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How to Start Your Own Business?

Start your own business

So you want to start your own business, fantastic! Be ready for a journey of a lifetime. Also, make sure you have selected the right business idea and you are up to the challenge.

Starting your own business is not for the faint of heart. Moreover, it is also a mind set. In fact, you need to be committed and be willing to work hard.

When I started my first company and while I was raising my first round of financing, I remember the Venture Capital guys asking me, “Hey Joseph. are you a pig or a chicken?”

I was confused on why they were asking that question, and so I asked them what did they mean by that? Their response changed my perspective towards running a business. They said that the Chicken is dedicated. She lays an egg everyday for us to eat. But, on the other hand, the pig is committed because he is all in. He is the meal! In short, they wanted a pig and not a chicken. They want you to be committed!

So, are you a Pig or a Chicken?

There are 10 things you need to do when you start your own business. They are:

1- You the Entrepreneur.

2- Your Business Idea.

3- Find your team.

4- Develop your Marketing Strategy.

5- Build your Pricing Strategy.

6- Prepare your Selling Strategy.

7- Develop your social media strategy.

8- Finance your business.

9- Prepare your Business Plan.

10- Company’s legal needs.

Let us talk about each of these parts in details.

You the Entrepreneur

The very first thing that you need to understand to start your own business is that you are the entrepreneur. Look in the mirror and make sure the person you see in there will not let you down. Moreover, you should know that when you are starting your own business, you are the business. Which is also why starting your own business is a lot of hard work. But you can do it, if you follow the right steps. To help you start, here are 8 things you need to think about. You should be:
1- Flexible: You need to be open-minded, flexible, and adaptable to customer and market conditions.
2- Positive: You have to be positive and stay positive. Moreover, you should surround yourself with positive people.
3- Tenacious: Don’t take no for an answer. In short, stay focused.
4- Team Player: You need smart people around you that can debate an idea and make it better. So, give your team a chance by listening to them before you make the final decision.
5- Able to Control your Ego: Egos are the killers of businesses and the creators of wars. Hence, it is important for you to always control your ego.
6- A motivator and cheerleader: You will need it to keep your team focused and productive.
7- Insightful and selfless: Your business comes first, not you, not your hurt feelings or your ego.
8- Energetic: Eat healthy and have a good night sleep. Moreover, exercise regularly to always stay energetic.

To know more about how you can be a great entrepreneur, you can also refer to my post on Personality Traits of a Successful Entrepreneur. I have also left you a link at the bottom of this post.

Your Business Idea

Next, you need to focus on your business idea. There are many fantastic money making ideas and they are everywhere. Nevertheless, your idea does not have to be original. If you find an original idea, then it is great. And if not, you can then find an idea that exists and make it better.

Once you find your idea, you need to answer the following 4 questions:

1- Is your business idea a service or is it a product?

It could be both. However, I recommend that you choose one. This would help you focus better.

2- Is your product or service adding value to your customer?

You need to ensure that you service or product is offering a solution that people want and willing to buy.

3- Does your business idea have a sufficient customer base?

You would need to do your market research to understand the market demand for your product or service. And determine if the demand is sufficient to justify your investment in terms of time and money. In other words you need a large enough of a market to generate enough sales to make your business viable.

4- How will your service or product be different than everyone else?

Ensure that your service or product has something different and better than your competition. This would give you an advantage and a strong foothold in the market.

To know more about how to search for a great business idea, check out my post – How to Find a Good Business Idea? I have also left you a link at the bottom of this post.

Find your team

When you are about to start your own business, you may need to hire a team to help you start and run your business. Perhaps, you may not need a team initially, but you will more than likely need one eventually. Finding your team is the most important thing you will ever do. In fact, a business is about the people that run it. So, the better the people that run the business, the better the business. In order for you to attract the right team to your company, you will need to do the following 4 things:
1- Develop a corporate structure and include in it all the corporate functions you need. An example of that would be; an accountant, a sales manager, a marketing manager, an operation manager and so on.

2- Choose the Best, the Brightest, and the Most Experienced person for each position.

If you can’t find a person with these qualifications, then hire the Brightest. This will give you the diamond in the rough that you can polish. In short, you would get a smart person that can be trained and will pick-up the experience eventually.

