10 Essential Steps To Follow When Starting Your Own Business

Don’t Miss These Steps When Starting Your Own Business

Starting your own business takes a lot more than dedication. It takes motivation, the ability to get up and dust yourself off when things don’t go well. It takes strength and a positive attitude to ride the hard times until you start seeing better results.

It’s not easy to launch a new company, even when people make it look simple. Statistics from the Small Business Administration Office in the United States says that as many as 80% of small businesses will make it through the first year.

However, the numbers begin to dwindle leaving only 50% making it to the 5-year mark. Out of all that, a staggering total of only 1 in 3 small businesses survive the first 10 years.

When it comes to South Africa, Businesstech reported a huge amount of small businesses to fail. The markets of SA are made up of an estimated 95% Small & Medium Enterprises or SMEs. However, a huge 70% of SMEs fail within the first 2 years of launching.

Why do so many small businesses fail?

With the stats as shocking as they are, there are reasons why small businesses fail. Before getting into what you should do before starting your own business, let’s check out what’s causing small businesses to fail.

1. There’s zero market research

To open up your business to a new venture, you have to make sure that you do your market research. Oftentimes, people don’t research the market. They’re so in love with their innovative new product that they neglect to find out if other people are equally enthused.

In terms of trending businesses and products, keep in mind that sometimes these lose popularity overnight and are no longer in demand.

2. Too little capital

Any business, no matter the size needs cash flow to operate. Without money, you will have to close your doors.

3. The wrong team

When you hire the right people, you elevate your business in many ways.

But when you hire staff that lack the required education levels, experience and skills it will prove to be a costly mistake.

It’s key to set standards before you hire people who can’t perform the job properly. Ensure that you explain the job functions and expectations before making someone an offer.

Your staff can make or break your business, so you want to hire individuals who are skilled, driven and committed to the company’s success.

4. Pricing confusion

Another challenge small business owners face is setting prices. Most companies price their products and services based on existing benchmarks or their competitor’s prices.

Even though you’re trying to generate positive cash flow, regular discounting and having sales can also hurt your business in the long run. For more on this, see this article here.

No matter the industry you are in, if your prices are too low, it makes it impossible to make a profit and your business will fail.

Similarly, if your prices are too high for the perceived value of the purchase, people will be reluctant to hand over their money.

If you’re going to charge a premium price, you must ensure that your customer has an excellent experience from start to finish.

The 10 steps that will help you thrive when starting your own business

1. Assess what you have to offer

As a business, you need to establish a brand and cultivate a good reputation in the marketplace.

If you’re just starting out and have no idea what business to run, you need to assess what you have to offer.

• What skills and expertise do you already have that will help? – Are you a natural when it comes to tech stuff? Can you manage a team?
• What do you enjoy most? – Do you love working with people? Do you have a knack for closing sales?
• Are you looking to live a certain lifestyle? – Are you wanting to dominate the market completely or just make enough money to no longer have to work for a boss?
• Do you feel ready to take on this challenge? – Are you ready to start a small business and give it 100% of your time, energy and dedication?

At the end of the day, not everyone is cut out to be a business owner. For more insights on the business owner mindset you need to have as an entrepreneur, read this blog.

2. Do you have a business idea?

All businesses MUST have a business idea. This is the foundation that will go on to shape your business with the years that follow.

Your business idea is a unique concept about what your business will be about such as:

• What will you supply your customers? (services, products, etc)
• Will your business solve the problems that the customer may have?
• Will your business be innovative or “forward-thinking”?
• Are you selling to people (B2C) or other businesses (B2B)?

3. Do you have enough start-up capital?

“To make money, you need to spend money”.

No business can run successfully without having enough funds. As we have already mentioned earlier in this post, many businesses fail because of a lack of funds.

If you don’t have enough money to start your business, here are some options you could consider:

• Check with your bank to see if you qualify for a business loan.
• Pitch your business idea to friends and family, maybe someone is willing to fund you.
• Share the costs in a partnership – there are always hungry investors looking to invest in businesses that show promise.
• If it suits your business model, you could try to get funding through Kickstarter or similar.

4. What’s happening in the market?

Before starting anything, you need to make sure that you have a good idea of what’s happening in the market.

Some questions you need to answer are:

• Who are your top competitors? – Can you outshine your competition by proving that your brand is a better option?
• Have you found that there is no competition? – Maybe there is a good reason nobody is doing what you’ve thought of as a business idea. This could be good for you… or really bad for you.
• Go further than online research. You need to speak with to the people you intend to sell to and confirm there is a viable market for your business.

