You, Idea, Target Market, Niche, Biz Plan, BootStrapping, Save $$$, Marketing, Finances, Business Structure, Name, Acctg, Licenses & Permits, Team, Promotion.
Surviving the Pandemic. In 2020, we found ourselves in a whole new way of life – especially in business. The pandemic left many employees with a cut or bleeding in salary, an unclear future, or even completely jobless. The unemployment rates worldwide keep growing & growing. They are now projected to reach the highest level since the Great Depression of 1920s and not return to their pre-pandemic levels until 2022 at the earliest – according to the Organization for Economic Cooperation & Development. So looking for a new job or business is very tough these days. And it looks like 2021 isn’t changing much any time soon either.
“When life gives you lemons, make lemonade!” So if you’ve been sitting at your job for years, dreaming about starting your own small business, but didn’t have enough courage for it — now is the time! So, while some people are still stuck in lockdown, without a job or opportunity to travel, starting a small business in 2021 to be able to cater to those people, might be a great opportunity – if you plan it out well.
Personality. If you’ve ever listened to millionaires & successful businessmen, you probably know that you don’t have to have an impressive college degree or $millions in the bank, but rather the drive to succeed, commitment to work hard, and a Gr8 business idea that will bring some value to your Clients, whether it’ll be a product or a service.
12 Steps. So if you’re asking yourself how to start a small business to ensure your success, look no further. Here are 12 steps you need to follow in order to start a business successfully. Don’t rush the process and you’ll be well on your way to small business success.
1. It all Starts with You !!!
Before you do anything, ask yourself this Q: “Why do you want to start a business? Once you have the answer, you’ll know what kind of business you’ll start. For example, if you need extra $$$ consider a side project. Or if you want more flexibility, it’s time to leave that 9-to-5 job for good. Before actually starting your own business, go and watch the 2021 small business trends to get some inspiration & ideas. Once you have the reason down, ask yourself even more questions so you can determine which business type to start and if you’ll succeed.
- What are your Skills?
- What are the best Tools needed for a small Biz you have and know how to use, or willing to learn?
- What are you passionate about and how will it help?
- What is your area of expertise?
- How much can you afford to spend?
- How much capital will you need?
- What kind of lifestyle do you want to live during the startup?
- Are you sure you’re ready to be an Entrepreneur?
The answers will help you create a foundation going forward so it’s better, to be realistic now.
2. Choose your Business Idea
Creating a business idea means being realistic before anything else. You can have a look at 101 best business ideas for 2021 online or Wiz4.biz Startup Ideas, but you need to evaluate every one of them individually & realistically. If that’s gonna be your business — Will it succeed? What’s the likelihood of its success? Think about this before moving forward. Are you wondering how you can realistically answer this? Ask yourself this:
- Is there a need for your “new” products/services?
- Who needs them? Will they buy?
- Who else offers this similar product/service?
- Right now, what is the competition like? Can you beat them?
- Where does your business fit into the market? Niche? Growing
Remember that a small business will only succeed if it solves a problem, fulfills a need, or offers something that the market wants. So be true to yourself and try to assess & validate every business idea you are considering with reality.
3. Finding your Target Market
To determine who is your best Target Market consists of, start by answering three basic questions:
- What problem does your product or service solve? Does it help lessen crying teething babies? Does it make men & women feel more comfortable when they meet? Does it help companies get more publicity?
- Who is most likely to have this problem? In what situations do they use it? This is where you start breaking down who you should be focusing on. Is it Individuals? Businesses? Families?
- Are there different groups with different needs? You may have more than one Target Market (or market segment), based on how they use a product or service. For example, a bike shop may help families with young children choose a safe bike for their 5-year-old, while a 30-something athlete may want advice in choosing a professional racing bike.
Get a more specific about what pain points your product or service addresses and then who typically feels that pain.
4. Zeroing in on your Target Market
Once you are clear about who is most likely to need or want your product or service, it’s time to get even more specific about this group, or groups, of people. There are several different ways to define your target market, based on different characteristics. You should decide which approach comes closest to exactly describing your ideal customer:
- Consumer or Business – Start by clarifying – if you have a B2B or a B2C offering.
