How To Start a Business? A Step By Step Guide (2022)
Starting a business seems like a daunting idea. There are so many variables to keep in mind. So many things that could go wrong. But before all that, how can you even start a business without substantial capital or if you don’t have a trust fund and are dependent on your day job for survival?
We are going to answer all these pressing questions through this article. We will guide you through the basics of starting a business, specifically an online business and tell you how to turn it profitable- so much so that it becomes a source of income like your full-time job.
For those of you who do not have extra capital or time on the side in order to fully devote yourself to your business, this article targets you since we will discuss strategies to earn profits by spending whatever time and money you have saved on the side, without interfering with your day job and your budget.
Time and money are your biggest assets and you don’t want to waste it on unimportant things such as paid marketing conferences, money making or marketing schemes, club memberships etc. This article will provide you with step-by-step insights, which you can read through, free of cost, without spending too much of your precious time.
Take the benefit of our market research and tested business strategies rather than paying for schemes and talks and watch your business start, grow and boom.
Baby Steps First: Unlearn Conventional Business Wisdom
As said in the beginning, starting a business is not as easy as it seems. It involves a number of calculated decisions and planning on your part. It involves filtering out information and unlearning conventional modes of thinking which seek only to bog you down.
Remember that conventional modes of business advice would not apply to an online business. Most of the time this advice consists of myths or outdated precepts that would not only hold you back but may also cause harm.
How to Start a Business? Complete Analysis
Step 1: Knowing when you are ready to initiate the business venture
Being an entrepreneur is not easy. The concerned individual must be able to make decisions at the right time which proves to be in favor of the business.
Therefore, the decision-making ability of the entrepreneur must be on point such that the decision to jump into the competitive market is taken at the right time.
It is essential that the aspiring entrepreneur analyzes the resources that are presently at his/her disposal. Moreover, the entrepreneur and the team concerned must possess the required skills and experience to drive the business on to the next level.
It is also imperative that individuals assess market conditions thoroughly. It might seem easy to start a business but in reality, there are numerous layers that need to be acknowledged before pulling the trigger of business initiation.
Understanding the demand of the market is critical. The demographic you as an entrepreneur wish to target must also be clear in order to give your business a defined direction. Therefore, the mindset of an individual must be in sync with the market and the demands of the target audience that is dominating a specific industry.
Step 2: Know the Niche and Domain of your Business
When you feel that the time is right to make the leap into the corporate world, then you must move on to the next step which involves finalizing a niche for your concerned business.
Here again, the market research and the results obtained from it will come in clutch.
If you know what the demographic is in need of or if you have identified a specific and unique product that can generate demand then it will help you to build a strong foundation for your business.
Knowing the industry and the niche you are going to initiate your business in plays a vital role in determining the success rate of your venture.
To get a clear vision of the niche, it is essential that you create a list of industries that you wish to be a part of in the future.
Be it finance, commercial goods, food, beverage, or automobile industry, knowing where to start your business is equally as important as finalizing the time of incorporation.
Step 3: Designing a Business Model
After determining the business idea, niche, and time of launch, the next step revolves around the concept of creating a business model from scratch.
Formulating a plan of action acts as a blueprint upon which the fundamentals of your business will be established.
The business model acts as a tool that helps to bring about meaning and value to your idea.
Some of the most popular business models include:
- SaaS: Creating an application or a software which the target audience will be using in the near future.
- Consultancy: Offering advice and consultancy services to the general public.
- Affiliate Marketing: Helping other businesses in the aspect of marketing and getting paid by offering such services.
- Freelancing: Provide services to clients that are in need of a specific service.
- Ecommerce: Build a digital platform through which people can buy or sell products and services.
Selecting an ideal business model that complements your idea will help you to reach the very top of the corporate world.
Step 4: Chalk Out a Budget
Managing finances is another essential factor that every entrepreneur must acknowledge so that there are no issues related to budget constraints.
Splashing out an exorbitant amount of cash on a pilot project is not something we recommend.
Rather an individual should make short term goals that eventually lead to the fulfillment of long-term objectives.
Therefore, it is important to manage your finances and set aside a budget that caters to the current need.
People generally are under a misconception that the more the investment, the greater the return.
