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If you consider some of the most common reasons for starting a business, like having a unique business idea, developing a career that has the versatility to develop with you, working towards financial freedom, and investing in yourself — it’s no wonder that small businesses are everywhere.
However, not every small business is going to thrive. In fact, only about two-thirds of small businesses survive for at least two years, and about half survive for five years. This means that you may be faced with a real challenge when you decide to take the leap, quit your day job, and start up your own business. The scene is often set in the beginning, so by making sure you follow all the steps you need when you start your company will have laid the groundwork for success. Saeed Torbati has plenty of advice on building your business, but here are our top tips.
Here are ten steps that are necessary to start a business successfully. Take one step at a time, and you will be on your way to successful small business ownership
1. Do your research
The chances are that you have already identified a business idea, so now it’s time to balance it with a little realism. Do you think your idea has the ability to succeed? Before you go any further, you will need to run your business idea through a validation process.
For a small business to be successful, it must fix a problem, satisfy a need or deliver something the market wants.
There are a number of ways that you can identify this need, including research, focus groups, and good old trial and error.
2. Make a plan
You need a plan to turn your business idea into a reality. A business plan is a roadmap that will direct the business from start-up to established enterprise, and eventually business growth, and is essential for all new businesses.
The great news is that there are different types of business plans for different types of businesses.
If you plan to seek financial assistance from an investor or a financial institution, a traditional business plan is essential. This type of business plan is typically long and detailed and has a specific set of sections that whoever you are talking to will look for to validate your idea.
If you don’t foresee needing financial support, a basic one-page business plan will give you clarity about what you’re hoping to achieve and how you’re planning to do it.
3. Plan your finances
Starting a small business does not necessarily require a lot of capital, but it will require some initial investment as well as the ability to cover ongoing expenses before you make a profit.
Saeed Torbati gives some more advice, but every potential business owner should put together a spreadsheet that estimates the start-up costs for your business as well as what you expect to keep your business running for at least 12 months. Those numbers combined are the initial investment you will need.
4. Choose a business location
Setting up your place of business is vital for the functioning of your company, whether you have a home office, a shared or private office space, or a retail location.
You’ll need to think about your location, facilities, and overall setup, and make sure your location works for the type of business you’re going to do. You will also need to decide whether it makes more sense to purchase or lease your commercial space.
5. Get your team ready
If you will be hiring employees, now is the time to start the process. Make sure you take the time to clarify the roles you need to fill and the duties that are part of each role.