So, you are thinking of starting a business? There is no perfect formula for a successful business. You don't necessarily need a formal degree or prior experience to start something great. However, you do need a strong action plan, perseverance, and determination to implement your entrepreneurial idea. The more smart decisions you make early on in your business, the better are the chances of it being successful.
Here is the step by step guide on how to start a small business and turn your ideas into success:
1: Set Clear Goals
So you have a brilliant idea and want to implement it. Before you begin, you need to answer the most important question – Why do you want to start your business?
Here are a few reasons why you might think of starting a small business:
- Passionate about doing what you love
- You want to be your boss and want the freedom and independence to do work
- The flexibility of work hours and location
Without passion for your work, it is difficult to sustain a business for long. Passion coupled with knowledge will consistently drive you in the right direction.
Passion is the biggest motivator when it comes to launching your own business.
The downsides are that starting a small business does not guarantee a steady source of income. It requires a lot of work, to begin with, but remember, you are working for yourself and doing what you love. Successful entrepreneurs clearly know what they love doing, and what they don't, so they mold a new business to fit that learning.
If you are lazy, entrepreneurship might not be your cup of tea. While you have total flexibility on work hours and project operations, you will still have to work within deadlines, which needs discipline and focus. Once you have started your own business, you always have to be moving, literally and figuratively.
Like any other entrepreneur, you would have to hustle. It's about generating work, pursuing opportunities, and marketing yourself. Don't be afraid to go out and get exposure. There is no limit to what you can earn. The more you work, the more you will make. More importantly, all the money belongs to you. So get ready to hustle.
Step 2: Do Your Research
To know how to start a small business, you have to begin with thorough research on your idea and see how it fits into the market. Most of the study will entail gathering information about why are you opening your business? Understanding the points given below will give you clarity.
1. Does your product or service offering fulfill a need in the market?
2. What is the competition in the market?
3. Who is your target audience? Try and find out the specific needs of the customers and the products and services being offered by the competition in your demographic area.
Knowing your market, competition and audience are the first steps in starting a small business.
Step 3: Draw a Clear Business Plan
It is now time to draw a blueprint for your small business.
A well thought out Business Plan is essential to guide your business from the startup period till the time your business becomes established. Without a Business Plan, you will have no direction for the execution of your ideas.
Begin with a Title Page, highlighting the Company Name, Address, and Email address.
Write an Executive Summary, with the essence of your Business Plan – a brief description, the need that your business is catering to, and why are you starting a small business.
At the core, writing a Business Plan will answer the following most crucial questions about your small business.
Business Description - What does your Small Business do?
Write a short description of your Product or Service offering in simple terms. Writing it down will bring clarity of thought when you discuss your idea with friends and acquaintances.
Who is your Competition?
The market research that we mentioned earlier will help you outline the companies who are offering similar products or services to your target audience. Highlighting your Competitors will give you a clear idea of their strengths and weaknesses.
What is your USP or Unique Selling Point
Highlighting your Unique Selling Point will differentiate your small business from the competitors. Whether it is a unique product feature or price, this differentiator will be the reason why customers will purchase your product or opt for your service.
Developing your Product or Service
Once you are clear about the USP of your product, you need to plan how to design and build your product or service. Then, you need to write a budget for creating your product or service. Factor in every business expense - both monetary and non-monetary, that are required to start your small business. Do you need to buy equipment to manufacture your product? Do you need to hire employees to take care of the production or will you work on contract with vendors?
This answer will be the foundation of the Marketing Plan for your Small Business. How will you market and promote your product or service? Will you depend on word-of-mouth to get more customers? Will you opt for paid promotions? Will you spend money on advertising on Social Media Channels?
You will need a business website or even a store to sell your products online when you are starting a small business. Pixpa is an all-in-one platform to create your website, client galleries, online store & blog. Do more with less time & money.
