Being your own boss sounds enticing. No more fixed schedules. No need to obey someone else’s commands or believe in their ideas and vision. You have all the power to drive the business in the desired direction. If you’re on this page, you’ve most likely made the decision to launch a venture.
That’s where things get tricky. You may be exploring various resources and watching videos trying to figure out how to actually get started and grow your store (or any other company you’re about to build).
This process is as inspiring as it is daunting. From dealing with the legalities of business structures and the nuances of financial planning to making your name widely known, being an entrepreneur is no mere feat. No wonder we have the following statistic:
In this article, we’ll introduce you to practical tips on launching your business. Here, you’ll learn how to define the target audience, what to keep in mind, and how others successfully make money as self-employed artists and store owners.
Step 1: Market Analysis: Finding Your Place
The first step in starting a small business is market research. Whether it’s an offline business like a cleaning business or an online venture like a cybersecurity business, research is essential.
Market research involves analyzing the landscape and setting the coordinates for your journey.
Identifying the Target Audience
Who are you selling to? It’s tempting to say “everyone”, but it doesn’t work like that. You need to narrow down your target markets.
Do they include busy professionals, craft enthusiasts, tech geeks, or maybe eco-conscious consumers? These people have different demands, habits, and preferences, so they won’t respond to your product in the same way.
Conduct surveys and interviews, analyze social media and forums, and create buyer personas. For deeper insights, you can even try holding one-on-one interviews.
Analyzing Competitors
Who’s already making money in this niche? What can you learn from them? How can you do it differently or better? Consider what’s working and, importantly, what’s not. Maybe competitors have overlooked a customer pain point or areas you can fill, solve, and innovate.
Here is how to do it right:
- Use competitor analysis tools (SEMrush or Ahrefs for competitor and keyword check).
- Sleuth rivals’ social media to monitor their engagement strategies and customer feedback.
- Look for customer reviews and forum discussions. Note any common complaints or praises.
- Do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.
Understanding Current Trends and Demands
While these things come and go, you need to factor them in when planning the business or product line. For example, if you’re in fashion, sustainability might be the wave to ride. In tech? Perhaps it’s AI or blockchain. There are some buzzwords that everyone will forget in a month.
Your task is to identify a lasting shift in consumer behavior and how it can be reflected in your vision, niche market, and business model. How? Follow industry news, leverage Google Trends, network at events, and never neglect customer feedback.
Identifying Gaps and Opportunities
That’s where you need to understand how the product fits the market. Do you fill the need that’s lacking in your local area? Or maybe the product innovates what has existed for a long time. It can be your unique selling proposition (USP) encouraging people to choose your brand over competitors.
Here is how to find one:
- Research the market through surveys, focus groups, and market analysis.
- Develop prototypes of your product or service and test them with a select group of target customers.
- Use the insights gained from competitor research.
- Regularly brainstorm new ideas that meet uncovered needs or improve on existing solutions.
Generating and Refining Online Business Ideas
The business idea should be more than just a passion project. That’s where the Hedgehog Concept comes into play. It implies that you should be at the intersection of three things:
- what the target customer wants;
- what you could potentially be the best in the world at;
- what you personally enjoy.
When you’ve found something that meets all the criteria, you can have a company that could really flourish.
Let’s assume you want to open a fitness studio because you’re passionate about health and wellness. You conduct research and communicate with potential customers. Suddenly, you discover that your target market wants not another fitness studio but a space combining physical fitness with mental wellness programs.
That’s where you need to focus on being of service rather than being selfish and pivot your initial idea to what the market needs.
Step 2: Business Structures and Legal Considerations
So, the next thing you need to determine is the business structure, such as:
- a limited liability company (LLC);
- sole proprietorship;
- a more complex organization.
This choice will affect your tax obligations, personal liability, and how you can raise funds. For example, if you want a small or medium-sized company, go with an LLC. Why? It offers personal liability protection, shielding your assets from business debts and legal issues.
For a more straightforward setup, choose a sole proprietorship. Note that here, you’re personally responsible for any business mishaps.
After that, you need to register the brand name. It’s a legal necessity that involves:
- checking the name uniqueness;
- making sure it doesn’t infringe on any trademarks;
- registering it with the relevant state office.
You also need to consider various business licenses and permits. For instance, you might need to deal with the federal government, state agencies, and local governments to get health permits for a restaurant or zoning permits for a brick-and-mortar business.
Research what’s required for your specific niche and location. Or consider partnering with a registered agent, which is also a legal obligation for LLCs and corporations.
This person handles important documents and government notices and keeps you compliant. They protect your name in lawsuits and defense against missing critical legal deadlines. Of course, you can be your own registered agent, but a professional service is much more efficient.
At last, let’s talk about an Employer Identification Number (EIN). You’ll need it to hire employees, open a business bank account, and, notably, file taxes. In short, it demonstrates you run the business above board. It’s like a social security number. It’s easy to obtain, thanks to the IRS’s relatively straightforward process, while being no less crucial than any other step in legitimizing a business.
Step 3: Financial Planning – The Backbone of Your Venture
Wow, financial planning, so we can finally proceed to income, right? Actually, it’s still too early to start dreaming about profits. Before that, you need to define your business model, which will affect everything from your marketing strategy to how you’ll structure the finances.
