The 5 basic steps to start a succesful business today

by Lorena Díaz / business / 19-08-2019

There are more than 125 million small businesses in the world and the competition is increasingly high. When starting business it is of utmost importance to avoid some usual mistakes and to follow the 5 basic steps to start a succesful business in the pursuit of success. In this article divided in 2 parts, we’ll see some tips and tricks about the process of developing a business idea and these 9 steps will serve as a guide.

An overview

It is important to bear in mind that, as we live in the digital era, in order to create a business nowadays it is no longer enough to open it and wait for customers to arrive. The competition is greater and every offline business, even a local shop, must be completed with an online version that accurately represents the values and services of that business project.

Launching a business is a process, a difficult challenge that the entrepreneur normally faces for the first time and does not know what to do and when to do it. Common errors and mistakes appear more frequently than it would be desirable but, how to avoid them?

Just because of that reason, you should consider your business as an industrial process: you start by planning, you continue by developing, then checking and finally acting in consequence. When starting a new business you should take into consideration the fact that you are already in a position of disadvantage with respect to entrepreneurs that have already created new businesses before and therefore know the process and the keys to succeed.

You have to put together a good business model. You have to choose and investigate what customers, what segments, what channels, what key alliances and what resources are currently needed and try to investigate how that might change in the medium term, and what is the main source of income that the business will have.

That said, let’s dive into the first 5 essential steps to start a successful business, which are some of the most basic things any entrepreneur should take into consideration when starting any kind of business regardless of the specific market he will focus on. This is part 1 of 2 articles containing the 9 basic steps to succeed in a business.

Are you already an expert? Skip this article and go directly to part 2 to learn the last 4 steps!

#1 Take time to do a complete research

If you are determined to create your own company, surely you already have a business idea. But if this is not the case and you are only determined to be an entrepreneur, this is the first step you must take. A good brainstorm or making a list of companies that we find interesting can be good starting points.

There is also the possibility of choosing as an option to start an existing business model such as a franchise. In this case, most of the work will already be done: the concept, the brand, and the operations, among many others.

For a small business to be successful, it must solve a problem, fulfil a need or provide a non-existent product. In a nutshell, you should offer something the market wants. Once you have a couple or three of interesting ideas, it is recommended to delve a little deeper into the business model: what will be our market exit strategy, potential customers, what pricing policy will be followed, what will you offer better than other companies, etc. If you already know these points, it is time to start creating a good business plan.

#2 Make a good business plan

A business plan is a tool to evaluate opportunities and define their viability but it also becomes a sort of “security mechanism” to minimise risks when crating a business. Remember that there are two common ways to fail: one is to do things without thinking and the other one is to think things without doing them. At this stage, these two mistakes are usually made and it is important not to commit them.

On the one hand, some start without a plan and on the other, some plan too much and never start. Your business plan must be simple, realistic and practical to be interesting to partners and investors. The good news is that there are different types of business plans for different types of businesses and each company can easily adapt it in the way it works better for them. In this article by Forbes you have a practical guide on How to create a business plan.

Normally, there are two types of business plans depending on the financial support a business needs. In case you need financial support, the business plan serves as a “business card” of the autonomous business project, especially for the application for grants and subsidies, where it is usually mandatory, but also for the recruitment of private investors or to obtaining a bank loan.

In case no financial support is needed, as an entrepreneur or self-employed person who promotes a business project you are the most interested in having a business plan, since through this document you will have a tool to analyse and plan your project, get to know it better, identify its strengths and weaknesses and start it with greater coherence and rigor, increasing your chances of success. It will also help you in organizing the necessary tasks.

#3 Plan your finances

By this point, you should have clearly understood all aspects of your project, and if you do not have them clear yet, I recommend you to return to points 1 and 2 or you could run the risk of poor financial planning.

There are various sources of financing for entrepreneurs, each has its pros and cons, but money should never be an obstacle to start your business. Some have enough capital to start, but others must go out to search for financing and that is where a good business plan becomes important. No one will give you money without any interests; even government entities and support programs expect your project to be convincing enough.

It is recommended that you put together the start-up cost for your business such us legal fees, equipment, licenses, inventory, etc. Last but not least, it is important to anticipate the cost that the business will have in the next 12 months. That said, those numbers combined are the initial investment you will need to make.

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#4 Choose the best business structure

Your shop or small business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. It is really important to choose the business structure correctly because it can impact many factors: from your business name, to your liability, to how you file your taxes. It is normal to choose an initial structure and change it as the business grows so don’t overthink, simply choose what’s right for you.

#5 Choose and register your business name

The difference between a successful businesses and what is simply “one random business” is market differentiation, and this differentiation is achieved through a series of elements such as a logo, a slogan, a name, a mission, a vision, some principles, a value proposition, etc.

Many of these elements become important aspects for a company, so you must make them unique and this way you will get the customer to remember you and prefer you among any competition. Due to that importance it would be a good idea to have professionals in design companies like Ambient Gràfic build your brand identity and logo.

The user experience is also part of the image that a customer has regarding a company or a product, and the experience includes everything; from the characteristics of your product or service to how it reaches the customer. Think about providing a positive and unique experience.

Once you have chosen a name for your business, you will need to check if it’s trademarked or currently in use and after that, you will need to register it. A sole proprietor must register their business name with either their state or county clerk. Corporations, LLCs, or limited partnerships typically register their business name when the formation paperwork is filed.

Final thoughts

With this article we’ve learnt the 5 basic initial steps to start a successful business today. Firstly, you should take time to do a complete research on the field and get to know your market and after that you can build a robust business plan, including financing. After that, the next step is to choose the right business structure and you will be ready to register the company name. At this point, you are ready to see the last 4 advanced steps to start a successful business today.

Ready for the next 4 steps? Read part 2 of this article for the last 4 steps to start a business!

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