This is a false statement which consequently affects thousands of budding businesses adversely. The key is to manage your budget strategically such that it provides long term dividends.
However, if your business plan requires an additional amount of funding then the option of getting in touch with investors may also prove to be fruitful. Allocating money to your idea will definitely help to smoothen the process of business creation.
Consequently, aspiring entrepreneurs must ensure not to risk it all in the initial growth stage of the business such that any unforeseen losses may prove to ring the death knell for the business. You may also choose to seek external assistance from experts who possess knowledge and experience in the aspect of business budget creation.
Step 5: Setting Realistic and Achievable Goals
Most of the start-ups fail to reach the promised land of success due to having unrealistic business targets established in its initial stage of incorporation.
Setting unrealistic goals is a key factor to failure. Approaching a business idea with an illusion of false optimism will result in disappointment.
Knowing what to do and having a foolproof “Plan-B” will help you to close the gap between eventual success.
Therefore, it is imperative that budding entrepreneurs have realistic and achievable goals at the very start of business incorporation. Be sure to make smart and tactical decisions which involve minimal risk and maximum revenue.
Some Unrealistic Expectations That Require a Reality Check ASAP
In the previous section we talked about negative thinking which prevents you from starting your business and serves only to bring you down. In this section, we are going to talk about how a starry eyed optimism and idealism is equally harmful.
This mode of thinking could also lead you down the path of having unrealistic expectations which are not feasible and are only shattered. Following are the examples of such expectations from your business:
1. Aiming to reach millions of people at once: Having high standards and targets is good but you must also have something to show for it. Nobody becomes that famous in the blink of an eye, fame and customers are acquired through meticulous planning and experience.
It’s true that the internet can cause your product to become a sensation, but like all viral trends and sensations, it is ephemeral and fades away. You don’t want your product to be a one trick pony, you want it to have a consistent and loyal customer base.
Products that target a highly specific demographic or are quite luxurious often do not have such a big audience. Big does not always mean good.
2. Aiming at fame: One of the classic rookie errors people make while conceptualizing that business is that they aim at acquiring fame. Fame is again something that comes either with chance (rarely) or time.
One should aim instead at making the product better, increasing the efficiency of its production, delivery, marketing and advertising. Instead of waiting to acquire fame, you must constantly deliver on your own part so that consumers continue to show interest and avail your products or service.
3. Aiming to have a patent in the initial stages itself: Aiming at a patent does become necessary after a point. To derail your project and to center everything around one particular thing seeks only to hurt your business.
4. Aiming to be a billionaire from the first idea/ innovation/invention itself: Unless your product is quite revolutionary or even if it is, you cannot hope to acquire immense riches from the first idea or the prototype itself. Even a revolutionary product needs some time to get publicized, the prices to be normalized enough for wider use.
5. Inventive products and services can only be created in a factory or a specialized laboratory: Nothing could be further from the truth. Sometimes, you may invent or put your spin on something from within the confines of your room or even your basement. Inventions are not always conceived of or forged in factories or labs.
Step 6: Identify Loopholes and Potential Problems
Every successful entrepreneur knows when to slow down and analyze the overall operations process. This must also be acknowledged by aspiring entrepreneurs as well.
There are various obstacles and difficulties that will arise on an everyday basis while conducting business. Therefore, individuals who aspire to start a business must identify potential obstacles in the very beginning itself.
Another critical aspect which business personnel must keep in mind is that every problem has a definite solution.
Consider the hindrances in the business to be a great opportunity that will help you to build new skills. The greater the problem, the better it is for your decision making skills.
Every entrepreneur must stop, analyze, and then critically deduce the problems such that immediate solutions can be obtained in the long run.
Step 7: Feedback Session
After you have formulated a plan and set up goals for your business vision, it is now time that you need to get some review or feedback on your idea.
This step is important as it will help you to understand whether your ideas and plan are full proof and you need to ensure that the risk factor is reduced as much as possible after getting feedback.
Although this stage can kill many ideas, it is wise to follow this step as it might point out a few drawbacks in your plan which you have missed.
The purpose of the review step is to obtain expert advice on how to improve your concept. Instead of requesting comments on the entire company idea, focus on a specific aspect of it.
Getting feedback from the right people will ensure that the review is genuine and they might point out some aspects which might help your business to grow.
