Turning a great idea into a profitable business is a long process. Many people have had a great idea or several great ideas, but they have stayed on the drawing board. If you have an idea for a business and want to turn it into reality, you can take some concrete steps to get your business up, running, and successful in no time.
Starting your business will include legal matters, financial matters, purchasing branded merchandise, and marketing. If you want to make your plan an actuality, use these nine steps to start your business and make money.
Refine Your Idea
Even if you already have an idea for a business, it is always important to refine your business concept. In the initial stages, many business ideas are just plans for your company a few years down the road after it is successful.
Focus on working out the basics of your idea, where it will be located, exact products, price structures, vendors, market segment, and suppliers. Try to understand who your target customer will be and answer “Why should they buy from me?” Finally, come up with a catchy name that customers will remember.
Do Market Research
No matter how good an idea is on paper, a business needs to make money by selling things or providing a service. You need to ensure there is a market for your idea before you go any further.
If you want to open a coffee shop on a street with ten existing coffee shops, it might be difficult unless you have an innovation that would siphon customers from the other options. Also, If there is competition in the area, analyze their customer base, products, and business plans to understand what works in the existing market and how you could offer a differentiated product.
If you are going to sell a completely new product, do focus groups to ensure it is something people want and, more importantly, something they will pay for. Learn what price point is best for your products and what demographic will be the primary customer. The more you understand the market you are entering, the better your chances of success.
Write a Detailed Business Plan
A business plan is concrete, actionable plan that you can use to guide your decisions. It helps you plan each step of opening your business, establishes benchmarks for success and expansion, and gives you growth targets as a reference. See this plan as a road map to success, but not one that is unchanging. Revisit and revise your plan with the evolution of your business, and keep it as a dynamic document.
To better understand your funding situation, perform a break-even analysis. This is a process where you figure out how much money you will need to spend to get an even return on invested capital.
To calculate it, subtract your variable costs (VC) from your average price (AP), and then divide your fixed costs (FC) by that number:
FC÷ (AP – VC) = The amount of money you need to break even.
This helps you understand your price point and your profitability potential. Take this and your business plan to any investors or banks if you want a business loan. Even if you are self-funding, understanding your break-even point is critical to balancing risk and reward.
Choose a Legal Structure
You will have to create a legal framework when you open your business. There are several different options, with varying benefits and drawbacks, including:
In the most basic form, you control everything about the business, but it is not separated from your personal finances, and you will be personally liable for everything.
One person has full liability and control, and the other investors have limited control and limited liability.
Limited Liability Partnership:
Everyone in the ownership group has limited liability.
LLC: This makes the company a separate entity from you personally and can protect you in case of loss or bankruptcy.
This gives the owner the most protection and legal separation from the company. There are three kinds of corporations, C, B, and S, with different advantages, drawbacks, and tax codes.
These are usually organizations doing charity or other social service work. They are exempt from taxation but cannot be used as a profit-generating venture.
This unique form gives ownership of the company to the customers and workers. Members join by purchasing shares, and the company is run democratically via board elections voted on by members.
Register Your Business
To operate a business legally, you need to register with the IRS and the state and local authorities. This could be as simple as getting your Federal Tax ID, which allows you to operate. But it could also include other steps, including getting an Employer Identification Number, a registered Doing Business As a name, or a state seller’s permit.
If you are bringing a new product to market. It is important to register any patents you have on new products or manufacturing processes. You also need to trademark your business name, brand, logo, and identification to ensure no competitors steal your style. You may need to pay fees to state or local business registration agencies. Contact a small business lawyer in your area to make sure you properly register your business.
Hire a Team
Once the legal matters are settled, you need to hire a dynamic and hard-working team. Your team will build your product and become the public face of your company. Hiring the right team relies on choosing what type of people you work best with and what people bring the right balance of talent, experience, and skill to your organization.
There is no magic formula for choosing a good team, but take your time and choose wisely. It is a good idea to conduct at least three rounds of interviews to make sure you get to know the person and make sure you will work well with them. Select your team, train them in your system, and give them the gear to get them excited and well equipped for the job, like safety promotional products, and put them to work.
Choose Your Vendors and Partners and Get Insurance
Your business partners are critical. Choose vendors that can get you the right supplies, on time, with clock-like reliability. Pick partners who fit with your company’s brand identity and mission. Get an insurance policy that can adequately cover any issues that may crop up with a physical store, workers, lost shipments, or damaged products.
Before you open your doors, you need to build hype for your new business. Use targeted ads on social media and physical ads in areas frequented by your target demographic, use promotional products as giveaways, provide corporate gifts for clients, and build hype with doorbuster specials on your opening day.
The more buzz you build, the stronger start of your business will have. Give yourself at least 30 to 90 days of marketing lead time before you open your doors to maximize excitement for your new products.
Open for Business
Opening a business is a dream many people have, but it often stays a dream. You can turn your ideas into reality with a few steps and some hard work. There are few things better than seeing your dreams become a reality. With thorough preparation and hard work, you can become your own boss, sell your own products, and make your own money.