3- Train your team.
4- Protect your team, by respecting them. Pay them competitive salaries, and take care of their work environment.

To know more about hiring the right people, check out my post on – How to hire the right people? I have also left you a link at the bottom of this post.

Develop your marketing strategy

When you are about to start your own business, you need to develop a marketing strategy that will position your products or services properly relative to your target market and against your competitors.

Moreover, while you create a marketing strategy, here are 4 things you have to identify:

1- Specialization.

You need to identify your specialty. In short, you can specialize your product or service, or you can specialize in a particular customer in a specific target market.

2- Differentiation.

You need to identify where you are different than your competition. And this must give you a clear competitive advantage.

3- Segmentation

Under this, you would have to identify:

a- Demographics.
Identify the customer’s material characteristics such as:

i- Age
ii- Gender
iii- Income
iv- Education
v- Occupation
vi- Location
vii- Family Status

b- Psychographics.
Identify the customer Personality Characteristics. This will identify the actual customer that will buy the product such as:

i- Extraversion
ii- Agreeableness
iii- Conscientiousness
iv- Neuroticism
v- Openness

I understand this may sound a bit complicated. But if you are to do the marketing strategy right, you need to understand the Psychographics.

Please refer to my post on How to Develop a Marketing Strategy? for more help. I left you a link at the bottom of this post.

4- Focus

All the company’s resources have to be focused and totally aligned with your marketing strategy.

To know more about Marketing Strategy, check out my post on How to Develop a Marketing Strategy? I have also left you a link at the bottom of this post.

Build your Pricing Strategy

Price your product or service relative to your market and what your customer can afford. For this, you need to know and understand the following 3 variables, including your:

1- Competition
2- Cost
3- Position in the market

Price your product or service to allow you to compete effectively while providing your business with healthy profits to continue and prosper.

You can also refer to my post on Pricing Strategy: How to Price your Products or Services? to understand how to create a proper pricing strategy. I have also left you a link at the bottom of this post.

Prepare your Selling Strategy

The moment you start your own business, you need a sales strategy to focus you, the company and your sales team. It would also give you specific goals and common sales objectives. In fact, this is so important, as you know if there is no sales, there is no revenue. And therefore, there is no company.

To develop a comprehensive sales strategy, you need to follow these 5 steps:

1- Make sure your product or service fit your customer needs.

2- Develop an advertising campaign to inform your customers of your product and your value propositions. There are various ways to advertise. So, choose the ones that are relevant to your business, and that you can afford. Some of the advertising methods include:

a- Mass market such as; Radio, TV, Billboards and so on.
b- Targeted such as; Mailers, telemarketing, knocking on doors and so on.
c- Digital and Social media; Google, Facebook, Twitter and so on.

3- Next is to identify the most effective method to sell your product or service:

a-Cold calling, knocking on doors, on location (your premise or your customer’s premise), online selling, and so on.

4- Hire and train your sales team.

5- Develop and monitor a realistic sales targets and objectives to be achieved by your sales team.

If you want to learn more in details on how to prepare the best sales strategy, check out my post – How to Develop an Effective Sales Strategy? I have also left you a link at the bottom of this post.

Develop your social media strategy

When you start your own business, you can no longer ignore social media and the benefits they offer to position your company effectively in the minds of your potential customers. So, you will need to develop a comprehensive social media strategy that can serve your business effectively.

For that, here is what you need to do:

1- Is your customer a business or a consumer?

a- For a business customer use LinkedIn, Twitter, and YouTube.
b- For a consumer customer use Facebook, YouTube, and Instagram.

2- Choose 1 or 2 social media platforms to focus on, and become an expert.

3- Make sure your posts are useful and relevant to your target customer. Moreover, they should also be consistent with your marketing strategy.

4- Establish a post calendar, the day of the week and the time of the day you want to post, and stay consistent.

5- Establish a relationship with your customers and build a trust bond.

6- Collect information on your customers and ask their permission to market your product and service.

7- Collect statistics and refine your approach.

Finance your business

You may need financing to start your own business. And for this, you need to identify your financial requirements. This is especially if you are raising money from investors, be it a venture capital funds, friends and family, or if you need a loan.

