Without a doubt, building a small business is a hard work, but fortunately it can be done by anyone with a great idea, a strong work ethic, and sufficient resources. To set up a business, you have to think of a business concept, develop a business plan, understand financial issues, and last but not least, marketing and launch.
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Part 1 of 6: Building the Foundation
Step 1. Set your goal
Do you want financial freedom, for example later selling your business to the highest bidder? Do you want a small, sustainable business, one you love and a steady source of income for? All of this should be known from the start.
Step 2. Generate an idea
A business idea can be a product you've always wanted to create, or a service you believe people need. An idea can also be something that people haven't realized is a need because it hasn't been created yet!
- It would be nice if you have casual discussions with intelligent and creative people to come up with ideas. Start with simple questions like “What are we going to do?” The goal is not to create a business plan, but to generate potential ideas. Many of the ideas that come up may not work, and some are mundane, but there will be small ideas that emerge with real potential.
- Consider your talents, experience and knowledge when choosing a concept. If you have a particular talent or skill, think about how it can be applied to meet market demand. Combining skills and knowledge with market demand will increase your chances of generating a successful business idea.
- For example, you have worked as an employee in an electronics company for many years. Perhaps you have noticed the public's demand for a certain type of electronic device. The combination of experience with market demand will allow you to attract customers.
Step 3. Create a temporary name
This step can even be done before you have a business idea, and if the name is a good one, it might even help you find a business idea. As plans progress, and as aspects begin to take shape, the perfect name will emerge, but don't let name problems hold you back in the early stages. Come up with a name that you can use as you develop your plan and feel free to change it later.
- Before choosing a name, don't forget to check if the name is already in use by someone else. Try to come up with a name that is simple and easy to remember.
- Think of a popular brand name like "Apple". This name is easy to remember, simple, and easy to pronounce.
Step 4. Form your team
Will you be running the business alone, or will you invite a trusted friend or two to join you? Teams will present a lot of synergy because people tend to exchange ideas. Two people who work together can usually produce something greater than the accumulation of two people who work separately.
- Think of some of the greatest success stories, such as John Lennon and Paul McCartney, Bill Gates and Paul Allen, Steve Jobs and Steve Wozniak, and Larry Page and Sergey Brin. In each of the partners' stories, each brings out the best in himself.
- Think about other areas that you are weak at, or that you are not very familiar with. Finding a partner that matches your personality, who will add to your knowledge or fill a skill gap is a great step towards ensuring your business has the resources it needs to succeed.
Step 5. Choose business partners wisely
Be careful when choosing the people you will partner with to build your business. Even if that person is your best friend, that doesn't mean you can establish a good partnership with them in your business operations. Start your business with reliable people. Some things to consider when choosing partners in leadership and support team positions include:
- Does he complement your weaknesses? Or, do you both just offer the same skill set? If the answer is the second, be careful, there could be too many people doing the same job while other tasks are not handled.
- Do you and your partner agree on the bigger picture? Debates about details are bound to happen, and they are necessary in order to get the best results. However, not agreeing on the bigger picture, which is the true purpose of your business, can lead to disputes that may be irreversible. Make sure your team also cares and believes in your business vision.
- When interviewing potential partners or employees, learn to identify the true talent behind a diploma, degree, or lack thereof. One's field of education is not necessarily the area of his main talent. For example, let's say a candidate has a background in accounting, but his experience and your assessment suggest he is a better fit to help with marketing.
Part 2 of 6: Drawing up a Business Plan
Step 1. Develop a business plan
A business plan helps you determine what you need to start building a business, large or small. A business plan summarizes your understanding of the business in a single document. Business plan It also provides a map for investors, bankers, and other interested parties to use when deciding how best to help you, as well as helping them decide whether your business is viable or not. A business plan should include the elements outlined in the steps below.
Step 2. Write a description of your business
Describe your business more specifically, and how it fits in the market in general. If your business is a corporation, limited liability company, or sole proprietorship, state that and why you chose it. Describe your product, its key features, and why people would want it. Answer the following questions:
- Who are your potential customers? Once you know who your customers are and what they want, develop a marketing strategy.
- What price are they willing to pay for your product or service? Why did they choose your product or service over competitors?
- Who are your competitors? Perform competitive analysis to identify key competitors. Find out who did something similar to what you had planned, and how they came to be successful. Knowing their failures is equally important, and what made their efforts fall.
