Ten Essential Steps to Keep in Mind When Launching a New Business

Author- | Posted- | Updated: August 12, 2020 |

Are you considering opening up a small business with minimal start-up costs and investment? Expenses – when they gather up, mount up so high that they get beyond the figures we allocated as the budget. Planning to launch a business is nothing as compared to executing that plan. There are hundreds of things that can get you stuck somewhere in the middle. According to a statistical report, about two-thirds of the small businesses are able to get past the two-year time period and survive and about a half reach the five-year mark. 

What exactly makes them survivable? – A million-dollar question for the new business owners. 

Well, it’s the strategic planning and foresightedness of the entrepreneurs that do not submerge them and keep them floated instead. 

Most of us follow the same paths that our competitors or relatives do. However, the circumstances and struggles are different for every business or company. We cannot do something just because someone else did it too! We can come up with a hundred ways to keep our expenses under control – for example, using a white-labelled product rather than the original one or using hosted VoIP instead of the conventional phone systems can actually help you save a lot. 

Step 1:
Conduct a Comparative Research 

Before you take the plunge, you have to study all the aspects of that particular business idea that you are going to pursue. The research must include all the pros and cons because in business, everything is risky, and ignorance can cause you more harm than anything else. It would be helpful if you keep yourself abreast of the threats and risks that will come along so that you can come prepared to handle them.  

As you research, you should be able to come up with the following answers: 

Is the product or services you are going to sell in demand?
Who needs them?
Which other companies are offering such services or products, and what is their progress?
What is the level of competition?
Where do the competitors stand in the market, and would you be able to stand amongst them?
How well will you be able to find growth in the market? 

Step 2:
Make a Plan 

“By Failing to prepare, you are preparing to fail.” – Benjamin Franklin 

Turning your plan into reality does not happen overnight. You need to develop a blueprint first which will guide you through the whole process of starting up, establishing, maintaining and the growing. Sometimes, in the middle of the setup, things get super slow, which may leave people demoralized. In order to avoid that, you need to set certain minor milestones, so that you do not lose your motivation during periods of slow growth. Achieving small tasks will boost your confidence and assure you that you are moving forward. Once you are all set and out on the road, there is no going back! 

Why do you need a plan? 

If you intend to apply for a bank loan, or you need an investor, you’d be required to present an official business plan to pitch your business. To be truly able to meet your business idea, you need to have a complete understanding of the market, competition and other parts of it. 

For the starters, you can devise a simple one-page plan and improve it over time as you grow more into it. Your starter plan must include the following answers 

What is your vision behind the start-up, and where do you see it in the next five to ten years?
What is your mission or purpose behind the business?
What are your objectives and are they specific and achievable?
What is your basic strategy and the distinctive selling proposition that makes your product or services different from the rest?
What is the amount of capital or investment you need to put into your business?
What are the expected monthly expenses two or three months after the business?
How much will be your anticipated or approximate monthly profit after six months of your launching the business?
What is your Plan of Action and the goals or milestones along the way? 

Once you have found out the right and legit answers to these questions, you will have a start-up plan. However, you should be able to devise a rather formal and traditional plan that would attract more investors and will lead to a better outcome. Most of the new business owners fear the traditional and extended business plan, but you have to put aside your fears before jumping into the market. Your traditional plan must include the following points that are essentially the same as the one-page plan except for the fact that it is a bit more organized and professional. 

  • Executive Summary highlights the critical information about the business or company. 
  • Company Description including its location, vision, mission and objectives. 
  • Products that you are introducing in the market. 
  • Analysis of the relevant market. 
  • Marketing strategies, pricing and promotions. 
  • Management Summary 
  • A detailed financial analysis, future growth objects and estimated current expenses. 

Step 3:
Plan your Finances 

Although small businesses do not need huge investment, but still, you need to be completely prepared for any unforeseeable circumstances. The capital amount that you need to keep secure after the initial investment must include the running expenses for at least the next 12 months. This includes property rent, production costs, manufacturing costs, travelling expenses, maintenance, employees’ funds and salaries etc. 

