How To Start A Business
There are various reasons why people start businesses. Before we see how one could start a business, let’s look at these reasons.
- Passion
- Survival
- Solving problems
Passion
Some people just have a passion for something and as a result, they decided to go the higher step in building a brand out of their passion. While they are solving a problem, they aren’t intentional about solving problems, they are only intentional about satisfying their passion. The day their passion dies off, the business begins to go down. So, we can say that passion is not enough to start and grow a business.
Survival
A lot of people started a business or are planning to start a business simply because they want to survive. They either need passive income or they want to be their own boss, not because of anything other than a means of survival and footing bills. In fact, a larger percentage of us are in this category especially with respect to the fact that our country (Nigeria) is the graveyard of ideas, dreams, startups and so on.
The reason we have a majority of people simply buying and selling is that all we want to do is meet needs. We don’t even practice what we studied in the universities because we couldn’t find good jobs that can sustain us. While survival can be the reason to build a business, you may end up building a business that will not outlive you.
Of course, not everyone will build a business that outlives them and it doesn’t even make you less successful but starting a business just to survive will limit the energy you put in it, it will shorten the possible length of your imaginations and make you settle for less.
Solving problems
Some people start businesses simply because they saw a problem and decided to solve that problem. People in this category believe that they can survive by solving people’s problems. While survival isn’t the motive or mere passion, they are all included. Their major drive, however, is to solve problems. Businesses like this, when planned, executed and managed well can outlive the founder. The necessity of such business is tied to the problem it is meant to solve and not just about paying bills and satisfaction.
Businesses will only last because they are meeting needs.
The life span of a business is always dependent on the willingness of investors to keep investing and investors will only invest in a business that its promises are obvious. In most cases, at least, for now, you are your own investor. Imagine you are just a third party looking for where to invest money, will you be willing to invest in your business idea? You see, we will never see the fault in our ideas when we are looking at it from a biased point of view. You need to stand out from your ideas and look at it as a third party to be sure if it is something you would be willing to invest in.
Here are three quick takeaway before we continue
- For passion, a business may last as long as passion the lasts.
- For survival, a business may last as long as the owner.
- For solving problems, businesses may last as long as the problem.
Regardless of why you are starting your business, here is a guide on how you can start your business.
1. Define your business
Write down what your business idea is about. Determine if your business is serving a personal purpose or meeting a market need. If your business is serving a personal need, chances are that it will not be of so much value to the market.
- Why do you want to do this business?
- If you had all the money you need, would you still want to do this business?
Defining your business gives you a brief of what you are about doing and this is the stage where you refine your idea.
2. Market research
You have defined what you want to do, now it is time to make a research and see what opportunities your business have, the purpose it can serve, things you can improve on and things you can offer. Research also gives you clue on how to become competitive and areas to focus. Here are things you must consider when making your research
- Demand – Is your niche high in demand?
- Audience – Who are your audience?
- Market size – What is the size of your market? What are the chances?
- Location – Where are your customers? Local or international?
- Market Saturation – Are there many similar businesses in the market?
- Scalability – Can the business be expanded or upgraded?
- Pricing – How can my price be better than others?
Few ways you can make your research.
You can connect directly with potential customers and ask questions about what they would like, the pricing they can be comfortable with or the improvement they would like to see. You can also ask them what their favourite products are so that you can study that product to see why the majority loves it. While you may not go to the market asking questions from one person to another, you can use surveys, reviews or questionnaires.
You can also make your research by engaging your competitors directly. You don’t have to do this by asking them questions. You can decide to try out their own services or products, you can pay a visit to the business organisation just to observe how things are being run, there could be other ways. Remember, everyone is loyal to a brand, to get a new brand into their hands, got must be willing to build something that is worth leaving the other brand for.
3. Write a Business Plan
Starting a business without a business plan will cause you a lot of setbacks. If all you want to be is a freelancer or someone who sell wigs online, then you may not be running a business. If you truly want to start a business, you need to write your business plan. Your business plan can contain your business values, customers, assets and financial details. You can find free business model templates that you can use. Your business model should have these components
- Major partnership – Who or what business would you be partnering with? You don’t have to list business names but you can list the kind of businesses you should partner with and decide the brands later. This can include suppliers, distributors, agents, subcontractors and so on. For example, if I want to be designing and selling custom clothes, I can decide who should be supplying the fabrics, who should be making my designs, who should be making the clothes, who should be distributing it and so on.
- Major Activities – What and what would your business be doing every day? How do you intend offering your solutions? List your activities here.
- Major Resources – What are those things you need to offer value to customers? It could be capital, assets, properties, staff and so on.
- Value proposition – What values are you bringing to the market? This should be unique, compelling and very precise.
- Customer Relationship – How do you want to relate with and reach customers? How can customers reach and interact with your business? Also, list the channels through which you can reach your customers.
- Market segment – Who are your target?
- Revenue – Clearly write down how your business will be making money. Whether by subscription or direct sales, it should be clearly written. Remember that there can be more than one revenue.
4. Determine your capital
It is not enough to have a wonderful business idea. Without capital, it is not feasible. You mustn’t do everything at once but you need capital even if you are starting small. There are various ways you can fund your business, you need to choose carefully. Some of the ways to start up includes
- Bootstrapping – Personal savings or family and friend’s support
- Investors funding
- Crowdfunding
- Grants
- Loan
5. choose a business name
When choosing a business name, don’t just choose a name because you like it, it doesn’t even have to be your name because your business isn’t about you. When you look at major brands today, the names weren’t necessarily linked to the name of the founder or CEO. Google, Amazon, Apple, Tesla and so on all never had its names from the name of its owners.
When choosing a business name, you need to put the following into consideration.
- Name Availability
- Choose a unique name
- Be Creative
- Be Simple
- Don’t copy or modify a competitors business name
- Use a scalable name.
- Don’t Be Afraid to Change the Business name if you didn’t get it correctly.
Read more on how to name a business.
6. Open Business Accounts and Channels
Every business needs a business bank account to enable them to perform advanced business tasks and also access business advantages available to business account holders. Aside from opening a business bank account, you would also want to create business pages on social media through which you can reach customers, offer service support and run promotions.
7. Build a team
When building a business, one of the most important thing you must not neglect is to build a team. Building a team isn’t just about hiring employees, it is about building a team with a “team mindset” and making them feel that they are a part of the business. Here are things to consider when building a team
- Learn and appreciate the strength of each individual.
- Communicate and teach your business vision, mission and values.
- Clearly define roles and allow them to play their roles.
- Engage your team in various training and development exercises.
- Trust your team members and encourage diversity.
Let’s discuss more of this later.
We believe this short note has given you a headstart on how to start a business. Got an opinion or question? Let’s hear from you on the comment section.
