How to Start a Business: 8 Critical Steps to Success | Business Town

How to Start a Business: 8 Critical Steps to Success

You can succeed in starting a business even without any experience and with very little money. But you need to make really good decisions on a number of important issues. Here’s some quick advice on how you can make the very best choices on these critical issues.

1-Find an awesome business idea

A great business idea is going to make a difference in the success of your business. Yet many entrepreneurs go about choosing a business idea poorly and end up with either a bad business or a business that isn’t well suited for them. Often, they don’t even really choose a business idea. They kind of slowly move towards it without thinking hard about it and without seriously considering alternatives. Maybe they saw that a particular business had a lot of customers. Maybe they heard that a friend of a friend was making a lot of money in a business.

Instead, you should select a business idea carefully. First, you should put together a big list of business ideas that appeal to you. If you don’t start out with a big list of business ideas to consider, you are not going to end up with an awesome one.

Are there really lots of good business ideas that might work for you? Absolutely! And many ideas require little experience or money. I started over 12 successful businesses and most of them I began with under $2,000, usually in fields that I knew nothing about. One of these businesses I later sold for $40 million.

Next, you want to carefully evaluate your favorite business ideas and decide which is the very best one for you. You want to carefully consider factors such as the potential upside of the business, the inherent risk of the business and the suitability of the business for you.

Finding an awesome business idea will be a key element to making your business a big success, so give this process the time and effort it deserves.

For more on finding a business idea check out my course, Start-a-Business 101. In this course, I present hundreds of my favorite ideas. I also give you my 6-step process for finding the very best idea for you.

2-Develop a competitive advantage

Unfortunately, many entrepreneurs fail to truly make their business different from their competitors. They might survive, but often they end up competing on price, struggle to find customers, and suffer from low-profit margins.

It doesn’t have to be that way! A little bit of effort building a competitive advantage into your business will go a long way to making it successful.

Too many entrepreneurs try to compete head-on by being “better” than their competition. Or they simply think they will succeed by working harder and longer. That might work at school or in sports, but not in business. In business, you want to be different and avoid competing directly with the other players.

Competitive advantage has three key components. First, you want to choose a great target market that the existing players are not servicing well. For example, if all the existing restaurants in town serve dinner and lunch, then maybe you want to serve breakfast.

Then you want to “differentiate.” Instead of opening up a bicycle store for the mass market, maybe instead you open up a bicycle store that totally focuses on high-end bicycles for the serious enthusiast.

Finally, you need to clearly and quickly communicate to your audience your competitive advantage. This starts with developing a “Unique Selling Proposition.” A few keywords that convey the core value proposition in a memorable way. The most famous USP is perhaps Federal Express’ “Absolutely, positively overnight.”

Whatever size or type of business you are starting, creating your competitive advantage is extremely important.

For more on creating your competitive advantage, check out my course, Start-a-Business 101. I include an entire module on this critical topic.

3-Carefully create your business plan

A business plan is going to help you build a better business. Even a small, part-time business should have a business plan. If you don’t have a good business plan you will likely end up running your business in a haphazard, disorganized way.

A good business plan carefully evaluates all the key factors in your situation including the market, potential customers, the competition and your strengths and weaknesses. This process then leads to an optimal strategy for your business, along with a cohesive operating plan.

A good business plan should be the central road map of your business.

If you are starting a simple one-person business or for the first stages of planning a larger business, a one-page business plan is all that you need.

For more on creating your business plan check out my course, Start-a-Business 101. I will show you exactly how to create a one-page business plan. You will also get a sample plan and a fill-in-the-blanks template.

4-Develop compelling marketing

The big secret about marketing is that it is hard not just for new businesses, but also for existing businesses. If you try to pretend marketing isn’t hard and you decide you are going to pour all your resources into one unproven marketing direction, you could get into trouble really quickly.

So, what’s the solution? You want to try lots of very different types of marketing. And you want to spend as little money as possible on any one marketing campaign until it is proven to work.

Fortunately, there is a lot of marketing you can do for free.

