Starting a new business is one of the most exciting things you’ll ever do in your lifetime. It’s also one of the most stressful. It takes serious commitment as a leader, loads of energy, creativity, an open mind, collaboration, money, patience, and the will to move forward and blaze trails when others around you aren’t as hyped about your cause.
Still, with every hill you must climb, there are tremendous rewards if you stay consistent and persevere. The many weeks, months and years can pay off exponentially if you establish the right foundation, get organized, pursue innovation and surround yourself with other hardworking and creative people. With this in mind, there are several key steps that every entrepreneur should never miss when starting a new business. Let’s look at 12 of these right now.
Write a Clear Business Plan
This may sound like a no-brainer when it comes to startup, something that comes standard with new business ventures. But you’d be surprised how many entrepreneurs don’t map out their plan that well. If you’re getting a business loan from a bank or credit union, this is a requirement. If you’re funding it yourself or with private money, you may be tempted to forgo this step and plow ahead with most of it in your mind. Unfortunately, this sets you up to take a dive.
You need a concise and clear plan mapped out in detail and in the most straightforward and simple terms possible. It should include exactly what you plan to do or offer, how much it costs to run, which includes all expenses and employment costs for several months. It should contain estimates for initial returns, an explanation of your target customer(s), a plan for keeping it funded and keeping you paid during the time it takes to become profitable, and any other information needed to operate with a road map instead of guesswork and memory. After all, it often isn’t just you, you’ll have partners and employees that need clear instruction and good leadership. A solid business plan will set the right tone for the rest of the process.
Know Your Target Audience
This is a big one. It’s easy to simply shrug your shoulders and answer…”Well, everyone is my audience.” While this is occasionally true and, at least in the general sense, remotely accurate, it isn’t helpful or responsible. Out of the endless stream of potential customers, every business has a target audience and an ideal customer. Your specific products and services are built for certain people to take advantage of. Individuals have needs and desires and you plan to meet those needs and satisfy some of those desires.
Do your research. Find out who is most likely to want what you offer, why they should choose you over someone else, and how you plan on connecting meaningfully with them. It isn’t enough to have a great product. If people don’t understand it, or can’t relate to you and the way you communicate your service, it won’t matter. Take the time to understand your audience, get to know them, and partner with people who understand consumer needs and habits, and those experienced in building relationships between businesses and their customers.
Most of us wish we lived in a world where every person possessed enough character that we never had to worry about written agreements, that all we had to do was shake hands. But this simply isn’t so. And given the complexity of many of our businesses and modern technologies, it is imperative that as business owners; we draft detailed contracts for our clients, partners and contractors. This ensures clear expectations for all parties and protects you and the other parties involved, both professionally and legally.
What do we mean by this? Simply, don’t hire too soon or too late, and be deliberate about who you hire for your team. Many new business owners rush to hire a full-time employee when all they need is part-time help. This costs them money and creates an unhealthy environment if there simply isn’t enough work for your new hire.
Others wait too long, those who can justify hiring full time or hiring more people and desperately need it, but drag their feet in order to squeeze a bit more profit out, a bit more blood from the stone. Unfortunately, this only hurts you since you’ll be taking on more work than you’re able, and ultimately lowering both quality and customer service.
Never Undervalue Your Product or Service
This is one of the most common mistakes new business owners make with their new venture. And it can end up damaging you and your brand for life. You can always run specials later on after you’ve established yourself within the market. But if you start out by underpricing your offerings, you won’t win the respect of your potential clients or you won’t even get the right clients in the first place, those who understand your value and choose your services gladly.
You’ll create murky expectations in your customer’s minds as well, thinking they can get a very high degree of service for next to nothing. When you eventually raise your prices up to where they need to be, everyone will get angry and you’ll risk losing them to someone else. Respect yourself by valuing your work or product properly. If you’re providing a great service, people will see the quality and respond positively.
Don’t Underestimate Capital Requirements
Not only unwise, but incredibly dangerous to the viability of your business. If anything, overestimate a bit. Avoid calculating expenses and daily operating costs with the lowest figures, even though it’s tempting. You will always need to upgrade things, purchase items that cost more than you want to pay, find that you need more subscriptions than you thought, discover that travel costs are higher than expected, need more insurance, and continually deal with the fluctuating cost of goods. There are simply too many things that are out of your control to be so conservative with your estimates. Don’t drown in your own positivity. Get real when it comes to finances. Hope for the best but when you plan, plan for the worst.