Suppose you’ve decided to sell custom wands rather than an online wand lore course. Great. What’s next?
Craft a business plan, including the following ideas:
- where you want to go;
- how you plan to get there;
- milestones;
- goals;
- market analysis;
- business model;
- marketing strategies;
- financial projections;
- startup costs;
- a break-even analysis (when your venture stops costing you money and begins making it);
- financial statements like a cash flow statement and earnings statement.
Speaking of business finances, you can stay organized by using a separate business bank account independent of your personal one. It’ll streamline money management. It helps track what comes in and what goes out without interfering with other stuff. This move also enhances your company’s credit, which can be crucial for getting access to funding.
Yes, you most likely need financial help at the onset. That’s where financing is essential, ranging from business loans and credit unions to alternative lenders for additional funding. Again, thoroughly research the pros and cons of each method, paying attention to interest rates and repayment terms.
When creating a financial plan, you may get too optimistic about your first orders and returns on investment. Set realistic SMART goals and moderate expectations. You will hardly make a million bucks in your first month if you’re selling handmade bookmarks.
Some things may contribute to a higher interest in your offerings, like being a popular beauty blogger on Instagram or having an active YouTube following. However, many creators still make mistakes and get disappointed with their launches. It’s okay. The key is not to give up. Use your financial projections to establish reasonable objectives, whether it’s sales figures, profit margins, or new products.
Step 4: Design and Brand Development
Another way to set yourself apart from the rest is to establish a visual brand identity with the help of various design elements, namely:
- logo;
- color scheme;
- typography;
- imagery.
Each of them should tell your story, make the brand stick in the customers’ memory, and create a narrative. If you possess design skills, it’ll be easier to craft these things, including marketing assets, packaging, and ads.
What’s more, there’s a wealth of inexpensive design tools and resources like Canva or Adobe Spark where you can design professionally-looking content.
Good designs establish an immediate connection with the audience and the business owner. Play with your design elements to produce the desired effect. Keep your shoppers in mind during this process. What do they prefer and expect?
A sleek, minimalistic look is suitable for tech-savvy consumers, while warm, earthy tones work well for eco-conscious potential customers.
Note: Your design is an intellectual property. To protect it from being used by others, you can use copyrights, trademarks, and patents to secure your business entity.
Step 5: Product Development – From Concept to Market
At this stage, a vague idea transforms into a tangible item on the shelf or an online store. Some business owners spend too much time here seeking to present an elaborate or fully developed product to the public. Don’t do that.
All you need is to assemble a Minimum Viable Product (MVP). It’s something valuable, a sketch of your future product, that you share for free or at a low cost.
- analyze potential customers and their interest in you;
- avoid a significant upfront investment;
- engage the audience;
- gather data;
- inform future product development or marketing strategies.
You can then use the insights from your MVP to fine-tune the final product before finally going to market.
Step 6: Setting Up for Sales
Where do you want to sell goods? Do you want to enjoy the comfort of a home-based business and eCommerce? Or maybe you lean towards an offline experience provided by a brick-and-mortar business. Or why pick one when you can have both?
If you plan to operate an online storefront, pick the right eCommerce platform. Suppose you settled on Shopify. While it’s very beginner-friendly, you may need the assistance of Shopify experts to set up, customize, and scale the eCommerce website.
There are many other eCommerce platforms, such as Wix, Squarespace, and BigCommerce. They differ in terms of functionality, design templates, and user experience.
What you should ensure is an easy-to-navigate eCommerce website that reflects your visual brand identity. A cluttered and confusing store diverts potential customers, just like a mess on physical shelves. There is also a high chance that you will need to optimize UX after developing the website.
Step 7: Marketing Mastery – Spreading the Word
Now, you need to promote the brand with an effective marketing strategy. One of the most effective ways to do it is to devise a robust content strategy (blog posts, Instagram stories, YouTube tutorials).
Solve real problems, showcase behind-the-scenes magic, and educate followers. Make sure every piece of content adds value and builds a deeper connection with followers.
You can leverage several channels to connect with potential customers, such as:
- Search engine optimization. Improve website rankings by posting authoritative, relevant content, using appropriate keywords, and accelerating website speed, usability, and other technicalities.
- Social media. Attract people to your social media accounts and encourage them to subscribe. Tell stories, leave witty tweets, and shoot engaging videos; don’t just sell. Be consistent and authentic, and make people part of your brand’s journey.
- Email marketing. Share exclusive offers, sneak peeks, and valuable content in exchange for subscribing to your email newsletter. Nurture the email list carefully, and don’t bombard prospects with sales pitch after sales pitch.
- Retargeting campaigns are ads that appear on third-party websites after visitors visit an online store and view some pages. They remind people of their desired goods, abandoned carts, and incomplete orders, allowing products to stay in shoppers’ minds.
To establish your identity in marketing, leverage personal stories:
- your unique journey;
- the “why” behind the brand;
- the values you stand for.
