Are you at that point where you are wondering how to start a business?
Starting your own business is probably one of the best things you can ever do in your life. No matter how it turns out on your first try, no entrepreneur ever seems to regret it or want to go back to working for someone else after they’ve tasted the experience.
So, how do you get started?
Define Your Business
When figuring out how to start a business it all begins with getting clarity on the business you want to start. Maybe you have an idea already. Or perhaps you just know that you really want to be your own boss and build something from scratch on your own.
Step 1: Decide What Type Of Business Do You Want To Start
What industry do you plan to operate in? Or what cross-sections of sectors? Like fintech or proper-tech.
Do your market research. Make sure it is a business that:
- Is in a really huge market
- You can bring value to
- You are sure you will remain passionate about for at least the next 10 years
Step 2: Define The Problem You Are Going To Solve
Businesses are built on solving problems for their customers. The more urgent the problem the better. Make sure it is one that other people are passionate about and will pay money for. Be very specific about this. Verify it is a need that others have and exactly what that need is.
Step 3: Define Your Solution
The most important part when thinking about how to start a business is answering how are you going to solve this problem? What does it do? What are the features and benefits? What is unique about your new company and solution compared to everyone else? What will you do 11x better and be famous for?
Step 4: Identify The Team You Will Need
Without a team, you’ll only be creating a new job or freelance gig for yourself. A business needs people. You need a team. You’ll achieve a lot more, a lot faster with a great team. What players and positions do you need to fill?
Step 5: How Much Money Do You Need?
Even lean startups require some money to get started and run. How much will it cost to set up your business, recruit your team, build your first product, and market and run the operation until it is making a profit?
This will reveal whether you can self-fund the business, get what you need from a loan or friends and family and co-founding partners. Or whether you’ll need to approach other investors right away.
Step 6: How Will You Start Reaching Customers & Begin Marketing Your Business?
A key component of tackling how to start a business is knowing that requires customers. It’s the lifeblood of any business. How and where will you find yours? Layout an initial marketing strategy plan and how you’ll begin reaching and pitching potential users and buyers.
Step 7: Create Your Business Plan & Pitch Deck
Put all of the above elements together in your business plan, along with your financial projections, and create your pitch deck for getting out there and raising the money you need to start and grow.
For a winning deck, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Setting Up Your Business
Knowing how to start a business starts with structure. You need to organize your business to begin recruiting, accepting investment and payments, and to operate.
Pick the business address you’ll use. Even if you are launching out of your garage or basement, it is wise to have a different business address. The society we live in is just too litigious to be giving everyone your home address today. There are plenty of virtual office services that can help you with this.
The next step is incorporating your business name. Choose a state or country. You can either do it yourself online with the state, use an online incorporation service or hire a law firm specializing in corporate law and startups.
Once you’ve filed your business you can immediately apply for a tax ID number. You’ll need this to then open your business bank account and set up online payment accounts.
At the same time, you should be reserving your website domain name, social media handles, and phone numbers in order to protect your brand and name.
Businesses sell things. How to start a business is all about selling. It doesn’t matter how fantastic the idea, technology, and design or how high the IQ of your developers is if you don’t sell anything.
In fact, it often makes sense to get out there and sell first. Perhaps even before you finish your MVP. If you know you have the money coming in and are filling orders, you move from just gambling on a business idea, to having a real business with predictable returns.
You might even be surprised that some of these potential customers can become early investors, distribution partners, and may offer resources to help you finish building it out.
Even if you only make a few pre-sales you’ll be getting traction.
Hone Your Business Model & Scale
A great part of how to start a business is to test and tweak and try again. This is a process that can go through several cycles until you really nail it.
Have patience. Keep honing your business model until you have product-market fit, and have profitable unit economics. Once you have this you can repeat and scale.
When it comes to how to start a business there can be many little tasks and steps involved. None of them has to be very hard. Break it down and just keep tackling the next one.
Hopefully, this post provided you with some perspective on how to start a business. Once you have the business that you want to start it is all bout launching then. Below is a video where I cover in detail how to launch a business.
