The First Steps of Starting a BusinessAugust 26, 2016
Many 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 uncertain times, 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. In addition, the explosion of the internet has made starting a business easier than ever. The barrier for entry has never been lower. If starting a business at your age is feasible, and you have the drive to pursue a great idea and be your own boss, nothing can stop you. Follow the steps below to learn how to begin the process of starting your own business.
Updated June 03, 2020
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? Don’t be afraid to iterate on another idea. The important thing is being able to improve on it. The key to consistently coming up with good ideas is to not worry about them failing. If a good idea is one in a thousand, you’ll have to go through each of the ideas to reach it. When you arrive at an idea you like, take it to your friends and family. Don’t be afraid of the feedback. It will only help you make your idea stronger. If your idea doesn’t stand up to scrutiny, it’s back to the drawing board. There’s no shame in the process of improving your ideas because at the end of it, you will have something that will put you on the road to success.
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 comprises many topics including your basic concept, funding, mission, values, target market, competitor analyses, strategy, and financial projections. Experts claim that a good business plan is key to not only get the business running, but also to plan for the future. Thus it is doubly important that your business plan is effective.
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 your student loans in order to get a lower interest rate. A good way to start is checking out the ELFI student loan refinancing calculator.* There are a number of benefits of refinancing student loans that can make starting your business easier. For additional ideas on how to save money, check out this article.
It can be difficult to drive a profit in the early days of your business. 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. A side hustle can fill your funding gap. 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.
These three steps are not the only elements in creating a business, but they are some of the hardest and most important. Giving them proper attention ensures that your business has the best chances to succeed. 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.
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