If you’ve never started a business before, it can feel overwhelming the first time around. Starting a business takes a lot of hard work and planning, and statistics show that only about half of all businesses survive for five years or more.
Fortunately, there are 9 essential steps to help you launch and grow your startup:
1. Start with a Great Idea
The first step in starting a business is identifying a problem and finding a solution. Successful businesses often stem from ideas that meet the needs of a specific customer group. However, your idea doesn’t have to be entirely new—it could be an improvement on existing products or services, such as:
* Updating the look of a product
* Adding a new feature
* Finding a new purpose for a popular product
For example, Apple started with Steve Jobs’ vision for a personal computer. Over time, they have improved on this concept, creating products like the iPhone and iPad and adding features to make these products even more useful. These ongoing innovations have made Apple one of the most valuable companies in the world.
2. Create a Business Plan
Once you have an idea, you’ll need to create a business plan. This plan should provide a detailed description of your products or services, an overview of your industry, operations plans, financial projections, and a market analysis.
A business plan is also essential if you’re seeking financing, as banks and investors are more likely to support a business that clearly explains how funds will be used and why they’re necessary.
3. Secure Funding for Your Startup
Startup costs vary for every business. No matter your costs, you’ll likely need financing, which could come from:
* Friends and family
* Angel investors
* Venture capitalists
* Bank loans
You could also apply for a business credit card, many of which offer 0% APR promotions, allowing you to make purchases interest-free for a limited period. If you’re unable to secure enough funding, you risk not covering your expenses, which can lead to early closure. Approximately 29% of startups fail due to running out of money.
To make sure you have enough funds, estimate your expenses and cash flow, including loan interest. Tools like QuickBooks or FreshBooks can help you monitor expenses and stay within budget.
4. Surround Yourself with the Right People
Starting a business comes with risks, so having trusted advisors is important. Essential advisors might include:
* Attorneys
* Certified Public Accountants (CPAs)
* Insurance professionals
* Bankers
In the early stages, it’s also important to build a reliable startup team, including co-founders, contractors, and initial employees (possibly remote workers).
5. Follow All Legal Steps
From designing products to setting up your workplace, launching a startup can be exciting. But it’s crucial to follow all necessary legal steps to set yourself up for success. These steps include:
* Applying for a business license
* Registering your business name
* Getting a federal tax ID number
* Filing for a trademark
* Creating a separate business bank account
* Learning about industry regulations
* Preparing contracts for clients and partners
6. Set Up a Physical and Online Presence
Whether you need a factory, office, or retail space, consider whether buying or leasing is best for you. Owning property offers benefits like potential tax deductions and the option to rent out space. However, many startups start by leasing, which allows them to invest in other areas. Leasing can also provide access to better locations, though rent increases can be a risk.
In today’s digital world, having an online presence is essential. An e-commerce website allows you to:
* Operate 24/7, including weekends and holidays, boosting sales
* Reach customers worldwide
* Build credibility through customer reviews
A blog, search engine optimization (SEO), and social media can further enhance your online presence, helping your brand reach a wider audience.
7. Create a Marketing Plan
Marketing is an important investment for any startup, as it helps to:
* Establish your brand identity
* Differentiate from competitors
* Build customer relationships and loyalty
* Increase visibility and attract new customers
* Strengthen your brand’s reputation
Some marketing strategies to consider include:
* Engaging customers on social media and promoting special offers
* Giving rewards for referrals
* Offering free samples or demos
* Sponsoring community events to raise awareness
8. Build a Customer Base
To build long-term success, focus on building a loyal customer base. Loyal customers contribute to:
* Higher sales, as they continue to support your business
* Building trust for new customers
* Generating referrals, saving you time on new customer acquisition
Attract and keep customers by:
* Offering high-quality products or services
* Creating loyalty programs
* Using affiliate marketing through influencers
* Providing excellent customer service
* Conducting market research to meet customer expectations
* Asking customers for feedback
The International Council of Shopping Centers (ICSC) found that 92% of consumers are loyal to specific stores due to fair prices and product value, with 79% citing product quality as a key factor.
9. Be Ready to Adapt
Most startups go through significant changes in their first few years. Success often depends on being flexible and adjusting your business model as needed.
Strategies for staying adaptable include:
* Hiring innovative team members who are open to change
* Listening to feedback from customers, suppliers, and partners
* Staying informed about industry trends
Businesses that can adapt to changing customer needs are more likely to succeed in the long run.