Step 3. Develop an operational plan
An operational plan describes how you produce or deliver your product or service and all costs.
- How do you create a product? Are you offering a service, or if it's more complex-software, a physical product like a toy or a toaster-how do you make it? Describe the process, from raw material supply, assembly, to finishing, packaging, storage and shipping. Will you need additional people? Will there be any unions involved? All this must be considered carefully.
- Who will lead, and who will be led? Define your organization, from receptionist to CEO, and what role do they play both functionally and financially? Knowing the organizational structure will be able to help you plan your business operating costs, and estimate how much capital you will need to operate effectively.
- Seek feedback. Friends and family are good sources for feedback. Feel free to make them an "advisory board".
- The need to add land and buildings. This happens more often than expected. Once stock starts to pile up, you might start using your living room, bedroom, and backyard shed as storage. Consider renting land or storage space if needed.
Step 4. Develop a marketing plan
An operational plan describes how you manufacture your product, and a marketing plan describes how you sell your product. When developing a marketing plan, try to answer the question “how” are you going to make the product known to potential customers?
- You need to include the type of marketing that will be used. For example, will you be using radio ads, social media, promotions, billboards, attending networking events, or all of that?
- You also need to define a marketing message. In other words, what would you say to convince customers to choose your product? Here, you need to focus on the Unique Selling Point which is also known by the acronym USP. The USP is the unique advantage your product has for solving customer problems. For example, you might offer lower prices, faster, or higher quality than competitors.
Step 5. Create a pricing model
Start by studying competitors. Find out how much they charge for similar products. Can you add something (added value) to make your product different and make the price more attractive?
Competition is not just about goods or services. Competition is also about your social and environmental credibility. Customers have a growing awareness of the need to demonstrate that your business sympathizes with labor conditions and does not harm the environment. Certificates of endorsement from reputable organizations, such as labels and stars, can reassure customers that your product or service is more in line with their norms than uncertified products or services
Step 6. Take care of financial matters
Financial information translates your operational and marketing plans into profit-numbers and cash flows. It identifies how much money you need and how much you can earn. Because finances are the most dynamic part of your plan, and perhaps the most important for long-term stability, you should update your financial statements monthly for the first year, quarterly for the second year, and annually thereafter.
- Describe the initial cost. How do you finance the establishment of your business? Some of the options are banks, financiers, investors, small and medium business support programs, personal savings. You have to be realistic when starting a business. You probably won't be able to get your money back in the first month, so you'll need to have enough funds to cover a lot of things until the income actually flows. One sure way to fail is not having enough capital to operate the business.
- How much do you charge to sell your product or service? How much does it cost to produce? Make a rough estimate of net profit, factoring in fixed costs such as rent, energy, employees, etc.
Step 7. Prepare an executive summary
The first part of the business plan is the executive summary. Once you've developed the other sections, describe the overall business concept, how it will be profitable, how much funding will be needed, where it stands now, including the legal position, the people involved and a brief history, and all the aspects that make your business look like it superior proposition.
Step 8. Create your product or develop your service
Once you have a basic business plan, funds, and staff, move on. The development process is a preparatory period for going to the market, during which time you may be discussing with engineers and developing and testing software, procuring raw materials and shipping them to a factory (or workshop), or buying goods wholesale to resell at wholesalers. higher price. In the process, you may come across things like the following:
Need to adapt ideas. Perhaps the product should be made in a different color, texture or size. Perhaps your service should be made wider, narrower, or more detailed. It's time to tackle everything that comes up during the testing and development phase. You will know automatically when something needs to be adjusted so that what you offer is better or not as obsolete as what competitors are offering
Part 3 of 6: Managing Finances
Step 1. Meet initial costs
Most businesses need capital to start. Capital that is usually required is money to buy supplies and equipment, as well as to run business operations during the period before making a profit. The first place to look for funds is yourself..
- Do you have investments or savings? If so, consider taking some to fund your business. You should not invest all of your savings into the business because there is a risk of failure. Also, you shouldn't invest money set aside for emergencies (experts recommend three to six months of income set aside for this purpose), or money you need over the next few years for various obligations.
- Consider getting a bank loan with a home guarantee. If you have a home, a bank loan with a home guarantee is a wise idea, because loans are usually easy to approve (because your home is the collateral), and interest rates are relatively lower.
- If you have retirement savings at your current employer, consider borrowing it. Usually you can borrow these funds at a percentage that is in accordance with company policy.
