COVID-19 has changed the way many industries operate throughout the globe. Starting a business has always been exciting but can be incredibly daunting especially in this new normal era. There are so many things to consider, steps to follow, and it all rests on your shoulders. That’s a lot of pressure for new entrepreneurs or even seasoned pros. Thankfully, enough business owners have done it before that you can learn from their successes, and their failures even in this period.
Phase One: Planning
So you’ve got a business idea, now how do you start a business? Before you begin designing your business cards, there are a few initial steps that will help solidify your vision. If you’re launching a business from scratch, as a first-time entrepreneur, these steps will be crucial because you’ll be learning a lot about the nitty gritty side of business ownership. Ideally talking numbers, laws and regulations all details that can’t be overlooked.
1. Brainstorm your product or service idea
At this very initial stage of starting a business, you likely have an idea that excites you, but now is the time to truly analyze its viability.
Ask yourself questions like:
- What does my business offer: a product or a service?
- What problem does my business solve, and for whom does it solve that problem?
- Are there competitors in the market already, and how will my business stand out (and hopefully excel)?
Through your process of researching the industry and your competitors, you should be able to narrow down exactly what your business will do and what your advantage will be. Challenge yourself to comfortably explain your business in one or two sentences.
2. Research your potential market and customers
Market research will help you better understand who your business serves, and how much you should charge. Talking with your potential customers is a simple and effective form of market research. Whether through conversation, or a written survey, ask questions that will help you understand what problem your target market is experiencing. Pay attention to how they feel about the problem, and the prospect of solving it. Note the language they use to describe their experience. This will help you refine your product or service, and help with your marketing efforts later on.
3. Build a support network
Turn to a business mentor for advice
Finding a business mentor at this stage can be highly beneficial. You’re about to face a great deal of choices and challenges, and if you don’t have a business partner (and even if you do), having a trusted friend or advisor who can provide objective advice can be incredibly valuable. Oftentimes you and your business partner will be too close to the problem to find a solution, and someone who’s outside of the business can lend an interesting perspective. Someone who’s been through a business launch will also have wisdom to offer. They can also support you through the ups and downs of entrepreneurship, and answer the question of how to start a business. Find mentors who share your unique perspective.
4. Write a business plan
You’ve settled on a business idea, now you need to map it out. Your business plan should include a few key components:
- An executive summary outlining what your business is and why it will be successful
- A company description
- Market analysis
- Company organization and management
- Detail your service or products
- Marketing and sales plans
- Possible funding requirements and sources
- Financial projections
Writing a business plan may feel challenging in the early stages of launching a business, when so many details are still question marks, but the process will help you refine your business. It doesn’t have to be novel or all-encompassing. Just mapping out your general plan and considering all of the factors is what’s important. It will help you answer tough questions and provide a framework to launch from. Ask any entrepreneur and they’ll tell you their current business looks nothing like it did in the first business plan (and that’s OK!). Let your plan act as a mirror to reflect on throughout your launch. You might choose to stick to the plan as outlined, or edit as you go along.
Work within a short timeline
Along with refining your idea, you’ll want to refine your launch plan. It’s great to have a three-year, five-year, and 10-year vision, but if your business doesn’t make it past the first year, those plans are irrelevant. Having set plans for the long-run might also blind you to new directions and opportunities that present themselves in year one.
Having a solid vision for how to start a business, being aware of the common challenges that arise, and maintaining flexibility will serve you well in the long run. Do your best not to overwhelm your plans for launch and let your focus lie on doing one thing really well. The “extras” can come later.
Phase Two: Pre-Launch
5. Review legal considerations for starting a business
You’ve formalized your business plan and you’re getting excited to launch, but before you take the next step in starting a business, you’ve got some paperwork to take care of. The legal considerations of launching a business are some of the most crucial in order to protect your business, and yourself. For starters, you’ll need to register your business. You can register your business as a sole proprietorship, partnership, or corporation. The type of business you register as will determine the liability you personally take on, and the tax deductions you’ll be entitled to. If even these initial questions have your head spinning, consider hiring a business attorney. And even if it seems straightforward enough, you really can’t go wrong hiring one. A lawyer can guide you through every decision and help you weigh the pros and cons of each
6. Review financing considerations for starting a business
When drafting your business plan, you should have outlined estimates for your starting costs. These will have included small costs, like registering a corporation, to the larger costs of buying products if your business is selling goods, renting space and hiring staff. Have a realistic conversation with yourself about what it will cost to launch your business, and whether you’ve set aside enough capital to cover not only the startup costs, but the first year in business. You can’t count on earnings in the first year to cover your expenses, so you need to be very cautious in your budgeting and financial projections.
Sources of capital
- Loans: Loans provide an immediate amount of money for a business venture with the expectation that it’ll be repaid in time plus interest.
- Grants: A grant is money given without the expectation of repayment.