- Geographic – Local brick-and-mortar stores may find that their most likely customers are within a two-mile radius of their store, or within a particular zip code. This target market is defined geographically, based on where they live or work or vacation or do business.
- Demographic – Describing your best customer demographically means that you define your target market in terms of their gender, age, income level, education level, marital status, or other aspect of their life.
- Psycho-graphic – Sometimes customers don’t fit into a particular group based on outward characteristics, but more based on internal attitudes and values. These are psychographic characteristics.
- Generation – Many companies today define their target market based on which generation they were born in, such as baby boomers or Gen Y.
- Cohort – Other companies find that their target market is better defined by looking at cohorts, or groups of people who had similar experiences during childhood, such as being raised by a single mom or attending boarding school.
- Life-Stage – Other target markets are more alike because of the stage of life they are in, whether it’s post-college, retirement, newly married, newly divorced, or parenting young children, for example.
- Behavioral – Another approach is simply based on frequency of use, or behavior, which could be a good choice for nail salons, car washes, or vacation rentals, for example.
Armed with a clear understanding of your Target Market/s, you can now begin to craft marketing messages that appeal to that particular group’s pain points and preferences.
5. What is a Niche Market?
A niche market is a subset of a larger Target Market with its own particular needs or preferences, which is probably quite different from the whole larger market.
a) What makes a Niche?
Nearly every market can be further refined, or divided, by the particular needs & preferences of its buyers. Some of the most common ways to define a niche are based on:
- Price (high, moderate, discount)
- Demographic base (gender, age, income level, education level)
- Level of quality (premium, high, moderate, low, cheap)
- Psycho-graphics (values, interests, attitudes)
- Geographic (the buyer’s precise location)
b) Marketing to a Niche
Marketing to a niche is much easier than appealing to a broad market, since a niche has much more in common – in terms of needs, wants, or preferences. Understanding the different needs of each niche makes it possible to communicate directly to them in your marketing – which gives you a greater possibility of attracting a buyer’s attention and winning their business – by making it clear that your product is for them specifically.
6. Developing a Business Plan
A business plan is a road map that guides your business from startup to growth to unicorn. It is key for every new business to develop. It’s a description of how your business will evolve from start thru growth. And yes, there are numerous types of business plans to choose from. Feel free to use our free business plan template to start with or search for other templates. If you don’t want to do a long Biz Plan, I can help you write an Executive Summary of a Biz Plan that contains all the significant elements. Contact Peter@Wiz4.biz We could do a full Business Plan later – as the biz evolves and you have a clearer idea of the parameters.
Why?. If you require financial support from an investor or a financial institution then a traditional Biz plan is crucial. This is typically long, thorough, and has sections laid out so Investors (Angel & VC) & banks can quickly review to validate your proposal. However, if you don’t believe you need a full Biz Plan, then a simple one-page Exec Sumry is enough to lay out how you will achieve success. It is best to have a Sumry or Plan written down when starting a small business. Review it once a month as you grow and modify it accordingly.
- Title page. (naming) Do the Research before settling on a name. Make sure it’s not already being used. Pick a name that’s short – and ideally – associated with your business (ie, Best Buy, Dollar Tree, Door Dash, eBuy, FaceBook, Lyft, Messenger, NetFlix, Shopify, etc.
- Executive Summary. This is the Summary of your business plan and it’s a high-level summary (for Executives of Angel Investors or VCs) of what the entire plan includes, such as the company description, the problem the business is solving, the solution, + why & hows. This gives the reader a quick overview what you’re planning to make a quick decision. Contact Peter@Wiz4.biz for Exec Sumry.
- Business description. Answer the following in this section: What business are you looking to start? What’s the industry look like now and what will it look like in the future?
- Business tools. What are the best small business tools that you need to learn or utilize in order to make the most out of your business? Research to find out or Contact Peter@Wiz4.biz
- Market strategies. Explain what your Target Market is, and how you plan to sell to that market?
- Competitive analysis. Include the strengths & weaknesses of your competitors, and how you’ll beat them. Do a SWOT analysis.
