Running a business can have a powerful impact on your life and the lives of those around you. But before you can run a business, you need to learn how to start a business.
Deciding to start your own business can seem like a daunting prospect if you’ve never done it before. Luckily, plenty of other entrepreneurs have, and you can benefit through the wisdom they gleaned from their successes—and their mistakes.
Finding a business idea is something you can approach systematically by relying on time-tested approaches that have worked for other entrepreneurs. No matter whether you're looking to start a low-investment business on the side or you'd prefer to go all in on your idea, the best way to find a product to sell includes strategies like:
Mining your personal interests. What do you like to do in your spare time? Are there products you can sell that relate to your hobbies or that would solve a common frustration you have?
Research existing products. Peruse product reviews to see if there are common complaints about popular products and if you can identify gaps in the market.
Capitalize on trends. If you notice a particular product seems to be popping up everywhere, or you have a great idea to help make the most of a popular item, you might be on to great online business ideas.
Remember, all you need is one idea to get started. Many successful businesses launched with a signature product and expanded into complementary goods from there.
Validating your business might sound difficult, but it’s really just a matter of testing whether customers are willing to pay for your product before you sink too much time and money into it. It's important to validate your idea no matter what type of business you’re starting.
There are plenty of ways to validate your business, from the simple to the complex. Here are some tactical examples that can help you figure out how to calculate market demand before getting in too deep.
Set up a store to take preorders
Launch a crowdfunding campaign
Create a beta of your product or service to sell
There are other ways to validate your product ideas but, when in doubt, start selling as quickly as possible. Learning from direct customer feedback and understanding how your products are being used is invaluable when learning how to start a business from scratch and growing it.
Work on finding a name for your business that makes it clear what you do, that’s short and memorable, and that isn’t already in use in your industry. This isn’t an easy task, but it’s one that’s achievable with a bit of effort and imagination.
Name generators can help you come up with a list of unique ideas, and there are also plenty of time-tested naming best practices to lean on for direction.
A strong name will usually have a few characteristics:
Short and simple. You want customers to be able to quickly remember your name, and the best way to do that is to avoid a name that’s too long. One or two words is ideal, although three to four short words can also work if they create a memorable phrase.
Different. If your market research shows that everyone in your industry seems to have similar names or relies on similar elements, it can be helpful to avoid them in order to come up with a name that really stands out.
Writing a business plan helps validate and formalize your idea and can streamline the business-creation process by getting you to sit down and think things through methodically.
A classic quotation that’s especially applicable to the business plan process is, “Plans are worthless, but planning is everything.” Many entrepreneurs say they rarely look at their plan once they’ve launched—but they’ll also tell you there’s value in thinking through and researching your idea while creating a plan.
If you want to learn how to start a company, it’s critical you learn to write a business plan. The following video can help you get there.
The shared goal of any business is to make money, which means cash flow management is an integral part of learning how to start a business. You’ll need to understand some basics to get started and scale that knowledge as you grow.
There are plenty of businesses you can start with only a small startup cost, but others will require money for inventory, equipment, or physical space. A clear view of your total investment—before you spend a cent—is a must for helping to make important projections, like when you’ll break even.
You’ve done the legwork, and you understand the financials behind how to start a business. Now it’s time to dig deep into the product or service you’d like to offer.
For a product-driven business, developing your product could mean taking one of three general approaches:
Creating your own product. Whether you’re making items by hand, or sourcing an original product from a manufacturer, developing your own product to sell can help you stand out in the market.
Customizing an existing product. With print-on-demand options you can add your unique designs and ideas to products including t-shirts, leggings, towels, backpacks, and more.
Curating a selection of products. Dropshipping is a way to stock your store without creating a new product, letting you start selling almost immediately without managing inventory. For more information on Get tips for starting your dropshipping business.
Once you understand how to start up a business, look into what licenses and government regulations you need to operate legally. No one wants to end up in legal trouble. Your business is subject to the laws governing businesses in your area, as well as laws and regulations specific to your industry. For instance, a food service business needs to follow specific licensing and regulations for handling what it sells, but it also has to pay attention to the legalities of its marketing efforts and to trademark and copyright laws.
With so much to know, and a lot of it specific to your location and industry, it’s worth consulting with a lawyer to get advice before you launch your business. Investing time and money up front to obtain legal advice can save you from considerable headaches down the road.
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