How To Start Your Own Small Business

 

This article shows you how to start your own small business:

  • Business Idea
  • Startup business capital
  • Business idea
  • Register a business name
  • Choose a business location
  • Market research
  • Customer research
  • Competition research
  • Business plan
  • Customer service
  • Getting started
  • Financials

Before you start your own business, you need to have a workable business idea. There are a number of sources from which you can get business ideas, including the following:

  • Radio, TV and Print media
  • Online sources
  • Focus groups
  • From within you (trial and error)
  • Personal observations
  • By interviews, questionnaire and surveys
  • From conversations with people

Most importantly, the business idea you need to start your own business should be able to:

  • Solve a problem
  • Fulfill a need
  • Or offer something the market needs

As you research the business idea, some of the questions you should answer include:

  • Is there a need for your product?
  • Are there other companies offering similar or the same products or services now?
  • What is the competition like?
  • How will your business fit into the market?
  • What strategies and methods are you going to use?

In addition, you can get business opportunity by listening to people when they discuss their problems.

For example, you may hear someone say he is making good money from fixing cell phones. That is probably a salient call to you to learn and start to fix cell phones.

Startup Business Capital

Finding capital to start your own business can be quite challenging for many would-be entrepreneurs.

For example in Nigeria many banks are not interested in funding new startups. They fear that they may not be able to repay their money.

If you do not already have the estimated startup capital, you should consider using one or a combination of the following options:

  • Work part or full time to save money to start your own business.
  • Ask family and friends to give you soft loans to enable you start your own business.

In any case, you should not borrow money to start your own business. Interest charges on borrowed money can hurt your business before it even has a fair chance of succeeding.

Busiess Startup: Allocation of capital

When you have raised the amount of money you need to start your own business, you should allocate your startup capital properly.

How you allocate your startup capital between fixed assets and current assets should depend on the nature of your business.

In other words, you should not allocate the bulk of your startup capital to fixed assets.

Therefore, you should reserve enough of the business startup capital for current assets, especially working capital. Your business needs a reasonable amount of working capital to run smoothly.

Related: How To Manage Small Business Finances Efficiently

Business Startup: Business idea research

Every small business starts with an idea. Therefore, you should research your business idea before you start your own business.

You need to do this because there is hardly any business now which someone else has not done before. In other words, you might not be the only person offering the product or service.

Even if you are developing a brand, you still need to research the business idea to ensure that it is a brand somebody will want to put his money.

For example, you should be able to provide honest answers to the following questions:

  • Who are the players in this or similar business now?
  • Have other people done this type of business before?
  • If so, did they do well?
  • Or if they did not do well, what went wrong with them?

Choose a business name

You need to choose a name for your business. Make sure that the name you choose is not already in use by another business.

Next, you need to register your business name before you start your own business. Moreover, registration of your business name will place you in a better position to do businesses with companies, banks and government agencies.

Registration of your business name with the relevant government agencies should enable your business to appear more authentic.

If your business is one that require license or permits, do ensure that you obtain the relevant licenses and permits.

Furthermore, if your business requires formal training before  you can start your own business, do sign up for one so that you can avoid many customer service issues.

Business startup: Market research

Market research is very crucial to the success of your business. Therefore, you should not go into a market just because you see people in that market.

You need to research the market because changes do occur without information. Plus, you need to research the business idea so that you will not go into a business that is not right for you.

You need to use suitable market research methods that should enable you to answer the following questions:

  • Which industry am I into? Is it fashion, automobile and so on?
  • Who are the people or companies in this market? Are they large or small companies?
  • Can this business bring in enough income to keep me in business?
  • Is the market of a seasonal nature?.
  • Has the market been stable over time?
  • How is the market now?
  • What are the future prospects of the market?
  • Is there any likelihood that government might make policies that could negatively affect this market?

Even after starting your own business, do not forget that market research should be a continuous process.

Business startup: Customer research

Similarly, you need to research your potential customers. Though it is not easy to say exactly how customers will behave, you should find out, as much as possible, the tastes and demand pattern of customers in that market.

Therefore, you need to use suitable customer research methods and processes to research about customers. For example, you can get useful info by:

  • Asking questions
  • Conducting surveys
  • Giving out questionnaires
  • Making personal observations

Besides, your customer research process should help you to find answers to the following questions:

  • Who are my target customers?
  • Where do they stay
  • How often do they buy?
  • Are they male, females, adults or children?

Business startup: Competition research

You should use suitable methods to research about competition. Do not forget that business is war and that the common enemy is competition. Competition will always be there.

In the market, there should be many sellers, with each seller using different tactics to sell, keep his customers and acquire new customers.

Therefore, your competition research process should enable you to know the tactics vendors in the market are using to fight competition.

Besides, you should use suitable research processes to enable you fight competition and make your business stand out from the crowd.

Business startup: Customer Service

Customer service is where business is won or lost. Remember that the function of customer service is to provide solutions to poor service. Therefore, you must put in a place an effective and efficient customer service.

Most importantly, you should hire capable customer service personnel who thoroughly understand your business and the industry you belong to.

Startup: Write A Business plan

As Benjamin Franklin once said “if you fail to plan, you are planning to fail”. Your business plan could be simple or complex, depending on the needs of your business.

For example, a small retail shop, professionals such as doctors, surveyors, engineers, may not need to write detailed business plans. A business plan written on an A4 paper might do, provided it contains basic points

On the other hand, if you are planning to seek funding from bank or government agencies, you will certainly need a detailed business plan.

More importantly, your business plan should provide a road map or blue print, stating your goals and how to achieve them. Your business plan should keep you focused on your vision for the business.

However, you will need to update your business plans as you get to know the market and competition.

Getting started

Before you start your own business, you should be able to know the activities of the business which you can carry out.

Similarly, you should also know the activities of the business which you will people to do for you.

There is, therefore, need to put your team together before you start your own business.

Additionally, the following tips should help you to get your business off the ground:

  • Hire the right caliber of staff
  • Start small to test the market
  • If the result of the market shows promise, then you can put in more resources: men, money and materials
  • Do not spend more money than your income.
  • Track your income and expenses
  • Always nose around for latest industry info so that the train will not leave you behind.
  • Consider leasing some equipment instead of buying.

Business Startup: Financials

You should choose an accounting system to track and record your incomes and expenses.

If you cannot do it yourself, you can hire a bookkeeper or an accountant to keep the records for you on a part-time basis.

You need good financial records to prepare annual accounts for your business. Annual financial statements should help you make sound business decisions. Furthermore, annual financial statement should reveal stats that should show the the true performance and financial position of your business.

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