You need to:

1- Identify how much money you need to start and maintain operation.
2- Determine when you will become cash flow positive (profitable).
3- Find out when you will recover your start-up cost.

Furthermore, run your financials using a spreadsheet. Additionally, make some educated assumptions on the revenue and cost of the operation. Then, tabulate them and run the spreadsheet monthly for 3 years, if needed.

The list below will help you organize your thoughts to start your financial analysis. More than likely, this list does not cover every financial possibility. So, I recommend that you tailor this list as per your company’s financial needs:

1- Start up cost

a- Equipment
b- Desks
c- Computers
d- And so on.

2- Cost of Goods Sold

This is the cost that is directly related to the creation of the product or the delivery of the service:

a- Identify the number of employees that you need to create your product or deliver your service. Also, determine the timing for when you will hire them.

b- Cost of material.

c- Cost of labor.

3- General Expense

a- Identify the number of office staff, sales, marketing, engineering and operation and the timing for when you will hire them.

b- Determine the salaries for the staff and the associated cost for benefits.

c- Office rent, utilities and so on.

d- Operation, Engineering, Marketing, and advertising cost, and so on.

4- Total and balance your spreadsheet

Find out important variables such as:

a- The month to break even and to have a positive cash flow.

b- Length of time it will take to recover the initial start-up cost.

If you are looking for financing from investors or a loan, you need to know how much money you will need.

Make sure that your numbers are as accurate as possible. Moreover, stay on the safe side. This means that you should ensure that you have more money than your estimates. Mostly because, the more money you have in the bank, the higher the likelihood of your success.

Nonetheless, if you are not comfortable with numbers, hire a good accountant to do this analysis for you. But make sure you are involved in this analysis.

Prepare your Business Plan

Most Entrepreneurs want to skip the step where they need to develop their business plan. And I don’t blame these entrepreneurs. Moreover, everywhere you look, you find people advising you to develop an extensive business plan. And for you to be able to do this, you would need a business degree.

Business plans don’t have to be complicated. As a matter of fact, the most effective ones are the simplest and the easiest to read.

Develop a 3 years business plan. Ignore the people who advise you to prepare a 5 years business plan. It is extremely difficult to foresee 5 years into the future. Hence, it is better to prepare a 3-year plan. And, you don’t have to be too verbose in a business plan. You can do it in point form.

Your business plan should have these main elements. They are:

1- Executive Summary
2- Company, products or Services
3- Marketing Strategy
4- Pricing Strategy
5- Sales Strategy
6- Operation
7-Team
8- Company Milestones
9- Financials

We have covered all of these items in this post. All you need to do is package them in a single document. To know more, you can refer to my post on How to Develop your Business Plan? I have also left you a link at the bottom of this post.

Company’s legal needs

You can register your company in various ways. It could be a proprietorship, meaning you and the company are the same legal entity or a corporation where the company is a separate legal entity than you. If you feel this can be complicated, consult with a lawyer.

Further, you need to think and develop a shareholder agreement. This is because you will be a shareholder of the corporation. And if you need investors, they will expect a shareholder agreement to specify the rights and obligations of each share type. Also, in this case you may need a lawyer’s help.

You may even want to have a share options plan to provide your management team and your employees with the option to buy your company’s shares at a specific low price. Some high tech companies have share option plans to reward their employees on the success of the company. A good lawyer can advise you on this as well.

Depending on the business you may need local, state/provincial or federal licensing, check again with a lawyer on your company’s licensing needs.

Conclusion

Starting your own business can be very rewarding. But you need to understand that there is no easy money out there. This means that you will have to work very hard and dedicate yourself to your business.

Moreover, you need to set yourself up for success by understanding yourself, your abilities and your commitment to start and to continue.

Surrounding yourself with smart and hardworking people can do a lot and help you achieve success.

In this post, I covered for you all the main elements to start your own business. By following them, you would be able to start off on the right foot. I wish you the best of luck and don’t forget to have fun!

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Joseph Elchakieh

About Joseph Elchakieh

He has over 30 years of business experience and founded a few companies of his own, Click Here to learn more

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