- Investors: Investors provide capital for a business and can be repaid in a variety of ways. Oftentimes the investor offers the capital in return for a percentage of the business.
If you determine you need loans or investors to launch your business, this is something a financial advisor can assist with. You can set up a proper business/company account for your business. You do not want to run your business through your personal banking. Come tax season, your accountant will thank you for this!
Set up proper bookkeeping and records for your business
Before you do anything, before you even think about launch day, work with your financial advisor and accountant to ensure you’re running your finances appropriately and tracking everything to set yourself up for a seamless tax season. You’ll need to be tracking things like financial statements, contracts, employee statements, invoices, receipts, and all tax filings and records.
7. Confirm permits and licenses for your business
Do your due diligence and make sure you have all licenses and permits needed to run your business. Operating without them will put your business (and yourself) at great risk. This is another area where a business attorney can help tremendously.
8. Review insurance considerations to protect your business
To further protect yourself and your business as you begin this great adventure, look into purchasing insurance coverage. Based on the nature of your business, you can determine what kind of coverage you require. You can work with an insurance broker to help you find the right company and the best coverage for your needs. Some important considerations as you begin your research should include: what the deductibles are, coverage limits, and what’s excluded from the coverage plans.
Common types of insurance coverage required for businesses of all sizes include:
- General liability insurance
- Product liability insurance
- Professional liability insurance
- Property insurance
- Health insurance for employees
- Worker’s compensation insurance
Phase Three: Launch
9. Write a marketing plan (for launch and year one)
Before launching your business, you need a solid strategy for spreading awareness about your new business and reaching potential customers and/or clients. Some absolutes of your strategy should include:
Set meaningful goals
You can look to other marketing campaigns for inspiration, but your priorities will be unique to your business. Defining what you are trying to achieve with your marketing plan will help you stay focused, ensure your marketing budget is spent wisely, and help you measure your success. Common goals in your first year of business may include (but are not limited to):
- Building awareness of your brand
- Cultivating brand authority within your industry
- Growing email newsletter subscribers or social media channels
- Converting new customers or clients (sales or account creations)
- Retaining new customers or clients
Determine which tactics to use
Resist the temptation to try every marketing tactic available to you. You don’t have to choose the newest or most popular options either. Instead, focus on a few tactics that will help you best achieve your marketing goals. Pick tactics that make sense for your budget, resources and personal knowledge. Some tactics you may want to consider include:
- Paid advertising (print, television, radio, social media, or sponsored content)
- Partnerships or sponsorships with media or complementary businesses
- Content marketing, like value-filled articles, videos or podcasts (posted on your website, social media or partners’ channels)
- Experiential or event marketing
- Direct marketing
- Public relations
- Contesting or giveaways
Identify key performance indicators and milestones
Which indicators will tell you whether the tactics you chose are meeting the goals you set out? Focus on a handful of metrics that are tailored to your goals, and ensure they will provide you with the information you need to make actionable decisions.
If you are building awareness, your metrics may be broad, like how many people saw or interacted with your brand (e.g., impressions, page visits, attendees at an event). You’ll be able to make future marketing decisions by comparing how many people you reached to how much you had to spend to reach them.
If your goal is to convert a new customer, you may measure a more specific metric, like a CPA (cost per acquisition). Broader metrics won’t tell you if you’re successful, but can provide context for future decision-making. For example, it’s useful to know how many people saw your marketing materials, and how many conversions that produced.
Research and set a budget
There is no right way to make a marketing plan, even among similar businesses. Research where the people are you want to reach, and determine what your options are to interact with them. You may have to test some of your tactics before you can understand what will give you the best results for your budget. Some important questions to ask yourself, or any organization you’re paying to help with marketing, are:
- What audience will this help me reach (and is it the one I’m trying to target)?
- What specific goals will this help me achieve?
- How will I measure whether it’s working?
- What outcomes and specific results can I expect? (Based on past campaigns or case studies.)
As you set your budget, include estimated outcomes. You can revise these projections as you gain more insight into what is working for your particular business. This will help inform your future marketing plans and budgets.
Marketing and promotion for your business
Your marketing plan for post-launch will look a little different from your plans leading up to the launch day, so it’s a good idea to draft a second phase marketing plan so you have a roadmap as your business chugs along through the early years. Perhaps a strategy for launch didn’t work or you discovered an audience through launch that really connected to your business. Now is the opportunity to change direction, or capitalize on the success of your launch.
Your marketing plan should aim to fully confirm and flesh out the following:
This might be particularly challenging if your “product” isn’t a hard good. Your services still need to be concretely defined so that you can confidently price them. Plus, if you can’t easily explain your product, how do you expect your customer to know what you’re selling! Review your market research for the problems you are trying to solve for your customers. If requests for additional services arise, give them full consideration before agreeing to them and pricing them.