- Consider saving before starting a business. If you have a job, save some of your monthly salary over a period of time to fund the costs of starting a business.
- Visit the bank for information about loans for small businesses or some form of credit. Make sure you visit several banks to get the best interest rates.
Step 2. Manage operating costs
Monitor business operating costs and try to keep them in line with your projections. Whenever you see something wasted-such as electricity, telephone credit, office supplies, product packaging-observe and estimate how much is really needed, then minimize or eliminate those costs as much as you can. Find savings tricks early in the business, including renting items instead of buying them and using prepaid services to keep phone costs under control.
Step 3. Prepare funds more than the minimum number
Let's say you determine the need for IDR 500 million to start a business. Good! You earn IDR 500 million, then buy a table, printer and raw materials. Then the second month comes, you're still in production, the rent has to be paid, your employees want to be paid, and all the bills pop up. When this happens, there may be no other way but to give up and stop. So if you can, prepare savings for a year without income.
Step 4. Spend money wisely
Minimize the purchase of office supplies and additional expenses when in the early phase of the business. You don't need an awesome office, the latest office chairs and expensive paintings on the walls. A small space in your home will suffice if you can direct clients to meet at a local coffee shop (welcome them in the lobby). Many people who start businesses fail because they buy expensive equipment instead of using the money to focus on the business.
Step 5. Decide how to receive payments
There is something you have to take care of in order to receive payment from a client or customer. You can use Square, which is great for small businesses because it doesn't require a lengthy process and costs minimal. However, if you're not comfortable with paying using technology, you might consider a more traditional merchant account.
- A merchant account is a contract between a businessman and a bank, in which the bank opens a line of credit for sellers who want to receive payments from transactions with certain credit cards. Previously, without such contracts, businesses could not accept payments from major credit cards. However, Square has changed that, so don't feel trapped or limited by this choice. Learn what your options are.
- Square is a card swipe device that connects to a smartphone or tablet and turns it into a sort of cash register. You've probably seen a device like this at businesses you frequent, as they're now common in coffee shops, restaurants, cafes, and other businesses (look for a postage stamp-sized plastic rectangle that plugs into your tablet or phone).
- Note that Paypal, Intuit, and Amazon offer similar solutions. Make sure you study all the options before choosing one.
- If you run an online business, services like PayPal offer a convenient way to accept payments and transfer money.
Part 4 of 6: Taking Care of Legality
Step 1. Consider hiring a lawyer or other legal consultant
Many hurdles will come your way as you embark on the transition from a hardworking employee to a very hard working, low-income business owner. Some of these obstacles are documents with rules and articles, ranging from building agreements to city planning rules, permits from city and provincial governments, taxes, fees, contracts, shares, partnerships, and much more. If there is someone you can turn to when the need arises, not only will your mind be at ease, but you will also have the resources necessary to help plan for success.
Choose a legal consultant who suits you and who shows that he or she understands your business. You also need someone with experience in this area, as an inexperienced legal consultant can get you into legal trouble, even fines and jail time
Step 2. Find an accountant
You need someone who can agilely handle your finances, even if you think you can handle the books yourself, you still need someone who understands tax calculations. Taxes for businesses can be very complex, so you need (at least) one tax consultant. Again, the accountant should be someone you can trust, regardless of the amount of money he or she has to deal with.
Step 3. Create a business entity
You need to decide what type of business entity you want to be, both to tax and (hopefully someday) to attract investors. You resolve this when you have decided whether you need money from others in the form of a loan and with advice from legal consultants and accountants. This is one of the last steps before actually spending money or asking for a loan from another party. Most people are familiar with corporations, limited liability companies, and so on, but just like most small business owners, you will need to form one of the following business entities:
- Sole proprietorship, if you run (excluding employees) your own business or with your spouse.
- General partnership, if you do business with a partner.
- A limited partnership, consisting of a few general partners who are responsible for all business matters, and a limited number of partners who are responsible for the amount they invest in the business. Everyone gets a share of the profits and losses.
- Limited liability partnership, no partner is responsible for the negligence of the other partner.
Part 5 of 6: Marketing a Business
Step 1. Have your own website
If you sell online, complete your e-commerce business and build a website, or have someone else build one for you. The website is your store, so whatever you can do to make people want to come, and want to linger, do it.
- Or, if your business orientation is more of a "personal" experience, traditional marketing may be just as important. For example, if you're starting a gardening business, focus on getting the word out to your neighbors before building a website.
