The First 10 Steps To Starting A Business

The First 10 Steps To Starting A Business



The First 10 Steps To Starting a​ Business
As a​ freelance writer and business consultant,​ a​ lot of​ people come to​ me with a​ business idea and want my help to​ write a​ formal business plan.
Contrary to​ what many aspiring entrepreneurs think,​ writing a​ business plan isn't the​ first or​ most important step to​ start a​ business .​
For most people-especially those who have not yet started a​ business-this is​ actually one of​ the​ last things you want to​ do in​ the​ start-up and get-off-the-ground phase.
This article is​ specifically designed for those brave souls who have never started a​ business,​ have a​ burning desire to​ do so,​ but don't know where to​ start .​
Here are 10 practical,​ learned from the​ school of​ hard knocks,​ that will help you avoid common pitfalls and get started right .​
(And keep in​ mind that these are intended for businesses that need little to​ no start-up capital.)
1 .​
Read
Before you do anything else,​ read these four books in​ order: Cash Flow Quadrant by Robert Kiyosaki,​ the​ Art of​ the​ Start by Guy Kawasaki,​ Burn Your Business Plan by David Gumpert,​ and the​ E-Myth Revisited by Michael Gerber.
2 .​
Dream
Take time to​ create your business spiritually before you create it​ physically .​
See it​ in​ it's best,​ most perfect state,​ as​ a​ world-class operation .​
How does it​ look,​ feel,​ taste,​ smell,​ and sound?
Entrepreneurship is​ one of​ the​ hardest things you will ever do,​ and your business must invigorate and excite you consistently,​ otherwise you won't last through the​ hard times.
Write these dreams down--this is​ not a​ business plan,​ just written dreams,​ plans,​ goals,​ and brainstorms .​
The formal business plan will come much later.
3 .​
Research
Before you invest a​ lot of​ time and money in​ your dream,​ do adequate research to​ find out if​ your idea is​ viable and sustainable.
In this step,​ you basically want to​ ask and answer a​ lot of​ questions,​ such as​ these: Will the​ market support your idea? What evidence do you have to​ support this? What discontentment exists that your idea solves? Will it​ unleash an​ ideavirus? Who else is​ doing it,​ and how successful have they been? What will you do differently? Do you have a​ readily identifiable market? Do market trends support the​ idea,​ or​ will the​ idea be obsolete in​ a​ few years? Do you need funding? If so,​ how much and by when? What technology can be leveraged in​ the​ business? What skills do you lack necessary for the​ business?
Remember also that hands-on experience can be the​ most useful form of​ research--you may want to​ implement your business on​ a​ small scale at​ this stage to​ see what the​ market tells you.
4 .​
Form an​ Entity & Ensure Legal Compliance
Assuming you're convinced that your idea will work,​ now it's time to​ make it​ real and form a​ business entity .​
You need an​ entity for four reasons: to​ be legal,​ to​ maximize tax savings,​ to​ decrease liability,​ and to​ maintain control.
Your basic business entity options include a​ sole proprietorship,​ LLC,​ S-Corporation,​ and C-Corporation .​
Meet with an​ attorney and a​ CPA to​ discuss the​ differences between them and choose the​ appropriate entity for your uses .​
This will cost about $125 if​ you do all the​ paper work yourself,​ or​ between $200 and $500 if​ you use a​ professional or​ an​ attorney.
In addition to​ your entity,​ you must also ensure that you are legally compliant in​ all other areas .​
For example,​ if​ you have employees,​ you probably need Worker's Compensation Insurance .​
a​ good attorney will help you safely navigate all of​ the​ legal issues you will face.
5 .​
Generate Revenue
This step is​ absolutely critical .​
Too many newbies try to​ do too much at​ once,​ and are so concerned about things like image that they spend tons of​ money,​ time,​ and effort on​ logo and branding work,​ marketing brochures,​ advertising,​ etc .​
While all of​ those have their place,​ they should be paid for BY the​ revenues generated by the​ business.
Now that you've had your time to​ dream,​ it's time to​ be extremely pragmatic about applying them .​
Do whatever it​ takes to​ generate revenues,​ even if​ it​ means door-to-door selling .​
No dream,​ however inspiring,​ will ever be realized unless you can pay for it​ to​ materialize.
6 .​
Create Financial Systems
Now that you have cash flow,​ it's imperative that you manage it​ wisely .​
Account for EVERY income and expenditure,​ no matter how trivial,​ and maintain impeccable records .​
You'll be glad you did come tax time.
The most common accounting software programs are Quick Books and Quicken .​
Or,​ you can use a​ quality bookkeeping service,​ which can help you with payroll and quarterly taxes in​ addition to​ keeping your records.
7 .​
Begin Writing an​ Operations Manual
An Operations Manual gives you the​ ability to​ leverage your efforts and duplicate yourself by providing simple,​ step-by-step directions that anyone can follow to​ perform any task.
Systematizing your business is​ the​ most important thing you will ever do,​ and you can never start soon enough .​
Systems,​ of​ course,​ will be refined over time,​ but it's critical that you get them down in​ writing and keep them updated.
You may also consider using a​ professional writer to​ write your Operations Manual.
8 .​
Create Marketing Systems
Many novices want to​ immediately start spending money on​ advertising,​ without knowing the​ costs and/or benefits .​
It's been said that advertising takes a​ lot of​ money,​ while marketing takes a​ lot of​ time.
For start-ups,​ stick with marketing; in​ most cases,​ you have time,​ but you don't have money,​ and marketing is​ generally more effective anyway .​
Advertising is​ costly and relatively ineffective .​
Start-ups should be obsessive about managing finances wisely,​ and very cautious about spending money.
Advertising would include things such as​ billboards,​ radio and TV ads,​ flyers,​ yellow page ads,​ etc .​
Marketing usually boils down to​ direct selling of​ some kind,​ whether it​ be telemarketing,​ door-to-door sales,​ customer referral programs,​ etc.
If your idea and delivery systems are good enough,​ the​ business should market itself virally anyway .​
In any case,​ find something that actually gets results,​ stick to​ it,​ and create and document systems in​ your Operations Manual.
9 .​
Refine Systems,​ Replace Yourself,​ More Refining,​ & Document Religiously
In the​ first year or​ so,​ you will most likely be performing most,​ if​ not all,​ tasks yourself .​
This gives you the​ opportunity to​ learn and work out necessary details,​ but it​ won't be sustainable when it's time to​ grow.
With an​ Operations Manual in​ place,​ you can now begin hiring and training others to​ replace you .​
Once they're replaced,​ then continue to​ oversee and refine the​ systems consistently.
Also,​ you must be absolutely religious about documenting every aspect of​ your business .​
For example,​ if​ your business does door-to-door sales,​ all salesmen should document how many doors they knock,​ how many people they actually talk to,​ and how many people bought.
Over time,​ this data will prove to​ be invaluable as​ you seek to​ refine your systems; without real numbers you have no idea what's working and what's not.
10 .​
Write a​ Business Plan
The final step in​ the​ start-up process is​ the​ one that most people think they should start with .​
Here's why it​ should come last: if​ you want it​ to​ secure funding,​ investors will want to​ see a​ proven track record before they invest anyway,​ and if​ you do it​ after the​ first nine steps,​ you can now do it​ right,​ with actual numbers,​ facts,​ and statistics rather than unfounded assumptions.
Furthermore,​ this gives you an​ opportunity to​ reconnect to​ your dreams after wading through a​ lot of​ trials.
And,​ like an​ Operations Manual,​ you can always use a​ professional writer to​ write your business plan.




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