Pricing your goods and/or services is one of the trickier aspects of running a business. Price things too high and you might turn off clients. Price things too low and you could end up running your business into the red. This is where your market research will come in handy. (Hint, hint.) What is the problem your potential customers are experiencing, and how do you solve it? Providing clear value will help you price your offerings with confidence.
Creating a plan for how you’ll promote your business in the first year or so will give you a roadmap for your initiatives. It will allow you to plan your time, and more importantly, your budget. You might have several grand ideas, but putting pen to paper will help you estimate the time and budget to see them all through. From there, you can prioritize their value for growing your business and decide whether or not to pursue them all.
Cross-promotion is a great way to generate awareness in a cost-effective way, and support like-minded businesses and entrepreneurs. Whether you’re attending industry events, or tapping into the community where your business resides, the relationships you form can lead to all kinds of opportunities. Never underestimate the importance of a friendly greeting or a community gathering.
Determining where your business exists (in your home, online, in a store front, in other business locations) will help you gauge additional costs. If, for example, you hope to pivot your online store into a brick and mortar, or host a pop-up shop, you’ll need to budget for that down the road.
No matter where your business primarily lives, building a website that houses all pertinent information should be an essential part of your marketing plan. A website provides a welcoming and engaging space for your clients or customers.
Packaging can say a lot about a product and your company. If your business is committed to sustainability, you’ll likely seek biodegradable packaging. If you’re positioning yourself as a luxury brand, you might spare no detail and create an “unboxing” experience complete with ribbons, tissue paper and messaging. Every touchpoint is an expression of your brand and communicates to customers who you are. We all know people judge books by their covers, and the same goes for your packaging. Take this as an opportunity to send a message to your customers about what your company stands for.
When we talk about positioning, we’re referring to the way in which customers and clients think of your business. Where are you positioned in the hearts and minds of your people? What words would they use to describe your business? With everything your business does, always keep in mind how it will impact the positioning of your business in the minds of your customers and clients.
Having a firm idea of who your clients and customers are will help you determine the best way to reach them. If your target market is seniors, you probably won’t be running ads on TikTok. Knowing your audience will help you create your key messaging, your positioning in stores, even your customer service tactics. Knowing your people is vital to the success of your business, at every stage. Rely on social media to tap into new audiences. You might find your business is better suited to one platform over another, but it’s still great to have a presence across several.
10. Define your sales strategy
You might have had a sales strategy in mind when you decided to start a business, but don’t be surprised if that changes post-launch. Once you start interacting with clients and customers, you’ll have a chance to test different approaches, and find what works best. Keep in mind, different strategies might be needed for different clients. As you expand your team, different strategies will work better for different team members, too. Sales is all about the individual, so don’t hold yourself or your business and team to a singular approach.
Learn how to pitch your company
After launch, you’ll continually find yourself in situations where you’re unexpectedly pitching your company. You may not realize it in the moment, but every time you explain your business, you’re putting the word out, and you never know which connection might spark an opportunity. Spend time practicing and perfecting your pitch. Test it on potential clients, friends, family and especially business mentors. Your pitch should be compelling, yet easy to understand and upbeat. It should explain how your business solves a problem, and why it’s unique.
Develop your confidence as a public speaker
As you begin pitching your company and engaging with your industry, you’ll quickly discover your comfort level with public speaking. For someone with a crippling fear of speaking in public, even interacting with clients might be nerve wracking. For others, speaking at industry events, however valuable, might induce stress for weeks leading up to it. Either way, finding confidence with public speaking will help you immensely as you adjust to your new role as a business owner. By investing in this area of personal development through coaching, courses, or community groups, your business will benefit greatly.
Build your own community for support
When pitching your business, always keep your audience in mind and don’t shy away from finding like-minded groups. For example, a woman business owner can benefit greatly from tapping into a community of fellow women business owners. They’ll share the same unique perspectives and challenges, and be able to give advice that relates specifically to women-owned businesses. They can also help connect you to investors and/or partners who like supporting women in business.
11. Define your approach to customer service
Regardless of whether you’re a company of one or one hundred, you need to consider what your company’s approach to customer service will be. Will you be lenient or firm? Friendly or formal? Establishing your tenets of customer service early will create consistency in how you engage with clients and build a reputation for your business.
Of course, given the current economic and social climate, starting a business has additional hurdles never faced before by entrepreneurs. Launching a business post-coronavirus offers the opportunity to build in the required operating practices (will your team need to work from home?) and safety measures (will you or your team be interfacing with the public? If so, are you equipped with proper PPE?). From the get-go, you can implement measures that meet government requirements, and show your customers and clients the responsibility you feel for their health and safety. You also have the chance to meet new client or customer needs that have evolved through the pandemic. That’s an incredibly valuable thing, that people are willing to put a high price on.
No business launch is perfect. You may not have the time and budget to tick off every step in our guide, but there are several must-do components that for legal and financial reasons, you can’t overlook.