You can build a simple, but effective, website for free. Then you can optimize it to make sure you show up in Google search results.

There are all kinds of exciting “guerilla marketing” you can do for almost no cost. Examples include posters, discount coupons and networking. They work – I’ve used them all.

You can also create your own ads for search engines or even ads on social media such as Facebook. If you can write one sentence, you can create a search engine ad. If you can upload a picture to the internet, you can create Facebook ads. The beauty about online ads is that you can test them for very little money. So, test everything – the ad copy, the offer and the audience – before you spend much money.

Marketing is too important, too finicky and too different for each business to just hire an outside expert. As the business founder, you need to develop at least a basic understanding of marketing. Then either do it all yourself or hire an expert in a particular expertise, such as search engine optimization.

For more on marketing, check out my course, Start-a-Business 101. This course is chock-full of free and low-cost marketing ideas that are perfect for a new business. I will show you how to create a marketing plan. I will give you my 50 favorite “guerilla” marketing techniques. I will walk you step-by-step through every aspect of digital marketing. And I will show you how to make sales presentations that will make your product or service irresistible.

5-Create financial statements and projections

Do you need to hire someone to do your accounting? No, you can almost certainly do it yourself. The key is to be organized. You need to record every single purchase and every single sale.

You also need to create financial statements and projections. But it’s easy to learn. The most basic financial statement is the income statement. It provides a summary of your revenue, your expenses and your resulting profit over a period of time. You should also create a balance sheet and make future financial projections.

For more see my course, Start-a-Business 101. I will show you how to create your financial statements and projections. And I will provide you with templates and samples.

6-Finance your business

There’s a lot of ways to finance a small business, even a startup. But especially with a startup, you are not going to get money from a traditional bank. You will need to consider alternatives.

You also need to be fully prepared before approaching any potential financing source, including being able to explain how much money you need, how you are going to pay the money back, and why your business is going to succeed. Your background and how you present yourself will also make a big difference.

For more check out my course, Start-a-Business 101. I give you every possible way to finance your business and I explain the ins and outs of each alternative. Plus I show you how to prepare for presentations to potential investors and lenders.

7-Find a great name

It drives me crazy to see business after business with a lousy name! Like anything else, if you give it serious thought and you get some expert advice, you can come up with a great name.

Lots of people make the mistake of naming a business after themselves. For example, “Bob’s Painters.” It just doesn’t sound very professional and it could lead to people avoiding your business.

Other names may not lead to people avoiding your business, but they may not help attract them either. For example, “Belmont House Cleaners.”

But a great name will help attract people to your business and serve as a built-in advertisement for years to come. For example, I like the name that a knitting shop near me chose: Knittin Kitten. This name immediately tells you what the business does. It makes it sound like fun. And it’s easy to remember.

For more, see my course, Start-a-Business 101. I show you the four types of commonly used names you absolutely must avoid. And I give you my 7-step process for finding the perfect name for your business – using techniques similar to those used by professional naming services.

8-Choose to learn

The more you learn about starting and running a business, the more likely you will succeed. And succeed in a big way.

I can tell you that hard work and perseverance can help. But they aren’t enough. You have to make great choices on key decisions along the way. Learning can make all the difference in making those choices.

It’s hard to find the time to learn. We all lead busy lives. But my course, Start-a-Business 101 can provide you a shortcut to learning what you need to know to start a business.

I have carefully included everything that really matters in starting a business. And it is all presented in a logical sequence. You won’t have to spend hours searching around for what you need to learn next.

I present the course material as efficiently and quickly as possible – in short, easy-to-follow videos.

And I include handy tools such as worksheets, templates, checklists, and samples that will save you a ton of time.

You can learn how to start a business in just 10 minutes a day with my course. If you just watch one video (typically 4 to 10 minutes) a day, you can complete the entire course in about 10 weeks.

With this course, you will quickly become a smart entrepreneur with solid knowledge in all areas of starting and running a business.

Click here for more information on my best-selling course, Start-a-Business 101.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.