These can be powerful tools for building a loyal customer base. Once customers become loyal to your brand, the next step is to retain them. Consider rewarding your loyal customers with incentives, which could be monetary or in the form of other rewards, such as personalized Prints4sure Artistic Canvas Prints. These rewards make a lasting impression.
Step 8: Scaling Your Business
You need to consider this step when the business has already made some profit. But let’s elaborate on how to expand it now so you know what to prepare for.
Scaling involves developing in multiple directions: new products, markets, and, potentially, locations.
Leveraging Expert Advice
This expansion frequently calls for advice from seasoned experts and forming strategic partnerships and collaborations. Find those who have been through similar situations previously, such as business coaches.
Here are a few examples of books that offer valuable insights:
- $100M Offers: How To Make Offers So Good People Feel Stupid Saying No by Alex Hormozi;
- Dotcom Secrets: The Underground Playbook for Growing Your Company Online with Sales Funnels by Russell Brunson;
- Oversubscribed: How to Get People Lining Up to Do Business with You by Daniel Priestley.
There, experts and entrepreneurs share tips on crafting compelling offers, understanding the digital market, and creating demand for your products. These resources highlight how crucial it is to draw clients and do so in a way that makes your company irresistible.
Partnering with well-known influencers or complementary brands may attract new shoppers you might not have reached alone. But take into account that you need to respond to the needs of the evolving audience.
Say you want a product in neon green. If your customers are clamoring for pastel pink, guess what? It’s time to pivot. This iterative process of shaping the product to meet market demands is essential for longevity.
Consider the Types of Business Insurance
As you plan to grow, include different types of business insurance and liability on your list, as such:
- Professional liability insurance to protect you from claims of negligence or harm from your products or services.
- Property damage insurance to cover you in case of damaging physical assets.
- Employee health insurance (applicable if you manage a team).
Step 9: Choosing a Pricing Strategy
Now, it’s time to elaborate on pricing a little bit. You shouldn’t pick numbers out of thin air. You should figure out how much to charge to justify marketing efforts, pay yourself a decent salary, and allocate a budget for business development.
Cost calculation should incorporate various expenses, such as:
- the cost of materials and labor;
- subscriptions, rent, utilities, and other operation costs;
- website maintenance;
- shipping;
- equipment upgrades, and more.
Sum them up and decide on the best option to stay in the black. There are several ways to price products, known as pricing models:
- cost-plus pricing, where you raise prices via a mark-up;
- value-based pricing, where the price is based on how much a customer believes the product is worth;
- competitive pricing–setting your prices according to what competitors are charging.
Let’s not forget about discounts and promotions. They can accelerate sales, but don’t overdo it, as this can affect your profits. Limited-time offers or discounts on eligible purchases for first-time customers work well.
Measure the impact of these promotions on the bottom line. Are they bringing in new purchasers? Are existing clients buying more?
Case Studies and Success Stories: Learning from Others
Throughout this article, we’ve been giving advice on starting a successful business. Whether you’re a popular beauty blogger, a virtual assistant, or a home-based business owner selling art, there is a lot to learn. The most effective way to do it is, of course, from your own mistakes. But let’s minimize them as much as possible by looking at some real-life examples of other entrepreneurs.
The first one is Tammy Dinh, a self-employed artist who makes at least $ 8,000 a month. How did she accomplish that, and what could you take away from her personal story?
- Being an artist was her passion.
- She leverages diverse income streams (online storefront, YouTube AdSense, Instagram Reels bonuses, and brand deals).
- She saves a portion of her earnings for taxes and managing business expenses.
- The artist opened a separate business bank account for more accessible tax filing and keeping the business above board.
- She emphasizes the value of research and possibly consulting with financial experts or CPAs.
Takeaways:
- Find what makes your heart beat faster.
- Create a stable financial foundation with income diversification.
- Be willing to learn from failures, adapt strategies, and persistently work towards your vision.
The next video is from Johanna Park, sharing ideas on starting a small business based on her findings. Here are some of her tips worth noting:
- Starting with ideation: Johanna spent too much time thinking about a future project rather than acting. It turned into a form of procrastination.
- Investing in professional tools: She bought an iPad Pro, Apple Pencil, and Procreate. She advises to work in solitude to maintain focus and reduce pressure.
- Setting a hard deadline: Concrete goals with specific timelines, like business tax deadlines and others, can propel oneself into action.
- Launch and reflection: Although Johanna received many orders, she expected more. This fact made her reassess her strategies, including offering cheaper shipping options and expanding her product line.
- Growth and adaptation: Johanna continued to grow her business using a content calendar for consistency. She also chose YouTube over Instagram as her primary platform for long-term sustainability. The entrepreneur recommends detaching yourself from the immediate outcomes of the work to zero in on long-term progress.
In Closing: From Creating a Business Plan to Getting Business Licenses
9 out of 10 startups could fail, but don’t let those statistics discourage you. Whether you’re starting a call center business or a portable hand sanitizer brand, dedication, adaptability, and a willingness to do the heavy lifting can lead to success.
This article shared nine steps to starting a small business. You also saw two examples of online entrepreneurs who have managed to start small businesses successfully. Hopefully, the guide has shed some light on what you need to do to get your venture up and running. Good luck.