- Design & development plan. Describe your product or service and how you plan to develop it. Then outline the budget for that product or service.
- Business operations & Management plan. On a daily basis, establish how the business will function. Are you gonna be a solo-preneur, have a co-founder or planning on hiring people in the near future? If so, you need to start thinking about Management plan in advance.
- Finance factors. Where will the $$$ come from? When & how? What projections can you create and what should you take into consideration? Draw up a Budget. Review it monthly to update.
A business plan develops, grows, & changes as your business grows. So have your monthly meetings – so you are always updating it to match your current situation.
7. First consider BootStrapping
In case you don’t know, BootStrapping is a term used in business to refer to the process of using only existing resources, such as personal savings, personal computing equipment & garage space, to start / grow a company. This approach is in contrast to bringing on investors to provide capital, or taking on debt to fund a business’ expansion. It’s about stretching what you’ve got – whatever that is – to get the job done.
a) History of BootStrapping
The term “BootStrapping” originated with a phrase in use in the 18th and 19th century: “to pull oneself up by one’s bootstraps.” Back then, it referred to an impossible task. Today it refers more to the challenge of making something out of nothing. A BootStrapped company is one that has been started and expanded only through the entrepreneur’s personal resources and revenue generated by the company.
The advantages of bootstrapping a company are:
- The owner(s) maintains complete control of the company, without outside influences from investors, for example.
- Relying on existing resources, without loans, reduces the need to outlay cash to pay back a loan.
- Carefully managing money from the outset creates smart spending habits.
On the other hand, there are downsides to declining outside cash infusions:
- The business’ growth may be limited or hampered if demand exceeds the company’s ability to procure inventory or raw materials to sell.
- The entrepreneur assumes nearly all the financial risk by not sharing the burden with outside investors, who put up cash to support the company’s growth.
8. How to save $$$ when Starting
Different aspects of a company can be bootstrapped, or managed with an eye toward making the most of what a company has. On the financial side, that means keeping overhead low and avoiding paying too much for anything, or paying sooner than is necessary. Here are some possible bootstrapping techniques to use:
- Avoid renting work space until you absolutely need to, such as when you start hiring employees. Then, look into low-cost co-working space first, to keep lease payments low.
- Don’t splurge on expensive office furniture and equipment. Buy used or, if it makes sense, lease to conserve cash.
- Barter with other companies to get what you need, whether it’s products or services. Conserve CA$H !!!
- If suppliers offer a discount for early payment of their invoices, pay those first.
- Negotiate with suppliers to get more time to pay. Many offer 30 days with no interest, so see if you can get 45 or 60.
- Factoring is expensive, so don’t use it unless you need to, but if you get stuck, you can sell your receivables from customers to outside companies that will immediately pay you 75-90% of the face value of an Invoice, with a service fee of around 2-5%.
9. How to save $$$ on Marketing
“Bootstrapping” is more commonly used in reference to marketing tactics, where creativity can trump big cash outlays. Some effective, low-cost techniques include:
- Offer prospects and customers free sample/s of your products or free short service
- Set up a Rewards program to incentivize customers to shop with you more often.
- Schedule special events, bringing in designers or influencers or celebrities– depending on your products – to give prospects & customers a reason to come in and see your products.
- Build an Email list of Customers & Prospects you can stay in touch with on a regular basis – weekly or monthly, but don’t overdue it.
- Ask satisfied customers for testimonials to use in future marketing materials.
- Creating a Blog using WordPress, which is free, to share company & product or service news.
- Comment on others’ similar Blogs.
- Set up Social Media accounts on platforms your customers use.
- Register for a free account on HelpaReporter.com to spot free publicity opportunities.
- Go to industry Trade shows as an attendee, not exhibitor, and network with prospects without paying for a pricey booth.
- Partner with complementary or neighboring businesses to co-promote to your Email lists.
10. Planning the Finances needed
When starting a small business, you’ll probably need an initial investment to cover ongoing expenses – long before you turn a profit. Consider the startup costs, like licenses & permits, insurance, trade-marking, and so on. And add to that the money you will need to keep your business running for a year, such as rent, utilities, production, etc. Start with family & friends, then look below for some other sources.
