
Unless you are setting up a franchise of an already successful company, developing a profitable idea is the first step in creating a successful business. Your business idea needs to be something which fulfills one, or multiple, of the current consumer’s needs. This could be something which you have invented and designed from scratch, making it a completely new addition to the market; Or, alternatively, you could develop a pre-existing product or service so that it is better suited to the client’s needs, and will, therefore, be a popular addition to the market.
When trying to come up with a business idea, the first step is to write down every concept you come up with, and work through each individual idea, expanding on them where possible. Whichever idea you find easiest to develop, and which you have the most confidence in, is the model which you should use. Whichever idea you decide on, make sure that it is not similar to any pre-existing patented products or services already available on the market. To start developing your idea, a really helpful tool is to consult members of your target market and ask for their thoughts on your product or service. This is something which could be done in person, through a focus group, or by sending out questionnaires and collating the data from those, to see how well received your idea would be on the market. This will also help you to fix any flaws in your design and develop it further where needed.
Deciding on the type of business
There are lots of different types of business entities to choose from, and you need to decide on which one would be the most appropriate choice for your business. If you are the sole business owner of your company, then the simplest option would be to register as a sole proprietorship; this will mean that you keep all the profits after tax, but it does come with the downside of being the only person liable for any loses, damages, or other problems which may arise from the business. Another option would be to set the company up as a limited liability company (or LLC), which slightly changes the level of accountability you face as the owner of the business.
If you’d like to start up with a business partner, then there are a couple of options available to you, depending on what dynamic you want to work under. If you want your partner to share the same rewards and responsibilities as yourself, then the easiest option would be to set up a general partnership. However, if you want more of a silent partnership, then a limited partnership allows your partner to limit their liability as part of the company. Choosing to be a corporation would limit the liability of each shareholder, though the tax rates for corporations are much higher. Which option you choose can be dependent on your industry, as some of these options might not be available under certain circumstances. There may be other business entity choices available to you. Therefore it is important that you make sure to fully research what choice would be best for you.
Understanding the Market
You need to understand exactly where it is you fit in the market, as this is important information for creating your business plan, and for pitching to investors. The market is always changing, as are the needs of your consumers, so it is critical to keep on top of your research to make sure it is up to date at all times. A very crucial point to consider is knowing who your competition is. You need to know your competitors almost as well as you know your own business so that you can learn from their strengths and weaknesses, as well as the ways in which they conduct business. Investigate the workings of other businesses as not just a rival business, but also as you would if you were a consumer of theirs, as this the best way to gain a wide scope of insight into the company.
Understanding the market also requires in-depth knowledge of your consumer. Consider who your target customer is, and what characteristics they share: what demographics for they fall under (for example, age, gender, location, occupation, income, etc.) and what variables are they affected by (such as their lifestyle, attitudes, and values). All of these factors will influence their motivations and buying habits as a consumer, and if this information is used correctly, it will give you the edge in creating a product which directly targets the needs of your clientele.
Procuring the necessary funding
Very few people go into business with all of the start-up capital they will need already saved, and if you don’t have the funding for your business already, you will need to pitch your business idea to potential business partners or investors. In order to successfully raise the capital, you will benefit from having a well-constructed business plan written out, to show to your investors as you pitch your idea to them. A good business plan will effectively demonstrate the ins and outs of your business and, most importantly, exactly how your business will be profitable. Some important points to include in your business plan would be: your basic business concept (business structure, product or services which you will offer, and why you believe the business will be successful); your business goals, strategy and forecast profits; the markets which you intend on pursuing (including your target audience, methods of product or service distribution, and what makes you different from your competition); and what exactly you are looking for from your investors.
Most investors will detail exactly how much money they are willing to invest in your business, and what they would like in return for their investment. More often than not, that will be a percentage stake in your business, with limited liability when it comes to any future costs and losses the business may face. It is up to you to set the boundaries of how much input your investors are allowed to have in your business, and you should always make sure that you do not allow anyone to have more of a stake in the company than you are completely comfortable with. It is always a good idea to make sure that you have more than fifty percent ownership of your business, to avoid losing autonomy over the direction of your company.
Alternatively, if you would prefer not to gain the funds you need from investors, then there are other means of gathering funding. New initiatives such as crowdfunding have been set up which enables the general public to donate money to help a business startup. Another method would be to acquire the money through a loan company, such as Bonsai Finance.
Branding and advertising your business
As with most things in business, your branding is another aspect which should, to a certain extent, be client focused. You should brand your business in a way which will most appeal to your customers: consider what motivates your client’s buy habits. For example, a person who is invested in protecting and conserving the environment will respond better to a brand that portrays the same values. Your branding needs to make it clear what your company stands for, what products or services you offer, and obviously, portray the qualities which you want your customers to associate with your company.
There are several factors included in branding your business, such as creating a great logo which is visually representative of your brand. Other aspects include slogans, company colors, and a recognizable face of the company. This could be you, another prominent member of the company, a celebrity or other spokesperson, or a mascot specific to the company.
Your methods of advertising distribution should also be chosen with your clientele in mind. An older generation of clients is more likely to respond to newspaper or television adverts, whereas the younger demographic is most likely to interact with advertising on social media. Make sure to cover as many methods of distribution as you can, focusing on the most relevant outlets. If you are unsure of the best way to market your company, you could employ the help of an advertising company for help.
