Starting a business involves planning, research and development, gaining legal knowledge and acquiring knowledge of several business operations.
Turning an idea into a business is strenuous if one does not know which step to take first. So, instead of wasting time in trial-and-error methods, new entrepreneurs can follow a few steps to start their businesses.
How to Start a Business?
Refine the Idea and Concept
The first step to starting a business is formulating a business idea, but for that, entrepreneurs must have an idea about the market they want to enter. Also, if unable to formulate a business idea, businesses can implement strategies such as:
- Find Out a Business Idea That Seems Interesting: Budding entrepreneurs can research products or services related to their interests that would solve a market need.
- Identify Gaps in the Market: One can also research existing products available in the market. Identify the common problems and complaints customers face and work on resolving such issues.
- Capitalise on Recent Market Trends: In recent times on social media, entrepreneurs can notice several products gaining immense popularity. Such ideas can be a great opportunity for one to start a new-age online business.
Create a Business Plan
A business plan helps to define the structure and outline of a business, operations, products or services, and growth potential. A well-written business plan should include:
- Statement of Purpose: The statement of purpose or mission statement should summarise the products, market and business operation.
- Product descriptions: A detailed explanation of every product or service one will be offering. Also, how it will fulfil the needs and benefit the customers.
- Market Analysis: Details of the target demographic, customer expectations and selling trends of the business. It will help prospective business owners to manage their operations.
- Competitor Analysis: Information relating to competitors in the market with similar products and services. Highlights of their strengths, weaknesses and threats. Also, it must mention how the business stands out from the rest.
- Revenue Model: A detailed drawing of a solid revenue model that would generate regular and steady income for the business. It is an integral part of creating a steady business for the long term.
Before starting a business, a business needs to make sure that it has a viable revenue stream. However, other than figuring out the revenue stream, business finances also involve looking into funding arrangements, pricing, break-even analysis, working capital needs, and profit and loss analysis.
- Funding Arrangements: Venture capitalists and investment firms provide finances to businesses in need. Usually, investors help businesses with finance in exchange for stakes or shares.
- Pricing: In this process, the businesses fix the value they will receive in exchange for their services or goods.
- Break-Even Analysis: Business owners use this analysis to determine the period after which it will become profitable.
The formula to determine the break-even point is:
Break-Even Point= Fixed Costs ÷ (Average Price Per Unit – Variable Costs)
- Working Capital Needs: Working capital helps businesses to operate on a day-to-day basis. It enables businesses to meet their short-term and current obligations.
- Profit and Loss Analysis: Profit and loss analysis helps to determine the profitability of businesses. It enables businesses to assess their finances for the future.
Choose the Legal Business Structure
- Sole Proprietorship: If a prospect owns a business independently and plans to be responsible for all debts and obligations, one can apply for a sole proprietorship registration.
- Partnership: If two or more persons are held liable for the ownership of a business, it is called a partnership business. All the partners of a business share the responsibilities and liabilities of a business.
- Corporation: There are two types of corporations including an S corporation and a C corporation. Each type of corporation has its different sets of regulations.
- Limited Liability Company: An LLC provides legal protections for a corporation while allowing the tax benefits of a partnership. It is one of the most common structures of businesses.
Register with the Government
After obtaining the legal status of the business, entrepreneurs need business licenses before they can legally operate their business. There are several other documents one needs before registering:
- Trademark Registration
- Articles of Incorporation and Operating Agreements
- Company PAN Card
- GST Forms
- Local Licences and Permits
Purchase an Insurance Policy
Business insurance comes in handy in case of any property damage, theft or even a customer lawsuit. Manufacturing businesses can purchase general liability insurance. It covers property damage, bodily injury, and personal injury. However, in the case of a services-based business, one needs professional liability insurance. It will cover all operational wrongdoings or negligence.
Build a Resourceful Team
Budding entrepreneurs must identify the gaps that exist within their businesses and recruit the correct personalities to fill those gaps.
Choose Vendors Carefully
Businesses need third-party vendors to run their operations smoothly. Several specialised HRMS, FMS or business phone systems vendors will ease out the overwhelming task.
Market and Advertise the Brand
- Create a company website to establish the brand.
- Create social media accounts to advertise the brand name.
- Use a customer relationship management system to store customer data and improve the company’s marketing strategy.
- Design an easily identifiable logo.
To grow a business the most important thing is to have a continuous revenue stream. However, growth is something that does not come in a short period. Owners need to nurture their business to receive the results in the future.
How Does RazorpayX Help in Starting a Business?
RazorpayX is a business banking platform that supercharges the financial operations of a company. Integrating it can be helpful while starting a business since this banking suite makes a plethora of services accessible through one dashboard.
One of the most important features of this banking suite is the current account. It helps business owners to manage their money, expenses and bills better.
Other than that, RazorpayX-automated vendor payment service is a great feature that helps in adding invoices and tracking vendor payments easily. It will help you streamline all your due payments for your newly launched business.
How to start a business with no money?
To obtain money to start a business of your own one can crowdfund, take loans from friends and family or bring in investors.
What are the 4 basics of starting a business?
To start a business, entrepreneurs need to have an ownership structure, a business registration certificate, a legal licence and a source of funding.
What makes a successful business?
To become successful a business must meet the needs and wants of customers. Also, it needs to understand the gap in the market.
How to attract new customers for a business?
To attract new customers, ask for referrals, create a network, offer discounts, partner with other companies and use digital marketing techniques.