Are you at that point where you are wondering how to start a business?
Starting your own business is probably one of the best things you can ever do in your life. No matter how it turns out on your first try, no entrepreneur ever seems to regret it or want to go back to working for someone else after they’ve tasted the experience.
So, how do you get started?
Define Your Business
When figuring out how to start a business it all begins with getting clarity on the business you want to start. Maybe you have an idea already. Or perhaps you just know that you really want to be your own boss and build something from scratch on your own.
Step 1: Decide What Type Of Business Do You Want To Start
What industry do you plan to operate in? Or what cross-sections of sectors? Like fintech or proper-tech.
Do your market research. Make sure it is a business that:
- Is in a really huge market
- You can bring value to
- You are sure you will remain passionate about for at least the next 10 years
Step 2: Define The Problem You Are Going To Solve
Businesses are built on solving problems for their customers. The more urgent the problem the better. Make sure it is one that other people are passionate about and will pay money for. Be very specific about this. Verify it is a need that others have and exactly what that need is.
Step 3: Define Your Solution
The most important part when thinking about how to start a business is answering how are you going to solve this problem? What does it do? What are the features and benefits? What is unique about your new company and solution compared to everyone else? What will you do 11x better and be famous for?
Step 4: Identify The Team You Will Need
Without a team, you’ll only be creating a new job or freelance gig for yourself. A business needs people. You need a team. You’ll achieve a lot more, a lot faster with a great team. What players and positions do you need to fill?
Step 5: How Much Money Do You Need?
Even lean startups require some money to get started and run. How much will it cost to set up your business, recruit your team, build your first product, and market and run the operation until it is making a profit?
This will reveal whether you can self-fund the business, get what you need from a loan or friends and family and co-founding partners. Or whether you’ll need to approach other investors right away.
Step 6: How Will You Start Reaching Customers & Begin Marketing Your Business?
A key component of tackling how to start a business is knowing that requires customers. It’s the lifeblood of any business. How and where will you find yours? Layout an initial marketing strategy plan and how you’ll begin reaching and pitching potential users and buyers.
Step 7: Create Your Business Plan & Pitch Deck
Put all of the above elements together in your business plan, along with your financial projections, and create your pitch deck for getting out there and raising the money you need to start and grow.
For a winning deck, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Setting Up Your Business
Knowing how to start a business starts with structure. You need to organize your business to begin recruiting, accepting investment and payments, and to operate.
Pick the business address you’ll use. Even if you are launching out of your garage or basement, it is wise to have a different business address. The society we live in is just too litigious to be giving everyone your home address today. There are plenty of virtual office services that can help you with this.
The next step is incorporating your business name. Choose a state or country. You can either do it yourself online with the state, use an online incorporation service or hire a law firm specializing in corporate law and startups.
Once you’ve filed your business you can immediately apply for a tax ID number. You’ll need this to then open your business bank account and set up online payment accounts.
At the same time, you should be reserving your website domain name, social media handles, and phone numbers in order to protect your brand and name.
Businesses sell things. How to start a business is all about selling. It doesn’t matter how fantastic the idea, technology, and design or how high the IQ of your developers is if you don’t sell anything.
In fact, it often makes sense to get out there and sell first. Perhaps even before you finish your MVP. If you know you have the money coming in and are filling orders, you move from just gambling on a business idea, to having a real business with predictable returns.
You might even be surprised that some of these potential customers can become early investors, distribution partners, and may offer resources to help you finish building it out.
Even if you only make a few pre-sales you’ll be getting traction.
Hone Your Business Model & Scale
A great part of how to start a business is to test and tweak and try again. This is a process that can go through several cycles until you really nail it.
Have patience. Keep honing your business model until you have product-market fit, and have profitable unit economics. Once you have this you can repeat and scale.
When it comes to how to start a business there can be many little tasks and steps involved. None of them has to be very hard. Break it down and just keep tackling the next one.
Hopefully, this post provided you with some perspective on how to start a business. Once you have the business that you want to start it is all bout launching then. Below is a video where I cover in detail how to launch a business.