Step 8: Find a Way to Fund Your Company
The most frequent method of financing a business is through 9-to-5 employment. Avoid quitting your day job until you've made enough money to cover your expenses, taxes, and yourself for six months.
You won't be able to pay yourself in the beginning because you'll need to reinvest your earnings into your firm in order to scale it faster.
But if you are planning to start a business that does not require much capital like freelancing or something similar, then there are chances that you can quit your 9 to 5.
When you are starting off as a freelancer, then you do not require much capital and hence you can start to scale up your business with your efforts rather than investing money.
The only things which you need to invest in might be software or subscriptions. Funding your business completely depends on the type of business you are planning to start.
Step 9: Having a Partner is a Wise Move
There is a saying that 2 heads are better than one and this applies to business as well. Having a business partner will ensure a greater success rate for your business.
This is because the operations of your business will be divided among you and your partner and you both can dedicate enough time to the specific aspect of the business and make it grow faster.
Your business will require a significant amount of time and resources.
Having someone you can trust to build alongside you can help you break up the workload and make faster progress. It's also a terrific way to hold yourself accountable.
But before approaching anyone to become a partner of your business, ensure to ask yourself a few questions? Is the person trustworthy? Have you both worked on a project beforehand? Do you all have any ego issues? All these questions will help you to choose the right kind of partner for your business.
Step 10: Give an Attractive Name to Your Business
When everything is set, now you need to think of a name. You should give a name to your business that will help people connect with it in a better way.
In other words, the name should be related to the products or the services which your business is offering.
For example, if you are planning to start an IT business, then the name should have terms like Solutions, Innovations, Technology etc. Similarly, if you are planning to start a clothing business, then it is good to name your brand after a well-known designer or something similar.
The name you choose for your company should be distinctive, easy to pronounce when spoken, have an available domain name, and should be short.
Sometimes the finest naming ideas come from bouncing names off a buddy, since getting a second view can help you see things from a fresh angle. So, if you're having trouble deciding on a brand name, don't be afraid to get a second opinion.
Step 11: Complete the Registration and all the Legal Paperwork of Your Business
Registering your business with government records is vital. If you carry on business without registering with the government body, then your business will be termed illegal.
Having your business registered with the government will give you the legal licence of conducting a business and no one can call or term your business as illegal.
Moreover legal businesses are trusted more by customers. Once you are registered in the books of the government, you will be applicable to various business schemes that are offered by the government.
Once your business is registered, then indirectly losses are borne by the company and you do not take much liability, making you sort of safe from the legal point of view.
Therefore, it is wise to always register your business and improve the authenticity and reduce your liability as well.
Step 12: Launch Your First Product
Before starting the business, you must have already decided what you want to sell.
In this step, you are going to introduce your offerings to the market.
Hence, if you are planning to start an IT business, you can start by launching software which you or your team has created.
Step 13: Market Your Product Properly
The promotion stage is the most crucial element of beginning a business.
Getting your company in front of people will help you create revenue and transform your concept into a reality.
Here are some ideas for promoting your business idea.
To start off small, you can start promoting your services and products on various social media platforms. When promoting your products online, you need to ensure that you choose the right strategy.
There are 2 ways of conducting social media marketing. One is organic promotions and another one is paid one.
When you are promoting your business via organic means, the results could be a bit slow. Whereas, if you are going for paid marketing on social marketing, then the results will be faster. You can use platforms like Facebook, Instagram, Twitter, Linkedin etc.
Then if you want to invest more money in promotions, you can opt for SEO and Google Adwords, this will help you to get faster results.
Essential things/questions to consider while initiating a new business venture
1. How To Build a Product or How to Materialize Your Vision?
Since this article is geared towards making money from businesses that primarily require the internet, we will tend more towards businesses that create and profit from information-based products. This approach is radically different from the conventional approach which tends to inform many product-based businesses.
Information has become an important capital in the post internet world. The way you generate and market this information determines whether or not you can monetize it and in most cases you can. You should aim at making your initial business ventures profitable at least. A good place to begin therefore, would be an information-based product.
This product is guaranteed to earn money, if executed in a proper manner, in the shortest amount of time. It requires less effort and can be easily sustained alongside your day job.
An information product is the direct result of the internet. It therefore is more efficient and different from classical material-based products in the following significant ways.
