Tuesday, 11 September 2012

9-Steps To Starting a Small Business

It still pains me in the ass to know that my start-up failed just because I didn’t follow 9- steps to starting a small business. Can you imagine? In his book, “Rich Dad Poor Dad”, Robert Kiyosaki laments that most start-ups fail within their first 5 years. You are lucky if you make it to ten. Well, mine didn’t celebrate its first birthday. Laugh at me all you want mate! But do you know why I won’t get offended? I was insane at the time. Albert Einstein says insanity is doing the same thing over and over again, using the same method, and expecting different results. Well, you don’t have to go through my agony because I have made it easy for you, aspiring entrepreneur!

The 9-steps I have put together should be your Bible. No offence to the born-again Christians. I will place your success in a silver platter. It’s up to you to take it, or become a commoner just like anyone else. Here are the steps:
1.    Identify your business opportunity
This is the most critical step in your path to successful entrepreneurship. How do you go about it? I have put together 4 important personal questions that should make everything easy for you:
                      i.        What is my personality?
                    ii.        Where does my passion lie?
                   iii.        What skill (s) do I have?
                   iv.        Which market (s) am I venturing into?
The sooner you get answers to the above questions, the better. They will help you identify a business opportunity, among the many available, which will propel you to become a successful entrepreneur. I am sorry to say, “No viable business opportunity, no business.”
2.    Write a business plan
Did you know that a study by Paul Tiffany reveals that companies with a solid business plan achieve 50% more profits and revenue than non-planning businesses?
Writing a solid business plan will enable you gain a deeper understanding of your industry structure. It will reveal the capital requirements and sources of competitive advantage that are important for any start-up.
Writing a business plan should be an easy task. However, I recommend you hire a professional to build a comprehensive business plan for you.
Since I haven't written a guide yet on how to build a business plan, this resource will help you a lot:

"Critical Steps to Writing a Business Plan"

3.    Find cash
I know this is an elephant to most start-ups. You might possibly argue that this should be the first step. You’re dead wrong. I mean how do you gather cash if you don’t have a business opportunity? How do you approach an angel investor or a bank without a business plan? Moreover, how will you know how much you need if you don’t have the capital requirements?
Now do you see why I failed? If you pitch your doable business opportunity to a friend, an angel investor, or a bank with a viable business plan, I guarantee you will get more than enough cash.

4.    Come up with a business name
Did you know that a business name aids in branding your business? It should be catchy, and simple. It helps distinguish your business from angry competitors. Give your clients a reason to hire you, or buy from you by coming up with a beautiful and shiny business name.

5.    Select a business structure
Do you want a sole proprietorship, limited company, partnership, or corporation? The reason why I am asking you this question is because a business structure impacts on business liability, taxes, and availability of funding. My failed small business was a sole proprietorship. I carried all its liabilities man. I once got arrested by the authorities for not paying council fees.
However, remember that as a business grows, its business structure might change. Who knows, probably I would be heading a Limited Company by now were it not for my ignorance.

6.    Acquire necessary business licenses and permits
Authorities will catch up with you if you don’t have the necessary business licenses and permits. Check with them to find out what you need to avoid business closure, fines or penalties. You should reap sweet fruits of you business success. I swear you won’t if you don’t satisfy the authorities.

7.    Select a business location
Did you know that a business location greatly impacts on your competitive advantage? Your business location determines your degree of competition, retail compatibility, room for expansion, visibility, trade area size, and customer traffic.
I can comfortably brag at this because my business was strategically located in the market place. You should contact me on this.

8.    Apply for business insurance
I like to say, “Put all your eggs in one basket and take great care of that basket.” It’s so sad to see entrepreneurs go down to ashes simply because they didn’t insure their small businesses. It’s discouraging. There are many insurance firms that can insure your small business at a small premium. The premiums you pay are nothing compared to the loss you incur if anything terrible happens to your business. Be smart. I recommend that you talk to a qualified insurance agent who can select the best insurance cover for you business. This way, you are taking great care of your basket.

9.    Set-up an accounting system
Think really hard about setting-up an accounting system because your business life depends on it. Your accounts reflect how your business is performing. If you don’t do proper book-keeping you are as good as dead in business. Proper accounting records can be presented to bankers when applying for a business loan.

Starting a small business shouldn’t be a hippo. I have made it simpler for you. Reading the steps alone won’t help, act on them. I see that great entrepreneurial spirit in you. Together we can nurture it.

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