Entrepreneurship is a dream of many people and the freedom and control that comes with running your own business are unparalleled. Breaking away from the daily structure of round the clock office work is an alluring prospect, but do you know that according to a survey conducted by the Institute for Business Value and Oxford Economics, 90% of start-ups fail within the first 5 years.
Starting your own business seems like a scary and arduous task and the workload of the venture could pile up really fast. So rather than spinning in circles and speculating where to start, an MSc in Entrepreneurship can give you a head start.
Also, here is a 10-step guide you can follow to help yourself start your own business.
1. Refine Your Idea:
Thoughts and ideas of starting a business venture seem enchanting but one must have a real understanding of why you are launching your business. It is wise to differentiate if your business prospect is fulfilling a personal need or a marketplace need. The scope of the business satiating a market need is always going to be greater than the personal need.
Whether you want to start from scratch and build your own company or start out with a franchise, these details must be straightened out during the ideation phase. Deduce if there is an existing market for your product or service. If you can’t seem to find any fruitful prospect, it would be better to brainstorm some new ideas.
2. Chalk out a Business Plan:
A business plan is a document that sets out a business’ future objectives and strategies for achieving them. It is essentially a blueprint that would convert our ideas into reality.
It is at this point where one must conduct an extensive market research to identify the clientele and the nature and preferences of the target demographic. It is also recommended to figure out an exit strategy while compiling the plan.
A business plan must contain executive summary, company description, products and services being offered, market analysis, management team and a financial plan.
It’ll help you figure out the key objectives and how your company will overcome potential problems.
3. Find your funding:
Starting a business requires an initial investment that’ll not only help you cover the starting cost but also sustain your business until you start bringing in profits.
It is imperative to conduct a break-even analysis using the formula:
Break-Even point (units) = Fixed Cost ÷ (Sales price per unit – Variable costs per unit).
It’ll help you determine profitability and appropriate pricing of products and services.
After estimating the required amount for starting your business, you must secure funding for the same using options such as:
- Personal savings
- Angel investors
- Venture capital
Bootstrapping is also a great way to ensure that you are spending in the right places and not exhausting your resources by overspending.
4. Determine your legal business structure:
The business structure you choose legally impacts various aspects of your business from your business name, personal liability to how you file your taxes.
Your start-up can be a Private limited company, Limited liability partnership, General partnership, Sole Proprietorship or a one-person company.
It is important to learn about all the legal business structures available and then make the choice as per your requirements and needs. Depending upon the complexity of your start-up, one can also take legal consultation to ensure that you are making the right choice.
5. Register your Business:
Registering your business starts out with picking out a name for your company. It should be easy, reflecting your business values and more importantly available in the domain. It’s vital to ensure that the name is not trademarked or already in use. To avoid future blunders, trademark your company’s name right after registering it. The name chosen must also adhere to the guidelines under Companies Act 2013 and Companies Incorporation Rules 2014.
Once you have chosen the name, you can then incorporate your company under Companies Act 2013. It can be done online via the website of the Ministry of Corporate Affairs (MCA). The company can get registered in seven days.
6. Procure licences and permits
Obtaining all the licenses and Permits and being up to date with the paperwork is the most crucial part of the process. After the business registration process is done, the next step is Tax Registration. All manufacturers, sellers, service providers, exporters, etc. require to get their GST registration.
There are certain licenses and permits required by a business as per the kind of business it is involved in. The licenses are industry-specific or depend upon the scale of business. You’ll need to research what licenses and permits apply to your business and then procure them accordingly.
7. Select your Vendors:
Businesses run efficiently when there are certain systems in place such as HR, Accounting systems and Business phone systems etc. It could get overwhelming to manage it all by yourself especially when you have no experience or knowledge as to how to properly enforce the required systems.
This is where third-party vendors or B2B companies come in. Select the companies and vendors after careful contemplation as these companies will have access to your vital and sensitive business data.
8. Build your team:
The products are built by people, so it’s important to give the same attention to hiring your employees as the products themselves. If you wish to build a team, it’d be important to jot down the positions you want to fill and their respective work requirements. Defining roles and responsibilities, division of labour, how to work together and the appropriate way of offering feedback, all of these questions must be answered here.
If you wish to work alone and outsource work to independent contractors, you must obtain an Independent Contractor Agreement from the appropriate governing body.
9. Get an insurance policy:
A very crucial yet often an overlooked step in setting up a business is to purchase the right insurance policy before the official launch. Incidents such as theft, customer lawsuits, property damage are costly and it’s important to make sure that you are properly protected in such scenarios.
The most common type of Insurance recommended to all is General Liability Insurance. It applies to a wide variety of businesses and a smart policy to have in case your venture deals with in-person interactions with customers, clients or partners. Although it is advisable to conduct a proper research and invest in an Insurance with proper legal consultation and as per your individual requirements.
10. Promote and Advertise:
Advertising is the key to a successful business. If no one knows about your products, how will they buy it? To prevent this from happening it is important to invest your time and money in good marketing strategies.
Social media marketing is a great digital asset to build your following and attract potential customers. It’s good to have a logo and brand image that is being used consistently all across the social media platforms and the official website. Investing in an Official website is also a good move as official websites are a one-stop-shop for all the products and services you offer.
Make a marketing plan that goes beyond the initial launch of the company and consistently works on getting a word out about your business.
Business is all about being prepared to adjust. You can have the best plan in the world but still, things could change, unexpected situations might arise and the only way to stay afloat in that situation is to be willing to adapt and solve the problem quickly. So, follow these steps and chalk out a plan but be prepared to make changes and adjustments as you embark on your journey of entrepreneurship.