The First Steps of Starting a BusinessAugust 26, 2016
Most people go to college with the end goal of landing a job in their field. They may dream of working for a successful business, becoming a teacher in a large school system, or caring for patients in a well-known hospital. These are vastly different careers, but they have one thing in common – they all involve working for someone else. Often, the idea of starting a new business does not occur to college students and young professionals. The notion of being one’s own boss may sound a little far-fetched to students who, due to the recent recession, are aiming for more practical jobs. However, your younger years may be the prime time to start a business. In your early to mid-twenties, you likely have no mortgage, no children, and more free time to dedicate to your blooming business. If starting a business at your age is feasible, and you desire to pursue a great idea and be your own boss, what is stopping you? Follow the steps below to learn how to begin the process of starting your own business:
- Come Up with an Idea
The first step in setting up your own business is to determine how you will generate revenue. Is your business built on products or services? Is your idea unique or will you be entering a highly competitive market? If the idea falls into the latter category, what will be your competitive advantage? Having a solid idea is the first step to building a successful and profitable business.
- Develop a Business Plan
The next step is creating a business plan. A business plan is essentially a plan for your business, and it outlines your goals for the future of your business and how you plan to achieve those goals. It is comprised of many topics including your basic concept, funding, mission, values, target market, competitor analyses, strategy, and financial projections. A strong business plan is crucial for the next major step in the business development process — receiving funding.
- Prepare Yourself Financially
Different businesses have different financial needs, but even the simplest of businesses may be costly to establish. Your business plan will help you assess where you stand financially and figure out an estimate of how much money your business requires. There are two actions you can take to start your business on the right foot — saving money and earning money.
- Saving money is an often-overlooked element of setting your business up for success. Many successful entrepreneurs started from scratch and had to make personal financial sacrifices to keep their business afloat. Creating a budget and cutting back on expenses is an effective way to set more money aside for your business. If you are in the process of repaying education loans, consider refinancing and consolidating in order to get a lower interest rate. For more money-saving tips, check out this post. There are so many creative ways to cut back on spending and allocate more money to your business.
- Earning money for your business can be difficult and time-consuming, depending on the amount of money you need. If you do not have the required amount at first (and most people do not), there are several ways to earn it. You can work part-time, while developing your business, to yield some extra cash. You can ask for financial support from your friends and family or set up a page on a crowdfunding site such as Kickstarter. Another option is getting in touch with investors that may give you financial support in exchange for stock in the company. You can also take out a loan from a bank or government agencies such as The Small Business Administration, which lends money to help entrepreneurs grow their businesses.
Although these three steps are not the only elements in creating a business, they are the hardest and most important. Along with ideas, business plans, financial and legal factors, marketing, and more, starting a business requires risk-taking, passion, and hard work. It is not easy, but it is exciting, dynamic, and often worth the risk.