- Small business loans & Small business grants
- Female entrepreneurs can look for small business grants especially for women
- Angel investors
- other Financing
Don’t forget, that getting the Finances right is not only about bringing the money in but also about optimizing the expenses and reducing your operational costs. Look into Lean Startup methodology. Determine which a combination of the options above will work best for you. The goal is to review the options and create a Financial plan & Budget, then BootStrap or get the capital needed to get your business up & running – till you make a profit & beyond.
11. Which Business Structure is Right For You
There are a few options of what your small business could be: a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. Whichever business entity you choose has a direct impact on various factors, such as your business name, liability, how you file your taxes, etc. It is fine if you choose an initial business structure but then re-evaluate and change your structure. This is common as your business grows and requires change. It might be worth investing in a consultation with an Attorney & CPA – so you can be sure you are choosing the right structure for your business.
12. Choose & Register your Business Name
We briefly hinted on this, but the name of your business is a key component in every single aspect of your business. That’s why it has to be great. Consider all implications as you examine what your options are and choose your business name.
Once you choose a business name, you need to check if it is trademarked or is currently in use. Then, if all is okay, you need to register it. If you are a sole proprietor, then you must register the business name with the state or county clerk. Corporations, LLCs, or limited partnerships usually register the business name when the formation paperwork is filed.
Be sure to register your domain name once you choose a business name.
13. Get all the Licenses & Permits Required
When starting a small business, paperwork is a necessary evil. There are many kinds of small business licenses & permits which may apply to your situation. This depends on the business type you’re starting and where you’re located. Research what licenses & permits will apply to your business.
14. Pick an Accounting System
There is no doubt that small businesses run effectively when systems are in place, a key component is an Accounting system. An Accounting system is vital in creating & managing your budget, setting rates & prices, conducting business, & filing taxes. You can either get an Accounting system yourself (but who will run it), or hire an accountant, but dealing with employees’ payroll & tracking their working hours might be a lot of work, especially if you try doing it the “old school” way.
15. Prepare your Team
When you are planning to hire employees, you need to list which positions are needed to fill and their subsequent responsibilities – a Job Description. If employees don’t need to be hired, and instead you need out-sourced work, then work with an Attorney to create an Independent Contractor agreement. But even when hiring staff from out-sourcing or out-staffing agencies, you need to be ready to deal with managing their job schedules & planning shifts. The following tips can help you find & keep the right employees:
a) State .mission, goals & vision clearly and how their job role will affect the company.
b) During the Hiring process you need to: 1) ask the right questions (research it & have a list) then 2) determine & look for what qualities make a good employee. Once you know this, it’s easier to bring the right people onboard.
c) Establish a strong Company Culture which is key to employee productivity, loyalty, & engagement. You need to respect, engage, & empower employees from day one while also offering amazing incentives (and no, money and promotions aren’t all employees care about).
d) Utilize an all-in-one Mgt mobile app
Choosing a smart and affordable all-in-one mobile app, like Connecteam, will help you save time & money on the operational work and actually focus on growing your business.
e) ConnecTeam makes it easier to:
- automate and digitize your daily operations and paperwork
- manage employees’ time clock
- create schedules and manage shifts in a few clicks
- boost employee communication and engagement
- create a smooth training and onboarding process
- increase your team’s performance with tasks-management, and so much more.
It is intuitive & easy to use software specifically created for small businesses with a free trial & free-for-life plans available. Consider these Factors with ours or other mobile Mgt Apps.
16. now Spread the Word about your new Business
Now that your business is officially up and running, it’s time to bring in customers. You can start by creating a unique Selling proposition that separates you from the competition, Create Marketing plan that promotes your business most effectively. Don’t be shy to promote your own business, until your happy customers will start spreading the word for you — it’s your job!
Bottom Line on Starting your Business
Once you complete the 16 steps above – on starting a small business – you have all your bases covered – so you can now focus on the big picture & succeed. But be patient, success doesn’t happen overnight. Consistently work on your business and you will see success.