Never Skip the Bookkeeping
This is another one that can come back to bite you in a multitude of ways. If it’s just you or a couple employees and your business is simple, you may be able to handle keeping your own books, especially with the aid of great software like QuickBooks Online or Xero. But for most growing businesses, the need for a professional bookkeeper or an outsourced bookkeeping service is a must.
Good bookkeeping means having a clear bookkeeping strategy, a great system of filing and organization, recording expenses every day, saving all invoices, receipts and every other financial or contractual document, recording copies and information digitally as well, in case of fire, flooding or theft, filing and paying your taxes accurately and on time, and learning how to use all your financial reports to make better decisions for your business.
Create a Marketing Plan and Work It
Early on, marketing may seem like an extra expense, but it’s not something to overlook. A smart marketing and advertising plan, one that takes into account exactly who your audience is, and implements the latest strategies in online advertising, social media, and useful traditional methods, will help build your brand and the trust of your customers.
The right marketing plan pays off severalfold. If you’re not geared for it and don’t have someone in-house, do the research to find a professional marketer or marketing firm who can partner with you to create the perfect plan.
Get Organized & Stay Organized
This one might sound a bit dumb, but it’s no joke. It’s one thing to have a cluttered house, a chaotic garage and a less than stellar checkbook ledger. It’s a whole other matter to be disorganized with your business.
Disorganization in business means lost data, missed opportunities for growth, tax audits, unprofessional behavior, unfocused marketing and poor communication, an unprofessional workplace and an overall sense of not seeing the road clearly and not knowing exactly where to go. Organize every aspect of your business and keep it there. You’ll find everything comes easier when you do.
Choose the Right Business Partners and Investors
Know who you’re wanting to partner with. Too many entrepreneurs, in a rush of impatience and the desire to secure quick money, jump into agreements with individuals who aren’t completely on the same page and don’t have the owner’s or the business’s best interests in mind.
Choose people with a great deal of wisdom, considerable professional experience, consistent success in financial matters and investment, an open mind and creative thinking, and those who understand how long it takes to see a return. It’s better to take less money from a wise and ethical person than twice as much from someone simply looking for a quick buck and is willing to push or manipulate you to get what they want.
Find good ones and treat them well. Communicate consistently and have easy-to-understand contracts drawn up for all parties involved, even if some investors are friends.
It’s easy to get caught up in the worries and cares of the moment. In business, there are constant distractions and issues that arise on a daily, even hourly basis. If we aren’t careful and we don’t have the support we need, we just might drown in the chaos.
When you make a business plan, set it up to reflect your plans for several years. Break down what you want to achieve each month and each quarter. Make projections for further out. Realize that high profitability often doesn’t come for quite some time. It may take a while to see the return you’re hoping for. But those who think, work, and invest for long-term growth and abundance always build much stronger businesses that those who can only see a few days ahead.
Don’t Skip Out on Quality IT Support
IT professionals, especially in today’s business world, are so important. Whether you’ve got an in-house department or looking to outsource your IT needs to an experienced IT service provider, setting this up early and with great consideration is a key step to your success.
IT professionals keep your network running smoothly, protect your data and vital company information, improve customer and user experience, make you look more professional, and help you gain the advantage you need with new technologies and better analytics.
Starting and running a business is a huge responsibility. But with the right plan and consistent follow-through on a handful of good habits, you can set yourself up for growth and a solid future. Slow down, be excited, but don’t rush it. Do your research, make a plan, partner with quality people, don’t undervalue your work and think long term.
Tech Masters loves helping entrepreneurs and business owners from every market sector gain the advantage they need with top-notch IT support, time-saving technology, strong data security, and incredible customer support. Contact us today for the best IT management possible.
For quick answers to a few of your new business questions, check out our FAQs below.
Why is creating a clear business plan important?
Having a great business plan in place prepares you to apply for loans, attract investors and partners, gives you a clear road map to conduct business, helps you plan accurately for operating costs, hire more effectively, and understand the time it takes to realize your vision.
Why is it bad to undervalue my products and services?
This is one of the worst things you can do as a new business owner. Undervaluing and underpricing your services and products causes your customers to expect too much for too little, makes people think you aren’t at the level of quality that you really are, establishes a bad precedent for others to misunderstand what it is you offer, and makes it difficult to raise prices later without people balking.
What are some other things to remember when starting a new business?
Hire deliberately, neither too early nor too late, use contracts every time, don’t underestimate operating costs, have a solid bookkeeping strategy and follow it, create a marketing plan and work it, get organized, and choose the right partners.
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