FULL TRANSCRIPTION OF THE VIDEO:
Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about how to launch a business. Coming up with the idea and figuring out how to bring it to market is already the first step. Then the next thing that you want to do is to make sure that you’re bringing that idea to life in a way that is as powerful as possible. So, with that being said, let’s get into it.
The first thing before you even launch, you want to make sure that you understand your Why because the thing is that part of this business that you’re going to be launching is going to include that storytelling. It’s your personal story with it, whether you’re looking at onboarding customers, at onboarding investors, or onboarding your own employees.
Everything starts with your own personal story with the business of Why you’re bringing it to life. That’s how you’re going to influence others. That’s how you’re going to inspire others. For that reason, your own personal story and that Why it is critical.
The next thing is, you want to make sure you are really building up the community, whether it’s either rallying up your own network, telling them about this new launch that you’re doing. It could also be a Coming Soon page that you establish where you’re starting to receive those emails, those links that you can target later on.
You want to build the community early. You do not want to wait to open those doors, and then all of a sudden, nobody is there. You need to make sure that you have a clear understanding as to how you’re going to be driving people very soon, very fast, and then you’ve got to do that very early on. So, you need to plan, and you need to build that community as early as possible.
Also, before the launch, what you want to do is some business planning. You need to have a clear understanding of what’s going to be that 18-25-month roadmap of execution. You want to know what are going to be the different milestones; you want to know who you’re going to need from an employee perspective: advisor perspective, director perspective, whatever that is. But to have a clear understanding as to what the journey and the road ahead is going to be so that you can execute toward it.
Then you want to start testing and get feedback. Maybe that could be a qualitative analysis and quantitative analysis. That’s via either getting on the phone with potential customers and asking them a set of questions so that you can get an understanding of what they’re responding, and see if there are any patterns.
Then also what you want to do are surveys so that you get even more touchpoints, and you get to identify what are some of the pain points of those customers early on? That way, whatever you’re bringing to market, you have a clear understanding that there are already people that have a need. There are already people that are explaining to you what those pain points are, and that way, you’re addressing them head-on just with data, not with your own assumptions.
Next, you want to get clear as to what is going to be the structure of your business. Is that going to be an LLC? Is that going to be a C Corp? Are you going to be registered in New York, in Delaware, in California? Typically, if you want to build a business that is hypergrowth, that you’re going to need potential money, what lawyers recommend – and obviously, you should consult with your corporate lawyer – is a C Corp. in the state of Delaware because those are the ones that investors like the most, and because most lawyers in the U.S., if not all of them, know Delaware law because that is what they teach them in law school. With that being said, you need to get clear as to what is going to be the corporate structure of your business.
Next, you want to get a bank account, and you also want to set up your credit card processor partner in the event that you’re going to be starting to accept payments. This could be like Stripe or Square or whoever that is. You need to have a clear understanding as to how you’re going to be taking that money, how you’re going to get compensated by your own customers, and you need a place where you’re depositing all of that money. With that being said, you really need that structure on the bank account and then also on the credit card processor partner that you’re going to be using to secure those payments.
Next, you need to understand how much money are you really going to need to launch the business? How much money will be for the marketing or the PR or whatever you need to launch with a bang? Again, you want to leave a bit of a cushion because, at the end of the day, what you may anticipate typically tends to be a bit more. With that in mind, make sure that you have a clear understanding of how much money is going to be required to bring it to life.
The next thing is, you want to test. You want to test as much as you can. That is, maybe you have a landing page, maybe you already have the product or the service. Before you put it out there, try to get your first or second-degree connections to engage with it so that they can give you some feedback. Maybe there are some holes that are there that you haven’t seen or you’re not aware of, and that way, crowdsourcing that process of testing is really nice, and it could be super effective as you’re thinking about putting it out there on the marketplace.
Then you want to do a launch event, for example. At that point, you’re inviting press; you’re inviting influencers, so to get the word out there so that people on social media are talking about it, you’re tagging people at the event, or whatever that is, you need to get people aware. You need to get as many people talking about the launch of your product. If you can get on media outlets, on blogs talking about you, maybe reporters excited and writing about what you’re doing. I think that’s amazing, and perhaps you can get them all to talk about it at the same time so that you can create that positive storm around it, and it goes viral.
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