Starting a business is a dream come true for many people. The promise of making your way in the world, being accountable only to yourself, and setting your own hours is tempting, but there’s a lot of hard work that needs to happen before you can turn your good idea into a career.
On the other hand, many people let their fear of the unknown stand between them and getting started. When it feels like you have a lot to do, but you don’t quite know where to begin, it’s easy to let even a solid business idea become a “someday when I have the time” pipe dream. The secret to getting things done, however, is to realize that starting is the hardest part. Once you figure out what your goals are and start breaking them down into actionable items, the big project of getting your dream off the ground will start to look a lot easier.
To help you take action toward starting your business, here are the five things you can do right now:
1. Research Your Business Idea
The first thing to do with your idea is to see what it looks like in the real world. Look across the competitive landscape so you can hone your idea now, instead of wasting six months only to realize that you need to make a major pivot or stand to lose your investment.
First, get the basics out of the way. Search online about your business idea in as many different ways as you can, and see what’s out there in your sector. Having many competitors isn’t necessarily a bad thing, as long as your twist on the industry is unique. That being said, since all you’ve done so far is use Google to do a bit of research, now is a good time to ask yourself the hard questions:
- Is there a need for the products or services I want to offer?
- What is my unique sales proposition, and how will it help me stand out from my competitors?
- What pain points am I addressing that are not served by the current market?
Now, while we’ve done a lot of research into what your competitor businesses think customers need, the next step is to find out what your prospective customers believe that they need. This market research is key to sharpening your idea into something that will actually stand out. You need to make sure that you’re fulfilling an actual need, and the only way to find out if that’s true is to talk to actual customers. The answers you’re after aren’t what most people say-;it’s the answers that surprise you that are often the key to a unique idea that turns heads.
2. Pick a Name
This next step can cause a lot of would-be entrepreneurs to bang their heads against the wall. What’s in a name? A good name is simple, memorable, easy to pronounce and spell, and reminds customers and prospects of your business idea.
The first thing to do is run down the U.S. Small Business Administration’s checklist for how to name your business. It’s especially important to check for trademarks with the USPTO.
Beyond registration, you’ll also need to look into how your name will play online. Is there a workable URL available? A Twitter handle? Try searching it on Facebook to see if any other businesses come up. The fun thing about URLs is that they’re always adding new domain endings, which opens the door for some pretty great puns.
Naming is difficult because it’s ultimately a very small part of your business, yet it’s also the first point of contact that people will have with your brand. Before they do any other research about you, they have to type your name into the search bar or see it come up in search results or some other form of content. Come up with several possibilities, scoring them based on simplicity, fit and Web real estate availability to make sure that you choose the best one for you.
3. File the Paperwork
The biggest barrier between you and your dream business isn’t as big as it may seem. While completing paperwork is certainly annoying, it takes a lot less time than you would think. Jeff Haden’s neighbor had been telling him for months about his great idea for a new business, but he had never managed to get it off the ground until Jeff bet him that they could get everything set up in only a few hours.
So what do you need to do to turn your idea into a reality, at least on paper? It’s going to vary depending on what you’re actually doing, but there a few common steps that will remain the same no matter what business you’re in. First of all, you have to get an EIN, which takes only a few minutes on the IRS’ website. Other than that, the basics are pretty simple: Do you need a business license? A certificate of resale?
Once you have the basics down, you can look into other, more complex topics. Zoning and other permits are complicated things that vary widely based on where you plan to be located. Don’t worry, you don’t need to go on a deep dive to figure out what you need. You should be able to answer any questions you have with a phone call to your locality.
Finally, it’s probably a good idea to open a business bank account. There are a lot of good reasons to have one, and once you’ve filed for an EIN and other licenses, getting one is a no-brainer.
Spending a bit of time planning now will save you lot of headaches down the road. Steps like writing a business plan may seem like a lot of work now, but it will pay off when your business is up and running. There are a lot of resources out there for how to write a business plan, what to look at, and how to create a solid financial plan.
When you’re making your business plan, make sure that you take yourself into account. Be honest with yourself, how much do you need to live? Too many businesses are sunk because of an unforeseen emergency when there’s not enough room in the budget to deal with it.
5. Determine Avenues for Funding
The final step is turning all of your plans into actions, which means you need to start thinking about how you’re going to get the funding you need to get things done. There are a few different avenues for funding available, and what works will depend upon what your idea actually is. You can go to VC investors, try crowdfunding, or attempt to bootstrap it on your own.
VC investors are useful because you become attached to someone who is in the business of making startups into profitable businesses. An experienced venture capitalist or angel investor will be able to offer mentorship, provide an outside perspective in your decision-making, and (most importantly) give you the capital you need to put a great team together and crank out a quality product. On the other hand, VC funding doesn’t grow on trees-;so be prepared to pitch a lot and not take no for an answer.
With crowdfunding, the barriers of entry are lower. If you can create a compelling pitch and a great product video, you have an opportunity to go viral and score big. It also lets you validate your idea with money: you will know your idea is persuasive because people are willing to pay for it. On the flip side, you don’t get a lot of guidance, and it doesn’t take a lot of searching to find examples of failed crowdfunding businesses.
Finally, there’s the option to fund it yourself and bootstrap your startup. It’s risky because you’ll need to go all-in. If your idea works, you have something tangible to show VC funders or other investors. If it doesn’t, you need to make sure that you’ve made an exit strategy. Make sure that you’re honest about how much it costs to take care of yourself if things don’t work out as you’d hoped.
What You Can Do Right Now
Creating a new business is exciting, but the road to success involves many different steps. At the same time, you can actually take care of almost everything you need-;from a paperwork perspective, at least-;in only a few hours. If you take care of your research, have a solid checklist for your paperwork, and get organized about making a business plan, you can get your idea off the ground in no time.
- Research your potential competitors and see where you fit in.
- Pick a name that is memorable, easy to spell, and has a good Web presence.
- Do market research to understand how you need to adjust your plan.
- Have a solid checklist for the paperwork you need to follow.
- Get to work on a business plan that includes you.
- Consider your options for funding: VC, crowdfunding, or bootstrapping.
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