5. What are the crowds saying?

At the end of the day, it’s not how passionate you are about your business that matters, it’s what your customers think.

Before going full throttle into launching your company, find your ideal customer and ask if you can do market research with them.

Find out from potential customers:

• Do they like the proposed product?
• What would it take or what changes are needed to make raving fans of your product?
• How much would they be willing to spend to have a solution to their problem?
• What do they need that no other company is currently giving them?
• What are your competitors (companies they currently buy from) doing right and what are they doing wrong? (this is priceless information that you can use to level-up your offering!)

6. Where will your business operate from?

Have you found a place for your business? Some people work from home. Working from home cuts the cost of having to spend money on rent and or other operating expenses that being stationed elsewhere calls for.

If you are looking for offices other than being at your home, then you can scout around for commercial properties that will suit your business needs. For example, a motor mechanic would need a workshop that can house a lift to hoist cars and enough space to work.

Many residential areas won’t tolerate the noise that comes with certain physical business operations.

Also, consider the following:

• Are your offices easily accessible? – Are you located near public transportation or in the central business district?
• Is there enough space for your customers to park and are their cars safe there? Same goes for delivery vans if you require deliveries.
• Is your competition insight? – Will you be located near to your competition as that could make things more challenging or it could guarantee a steady stream of customers to your door.
• If you have an online business, you will need a fast internet connection and good tech skills

7. Sort the legalities

Various rules, taxes and legislation apply to business and each will differ accordingly.

For example, the rules for sole ownership will differ to that of a partnership, limited liability, and corporation.

There are also employment rights you have to uphold if you hire staff.

Most importantly, find out about tax laws because you want to keep SARS happy when it comes to paying your taxes.

To make things interesting, if your company serves the global market or has branches overseas, you might have to comply with all applicable laws in those countries too.

Find a lawyer who specialises in business law to help you navigate these complicated waters.

8. Make it happen

Now that you’ve gotten this far, it’s time to launch your business. Growing your brand means staking your claim in the market and showing people why they should choose your offering over someone else’s.

Ensure that you have all your operational processes in place so that you can meet demand should things take off quicker than you expected.

Sometimes you need extra hands to help finish work or produce the products; this means that you’ll need to get some help from a team of staff.  Make sure that you have the finances to pay the staff under your employ.

9. Invest in marketing

Without marketing, chances are no one will know your business even exists. It’s essential to get the word out as much as you can.

Traditional marketing methods include:

• Print media (expensive!)
• TV (expensive!)
• Radio (expensive!)
• Banners (impossible to tell if these convert!)
• Flyers (mostly thrown away)

Modern marketing includes:

• Word of mouth (influencers are the new currency)
• Social media (affordable, massive reach and brand-building potential)
• Lead magnets
• Your website

Of course, the quickest way to market your business is with paid social media adverts. 

Unlike traditional marketing, digital marketing allows you to place ads in front of the people most likely to buy from you.

Remember you can still target age, gender, areas, interests and more when placing ads on social media. Targeting has never been easier or more profitable, and let’s face it you’re opening a business to make money.

Big Domino Marketing specialises in social media advertising, marketing strategies (funnels), email follow-up sequences and more. We run ads on Facebook, Instagram, Google and pretty much everywhere you want to be seen online.

Our mission is to showcase your business to the world and get you new leads (potential customers) so that you can make more sales.

We can even do your social media posting for you (because which business owner has the time to be on social media all day?!)

If you want more information, click here.

Above all marketing should be seen as an investment, not an expense.

10. Be willing to learn

No business is perfect and there are lots of challenges met along the way. Be willing to learn all the time and take tips from others. Network with people who can increase your knowledge and perhaps new opportunities will naturally come your way.

Keep yourself informed about what’s happening in the market and see what your competitors are getting up to.

What may have worked 5 years ago for someone else to operate their business successfully, may not work for you 5 years later.

Set yourself up for success by being willing to adapt and innovate.

The takeaway on starting your own business

Starting your own business is one of the most fulfilling projects you ever undertake. It’s risky though, so if you set the right groundwork from the start, it will go a long way to help your company survive the 10-year mark.

The beginning is never easy and you must work hard to transform your vision into reality.

Finding new customers and marketing your business will be the backbone of your success. This is one area that you must consider a priority.

Most importantly, don’t let fear stop you from being the successful entrepreneur that you’ve always dreamt of becoming.

Take action now

Join our FREE Facebook group: “Social Media Marketing for Entrepreneurs“, where we share tips, training and advice that we don’t share anywhere else.

Click here to join.

(NB: please answer the questions and agree to the group rules. This is to maintain the high standard of the group).