1. While a physical product requires a long time to get manufactured, tested, perfected and patented, the information-based product can be manufactured in days.
2. In terms of someone being able to steal your idea, the chances are that both products are equally susceptible to that but information-based products are still at an advantage which is discussed in the next point.
3. The possibility of innovation, adaptation or coming up with a new product altogether is better afforded by information-based products rather than material products.
If someone has copied your idea then chances are that you could quickly innovate and modify it to stay one step ahead of cheaters. It is extremely difficult to do that however, in a short period of time, in case of a traditional, material product.
4. In case of a traditional product-based business, you encounter a lot of external barriers in the form of market research for innovation, patents, lawyers, bureaucracy, permissions etc.
While in the case of an information-based product or business, there are next to no external barriers except some such as plagiarism of violation of someone’s intellectual property which are anyway malpractices that most honest businesses do not engage in.
5. When one compares the profits that one can earn from a product-based business, studies reveal that these margins are fair if the business is run on a small scale. The process of upscaling however, is quite costly and the profit margins are also poor in terms of the investment put in for the whole rollout process.
In case of an information-based business, the profit margins are large and keep on increasing as you increase the scale. You just have to devote more time, energy and resources as the business grows.
6. The chances of your business succeeding in the first go itself with a product-based business are quite less. In case of an information-based business, the chances of your business succeeding and becoming profitable are relatively high.
7. In terms of the name that you’ll earn and the prestige that comes along with it would be higher in the case of a material product. That fame however, comes at a great cost and is not economically sound most of the time.
In the case of an information based business, the chances of acquiring fame is significantly lower with the benefit of yielding concrete economic results.
These are the cards on the table, the choice is yours. Our suggestion however, as someone who is a beginner with a day job and with a lack of initial capital would be to choose information based products because they could act as income supplements to your day job.
Moreover, if it blows up then you could also replace your day job with an information product based business.
2. Content Creation: The Bedrock of Information Based Product Business
As indicated by the title, content creation is the bedrock of those businesses which aim to sell information based products. There are a number of ways to generate content which does not require you to spend a lot of time, money or effort. Content can be created and transmitted through various media.
One could either impart information textually (blogs, articles, books, newsletters, product reviews, software reviews, advice et al) or visually (pictures, gifs, graphics) a combination of visuals and texts (memes, comics) and through a combination of text, audio and visual media (short videos, vlogs, Vines, TikToks, reels et al).
All these means of creating content just involve a bit of creative thinking on your part.
Questions such as how should I make this information available to people in a way that is both entertaining as well as instructive or that caters to a particular need or fills a particular gap of information in the marketplace. As exemplified above, mere writing is not the only way of generating and imparting content.
3. The role and importance of lead generation in the corporate world
Lead generation is an essential aspect that must be acknowledged by new businesses in order to attract more sales. The potential leads collected will help your business to generate sales by identifying prospect clients.
The following are the steps that you should follow in order to generate leads to boost your business
- Deliver relevant information to a target demographic
- Use that information to target potential customers to related websites/ portals
- Keep updating your own website with relevant content so that the people visit it again and again. This can be done through Search Engine Optimization (SEO)
- Collect the visitor’s contact information through forms in order to further sustain communication. Form builder softwares become very useful in this context, its significance is discussed later in the article.
- Invest in marketing automation software. This is also dealt with later in the article.
- Invest in app clone scripts (eBay clone scripts for instance).
What Does Search Engine Optimization Mean From a Marketing Standpoint?
From the standpoint of businesses and marketing, search engine optimization is a technology which revolutionizes advertisement. Think of the advantages of traditional advertisement. They help bring a brand closer to its customers.
Any brand which offers a product or a service, needs an increasing set of consumers in order to flourish, advertisements not only tell the customers why they should buy a particular product of a particular brand but also build goodwill and brand value.
It forges a personal connection between the users and the brand, it aims to make the brand a household name and thus increases its reach.
Thus, if any query related to the services offered by a particular brand is entered into a search engine and if the brand’s website is optimized, the search results would display that particular brands’ webpage on top.
This helps in amplifying the brand in ways which couldn’t be imagined earlier. It has thus revolutionized advertising and made it even more efficient. Both in terms of money invested and results generated.