- When creating a website, remember that simplicity and clarity are key. The most effective designs are simple designs that clearly state what you do, how you do it, and how much you charge. Emphasize why your business is the best solution to a client's problem.
Step 2. Hire a professional designer
If you decide to have a website, make sure it looks professional. Hiring a designer may cost more at first, but a well-presented and trusted site is more important. The website should look professional and easy to navigate. If money transactions are involved on that site, invest in providing security encryption and ensuring that the company that will serve your money transfer is trustworthy and reliable.
Step 3. Awaken your inner publicist
Maybe you really believe in the quality of your products and services, but in order to be successful, other people must also believe. If you're a newbie to advertising and marketing, or you don't like offering sales, now is the time to get over those feelings and develop the personality of a publicist. You need to design a short, compelling offer to convince potential customers that they need your product or service, an offer that must reflect the value, purpose and potential of what your business offers. Write your offer in a variety of ways until you're happy to tell everything and then you can tell everyone. Then practice as hard as you can!
It's a good idea to print attention-grabbing business cards, depending on what your business is
Step 4. Take time to be active on social media
You can do this before the business is ready to build anticipation. Use Facebook, Google+, Twitter, and other social media to generate interest and spread the word about your business. You need to create buzz to get people to start following you. Create a business account for your business, and use a separate account for your personal one. Messages you send from the two accounts must be designed differently, depending on which account you're sending them from.
Step 5. Implement a marketing and distribution plan
With a production process in progress or a service concept under development, and realistic expectations about when the product or service will be ready for sale, start marketing it.
- If you advertise regularly, the advertising medium needs a copy or image of the ad at least 2 months before publishing.
- If you're selling through a store, sell by ordering in advance, and set up shelves to place products. If you intend to sell via the internet, make sure your e-commerce site is ready to serve buyers.
- If you offer services, advertise in appropriate and professional media, be it journals, newspapers, or online media.
Part 6 of 6: Launching a Business
Step 1. Prepare the room
If you need a room that is bigger than an empty garage or bedroom, for office or warehouse purposes, this is the right time to look for it.
- If you don't need an office outside your home, but sometimes need a location for meetings, there are certain locations in town that can meet that need. Just search for "rent a space for a business meeting in [your city]" via Google, and you'll find plenty of rental options.
- Make sure you contact the city hall to find out the business laws in the area. Some types of small businesses are not allowed to be run outside the home, so you must ensure that your business operates within the allowed zones.
Step 2. Launch your product or service
Once your product is manufactured, packaged, coded, available online, and ready for sale, or once your service is developed and ready to be offered, host a special event to launch your business. Send out press releases, announce them to the world. Announce the existence of your business via Twitter and Facebook, let the echo of voices heard to all your target market, that you have a new business!
Throw parties and invite people to share the news about your business. The party doesn't have to be fancy, take advantage of discounts to buy food and drinks at the supermarket and ask family and friends to help with catering (you can reward them with products or services)
Tips
- Always provide value and service to people who have the potential to become your customers, even if they aren't currently. When the time comes for them to need your product, of course you want your name to be the first one they remember.
- With the internet, online business is the easiest and cheapest way to start a business, and certainly cheaper in startup costs when compared to physical stores.
- Keep learning and adapting to change. Find partners, mentors, local business organizations, internet forums, and wikis to discuss the daily details of small business. It's much easier for everyone to run a business well and profitably if they don't spend time and energy revolutionizing the way they do business.
- Most direct selling companies require lower start-up capital than traditional businesses. You can also return your capital faster than traditional business models.
- You could also consider trading on eBay or Overstock.
- You can start with one or two products and then add more great ideas as you go along.
- Don't be afraid to experiment with prices. You have to set a minimum price for your product or service in order to get a return on your investment, but experiment with low prices or premium price variations.
- Believe in yourself even when income starts to decline or finances run low.
Warning
- Be careful of people asking for money before buying or hiring your services. Trading promises prosperity through reciprocal profits, so customers should be willing to pay for your hard work. A franchise store or business selling from home may require a legitimate start-up fee, but it should be a reasonable fee to allow you to get into the business so that the manager makes money as you are successful, not just involving you.
- Watch out for business offers that appear to be offering "something for free." This kind of business may take something from someone, usually you as a target. There are so many variations, some more subtle than others. Examples are pyramid schemes and scams that ask for money upfront.
