With employment opportunities diminishing all over the country, now’s the time for many armchair entrepreneurs to finally consider turning their concepts into realities. While the current economy may not be the easiest climate in which to enter the business world, the most well-educated and diligent businesspeople can find success under any conditions. While there are full libraries full of business books outlining the steps that entrepreneurs should take to prepare for the launch of their venture, these five steps are what we’ve gleaned from this overwhelming body of knowledge and are essential to know before you even begin researching the local market.
1. Clearly define your business
For any business to thrive, it must be clearly differentiated from its competitors by offering a product or service that cannot be purchased elsewhere. For generic products like produce, raw materials, and basic fast food, established corporations will always have an insurmountable advantage over new businesses. The marketing, supply chain, and networking infrastructures that corporations develop over years of experience make them impossible to defeat at their areas of expertise — unless you can significantly innovate in one of these areas. Make sure you can pinpoint the absolutely unique product that your business will be providing before you even think about moving further into your business plan.
2. Commit to your business
Starting a business is a major life decision that can often entail huge personal sacrifices. Before you begin making your concept a reality, make sure you’re ready to fully commit to the undertaking — the business world is extremely competitive, and you will have difficulty succeeding if you’re unable to dedicate yourself completely to the task. Will your personal life allow you enough free time? Do you have the financial stability to weather a long period in which your venture takes in no revenue? Do you have access to a space that will empower you to productively work? Every business entails a certain amount of risk, but you don’t want to set yourself up for disaster if your project fails.
3. Research the Market
Whatever your business concept, the first move you should make towards bringing it to fruition is in-depth market research. You should have already differentiated your concept from competitors, but you will need to know what other firms are operating in related spaces. What regions are overcrowded with similar companies? Where could there be unfilled demand? Are there any marketing channels that are underutilized in your sector? Any of these insights could provide you with the key catalyst towards launching your business.
4. Learn the Rules
Every industry is subject to a complex web of local, state, and federal regulations concerning taxes, employment, safety, and other general guidelines. This is the most laborious aspect of launching your venture, but neglecting can consign your venture to death-by-tax-audit within a year. Also make sure that you develop strategies for how you will deal with each step of regulation: learn about payroll paperwork, how to generate invoice, and how to file your taxes. It’s often worth the investment to consult with a lawyer or accountant who can summarize the regulatory obstacles that you may face.
5. Secure Investment
Unless you’re very wealthy or are launching a completely-online company that sells your own services, your venture will probably require significant start-up costs. Insofar as is possible, you should not bury your personal savings in the founding of your company but instead seek funding and investment from elsewhere. The three major channels for small businesses to secure funding are bank loans, venture capital, and crowdfunding. If you have an extremely exciting or catchy-sounding product you are proposing, crowdfunding may be a viable option. If you think your idea has tremendous growth potential, venture capital will be by far your best bet. Otherwise, your business will start, like most businesses before it, with a trip to the bank.