Barriers to Innovative Thinking
There are certain barriers to thinking which ultimately create a defeatist mindset which should be avoided at all costs. Following are some common barriers to innovative thinking.
1. Preoccupation with One’s Age: A lot of conventional wisdom says that a business should be started at one’s youth. This is false and ageist advice. You can start running a business at any age. There is no age barrier. Modes of thinking such as ‘what if I’m too young or too old for this?’ are demotivating and unnecessary, they only have a negative impact on you and possibly on your business.
If you have an idea for a product or a service which you feel is useful and people would pay money to avail it then, your age ceases to matter. No customer looks at the age of the business owner before buying a particular product or a service.
Customers on the internet only care about the product that you’re offering, any other preoccupation becomes irrelevant. If you have something that the customers want, then you will be able to sell it irrespective of your age. The internet is largely a merit-based market, if your product has merit then it will be bought and your business would flourish.
2. Lack of Money or Technical Skills: Since this article specifically targets business owners who do not come from rich families and who do not have excess capital stored up to spend on various aspects of building a business, we would insist on this point. Money is definitely important but there is no such thing as I do not have enough money.
You can use your ordinary savings that you have set aside for your business in order to create a decent website which would ultimately yield maximum returns. We will instruct you as to how you can build a fully functional and interactive website without the help of a technical developer who would charge you a lot of money.
Nowadays, websites are available for quite cheap. One can create a high-quality website for under a 100 dollars without paying monthly hosting charges.
Your incipient online business hinges on your website and therefore, it is one of the most important investments that you make while creating an online business. In addition to this, one does not require insane amounts of money for product designing and manufacturing.
If you are willing to spend a little bit of your money and substantial amount of time and are willing to learn new things and be up for anything, then you can create a product yourself for next to no money.
3. Lack of Time: The beauty of creating an online business is the fact that you cannot make up excuses such as ‘I don’t have enough time’. One does not need a lot of time in order to run an online business.
You just need to manage time and carve out bits of it from your day job or other activities in order to spend on your business. Time management is important. If you learn how to manage time then you will find that you can run your business successfully without having late nights or long breaks.
It can be run alongside your daily routine. Your internet business is a job but it is not a full time job. By taking small steps everyday, by getting bits of work done everyday and by not letting your tasks pile up, you can run an online business profitably.
A schedule or a to-do list works quite well in this context. Finishing small tasks on your to-do list on a daily basis enables you to convert these short scraps of time into significant monetary returns.
4. Excuses Related to the Current State of the Economy: A lot of people are hesitant to start their business because the current state of economy is usually not good, as evidenced by news reports, economic articles and news channels.
One thing to keep in mind however, is the fact that the economy is not uniform across the board. There are a number of things that your business could do to boost the local economy.
Macroeconomically maybe, the country might not be faring well, micro economically however, there are various other factors that might come into play. True, the overall state of the economy has an impact on your business, however, while starting a small scale business, these factors play only a minute role and it may only have a negligible impact on your specific business venture.
Consumers are always there regardless of whether your product is common and utilitarian or a niche, luxury based product. It's only a matter of finding and attracting the right kind of consumers that could take your business to the next level.
This article will provide you insights as to how to attract and retain relevant leads and convert them into loyal, paying customers.
5. Lack of Ideas: Your entire business hinges on a particular idea. It is impossible to even seriously conceptualize the possibility of owning and running a business without having an idea in mind, no matter how rough, idealistic or half baked it sounds.
All businesses begin with an idea and it is by setting your goals and in the process of achieving them, you realize which direction to go in or which decisions to make.
The initial idea is important. It could undergo revisions, changes or even complete inversions but it is important to have an idea first. With the advent of the internet and other technologies, the market has changed in ways that we cannot even fathom, this has brought in immense possibilities and therefore, there is no lack of good ideas that cannot be monetized.
Even if your product is not new, there are a number of consumers everywhere that are always looking for change and for something better. You could be opening a new bakery for instance. Baking has been around for a long time. This does not mean that you won’t have customers. Your product could mount a significant challenge to the competing brands or products, you just have to find the right way to design and market it.
6. Intimidation through the Presence of Significant Competition: People often get intimidated because their product is the same as that which is popularly consumed. ‘How could I even hope to compete against these big established brands?’ is the refrain.