Step 4:
Choose a Business Structure 

Choosing the structure of the business is a decisive factor as it directly deals with taxes and liabilities. So, you need to be sure which structure you are planning to go with in the beginning because you can re-evaluate the structure anytime and change it with the one you need later. However, there are certain conditions that limit you – for example, in case if you are two partners, your business structure will also be a partnership. You can choose from the following business structures 

  • Sole Proprietorship 
  • Partnership 
  • Limited liability Company 
  • Corporation 

Step 5:
Choose a Business Name and Get it Registered 

Choosing a business name is potentially challenging from both the professional point of view and that from your personal preferences. One wants to pick a name that he somehow feels emotionally attached with. You have to take the naming seriously as it directly influences marketing and your company’s reputation and image. Funny and cute names can backfire on the company’s reputation. You can be smart enough to abbreviate your company’s name, but for that, you have to grow a little in the market. The consumers are not kind enough to find out what the acronym actually stands for. Let’s leave it for a time in future when you will have enough resources to educate the masses what the acronym stands for. 

You should do some research to ensure that someone else is not using the same name. It’s a big world, and you never know someone would have hit upon the same idea. The same name in another market or industry could work. However, you should strictly avoid it within the same domain. Once you have chosen the proper name, register it with the state office for protection and authorization. 

Step 6:
Manage your Accounts 

You have to look into the accounts carefully and vigilantly in order to manage the budget and keep track of it. You do not want to exceed the limit and regret later. You have to spend carefully as the expenses from this point will skyrocket. Avoid spending on the unnecessary thing just at this point. If you are not an accounts person, you should hire an accountant before hiring the rest of the team. 

Need for an accountant: 

An accountant is an expert who will provide complete guidance through the following: 

  • Purchasing and renting property and equipment. 
  • Choosing the structure of the business such as Sole Proprietorship, LLC or Partnership. 
  • Explaining how to keep personal and business expenses separate 
  • Getting an accounting software to develop the balance sheets. 

When you have launched, and you are in the phases of growth, an accountant would be able to get you through the audit quickly, if required. He can provide you with the current and forecasted financial scenarios all along the way so you can plan accordingly.  

Step 7:
Spot the Beneficial Location 

Location of the business plays a vital role in its success. You need to make sure that you are choosing a location that is mostly attracted by the consumers. You cannot just set up a store on an old abandoned road, which is not usually accessed by people. However, if you are a manufacturing setup, even if you are away from the central market, the consumers will reach you if you do proper marketing and advertising. Hence, it totally depends on the type of your business that which locality will be the best one for you. 

Step 8:
Put the Relevant Equipment and Product 

So, you have finally reached the point which can heavily disturb your budget. You have to put the proper stuff into the office. You have to figure out exactly how you want your business to be. You need to plan out for the utilities such as electricity and gas accounts. What are your preferences? Do you need desks or chairs and simple tables? Will you go for racks or shelves? Would there be the traditional phones of hosted VoIP phones? Do you need air-conditioners – if yes, then how many and where? The list of such questions goes on until you have come up with the tiniest of the things including the stationaries. 

Step 9:
Gather up your Team 

Once you have taken all the steps, it’s time to hire the employees. Before you start hiring, make sure that you have designated proper positions for the personnel. You should set the positions you need, the job descriptions and responsibilities and the salary range that you are proposing. Your team must be a blend of experienced to new employees so that you can have some productivity going a long way. Once you have gathered the core team, you should start working and let the HR take care of the rest of the recruitment process.  

If you face a problem getting enough people for the interviews, you might put ads on social media such as Twitter, LinkedIn as well as place ads in online and offline newspapers. Contact the university career centres which could provide you with the new graduates or contact with the temporary employment agency as a last resort. 

Step 10:
Promote and Advertise Your Business 

Give yourself a pat on your shoulder when you have reached here. You deserve one! 

By this time, you are almost done with the setup. Now you have to play on the real ground and make it accessible to the people. Just as you set up a Business plan, you would need to create a Marketing Plan to promote your business which must include the following points.

Who are your target audience?
Where can you find them?
What are their concerns?
What are their expectations?

You should better do it online as this is the world of technology, and your brand will gain recognition much faster than with the traditional streams. A unique selling proposition outlining how you are different from your competitors can also help attract consumers.

Guest Submission by Smith Gray. Opinions expressed in the article are of the author.

Smith Gray

Smith Gray is a research writer covering different domains of business strategies and the latest ideas. He enjoys exploring various aspects of technology that can lead to revolutionizing small businesses.