This is an old way of thinking. It's true that the bigger brands have more capital and are well established through their offices, factories, advertising and workforce.
The internet however, has significantly levelled the playing field in the sense that every business now has equal opportunity to market, advertise and showcase their products. Nobody has a monopoly on the internet. Depending on how good your website is and how well your product is known, even in the niche market, it would be featured on the same platform as that of these established brands.
The good thing about owning a small business is the personal contact that you have with your customer base which allows you to create new, innovative and customized products catering to a particular demographic. It is the era of the small businesses and by starting your business, you would be a beneficiary.
So, cast these defeatist thoughts aside and jump on the bandwagon because it has the potential to yield immense profits and revenues.
7. Lack of Specific Technological Knowledge: This is a barrier which can be easily overcome. Computers and softwares and apps have evolved to a point that anyone with even a basic knowledge of how to use computers or a smartphone can easily follow the steps to get their tasks done. In most cases, the usage of various tools is self-evident, in other cases however, coding is required.
There are however, many services that eliminate the need for coding and provide you with the finished product itself, that too at very reasonable costs. If you are a do- it- yourself (DIY) person then there are a number of courses that you could easily enroll at or a number of helpful instruction tutorials on YouTube which will tell you what to do, for free.
Nowadays, you do not need to be a coder to create a website and run it, many companies create them for you at no cost at all. Sometimes, you only require to create a profile on certain platforms in order to be a seller, you might not even need a website in the initial stages.
A lot of eBay-based sellers merely create their profile on eBay which takes not more than 5 minutes and a few clicks.
8. Education Status: While education in general is very important and it matters in corporate and academic fields. In a business, one’s degree does not matter. Your customers on the internet are not going to ask you about your degree, they are just concerned with the product or the service offered.
While people with a background in say finance or economics would have a clearer idea of how things work, business sense comes from practicality, it does not merely come from education. You anyway come to know about many of these concepts while running your own business.
Business sense and skill is sometimes innate and sometimes acquired through practice and your dealings with the world. Your business being a success or a failure is not dependent upon the number of degrees that you have or from the type of school or college that you are/ were in. These things are simply irrelevant when it comes to running a business.
9. Fear Regarding the Theft of Your Idea: This fear is quite real and it can prevent people from venturing out into the business world. The fear is not irrational, there are unethical businesses which are based on rip offs from an original idea. You could prevent that from happening by getting your product, technology or innovation patented.
This however, is a lengthy as well as an expensive process. The best way to get around that is to continue selling your product and making wider forays into the marketplace even if your innovation hasn’t been fully realized or patented yet.
Unethical businesses would copy but nobody remembers the product which was second best or which came later.
If you are an innovator then chances are that you’d innovate more and keep adding value to your product, which would let it stay unique. Do not stop doing your business for the fear that someone else will copy your idea and make money off of it. The best thing to do is to keep moving, keep growing and keep innovating.
Some Other Barriers to Your Fledgling Business
- Being prone to others’ influence and discouragement
- Getting influenced by people whose goals aren’t same or even lower than yours
- Having wrong advisors and role models
- Not meeting your targets and merely waiting for things to happen.
- Not putting in enough hours and effort, especially in the beginning.
- Not working smartly and strategically. Hard work pays, yes but smart work pays better and saves time.
- Believing that only hard work can lead to substantial results. There are a number of factors involved. Break out of these conventional precepts.
- Staying within your comfort zone and not taking any risks or venturing into something new.
- Thinking that your circumstances or situation is unique or radically different and therefore various relaxations apply or that something might not happen for you.
- You get new ideas but you do not follow through with them, waiting for some other new technology to come up and render it irrelevant or to refine it which traps you in a vicious cycle of idleness and inactivity.
This article is a detailed how-to guide that you can peruse before venturing out into the business territory. If you are tired of working under bosses, having a 9-5 workday, boring work, workplace and colleagues and if you have an acumen for business then starting your own business is the right step to take.
We instructed you as to how to avoid common sense notions and myths, what mindset to cultivate before starting your own business, useful hacks and trips and various other money saving techniques.
Being a businessperson is about smartly utilizing whatever resources that you have with you. These resources along with a few minor investments go a long way in building your business.