Financial planning is the most crucial step in any successful business. Estimate how much revenue and profit your business will make in the next three years. You can write a page or two for each of the above questions. Remember, it is a document that you will work on, as you go along. You will make iterations as you set new goals and objectives.
Step 4: Get Feedback
It is essential to get feedback on your product. Don't worry about what people will think about your business. Let them interact with your product or service. They might point out a problem that needs to be fixed or offer a solution. Take feedback positively and engage in conversation with people about why they liked or did not like something.
Remember, the first set of people who like your product or use your service, often become brand ambassadors. Communication is the key to growing a small business. You need to get out there, market and network with large groups of people.
Step 5: Financial Planning
Finance is one of the most crucial steps to start a small business. You are the only one who can decide if you have the required resources needed to start your business. Here are a few questions you need to answer:
- Do you want to fund your business?
- Do you want to take business loans/ bank credit?
- Are you looking for external funding?
Maintaining cash flows in any small business venture becomes difficult. As you grow, the cost of running the business increase and in some cases funding your business becomes challenging. This is the reason why most small business owners opt for external funding or loans.
Here are the 5 most popular avenues to get the funding your small business needs to grow:
Small Business Loans
Banks offer small business loans, Term Loans, or Business Line of Credit to business owners. The Line of Credit is a flexible form of business funding. It allows you to buy or manufacture inventory against purchase orders, or handle cash flows, pay off debts to vendors or any other need.
To apply for a Business Line of Credit, it is essential that you have an excellent Credit score. You must regularly review your personal and business credit reports, your annual business revenue reports, turnover, and bank balance.
Besides Small Business Loans, you can also borrow money from commercial lenders, who are mostly online. They offer term loans and lines of credit, but they also provide small business new loan products—like invoice financing, equipment loans, or small business startup loans.
If you are looking for External funding, then you need to research before approaching any source for financing.
Look for Investors who will be willing to Seed Fund your Small Business. Seed Funding is Equity based financing in which investor invests money or capital in the early stage of the business.
Listed below are some familiar sources of seed funding – crowdfunding, incubators, angel investors, micro VC's, to put your business off the ground.
Seed stage startups are increasingly looking at Crowdfunding. You should look at the best Crowdfunding Websites online like Kickstarter. Research the kind of products listed, narrow down on your specific domain and see how your business fits into it.
Start-Up Incubator and Business Accelerator
Startup Incubator Groups, designed to help new businesses get to the next level. Most of these incubators provide seed funding and help with business resources, workspaces, and networking opportunities in exchange for Equity Stake in the Company. Similar to StartUp Incubators, Accelerators help with seed funding. They offer a specific program to startups for a fixed period, usually 90 days to four months.
An Angel Investor is a private investor who invests his / her own money in a portfolio of startups, in exchange for shares in the Company.
Micro Venture Capital Firms
Micro Venture Capital Firms, invest money in seed-stage businesses, that are too small to attract the attention of big Venture Capital Firms.
It is vital that you have clarity, on your business budget, before you can start looking for outside capital.
Step 6: Choose a Business Structure
There is no single best choice while choosing a Business Structure. Here are the different types of Business Entities:
1. Sole Proprietorship
3. A corporation
4. LLC - Limited liability company
Let us talk about each one of these structures which are the legal requirements for starting a small business.
Sole Proprietorship – A Sole Proprietorship is the most common form of organization chosen by Small Business Owners. It offers complete control of the business to the owner and is easy to form. Most Small Business owners who operate from home, without a store, opt for a Sole Proprietorship.
Partnership – In a Partnership, there are two or more owners. In General Partnerships, each partner is actively involved and responsible for operating the business. The partners retain liability of the Company's finances and debts. In a Limited Partnership, only one partner has control of Operations, while the other Partners have limited input and receive only a part of the profit.
If you are looking at a Partnership with a friend, family member, or business partner, you must seek expert advice
and begin with a written Partnership Agreement.
A Corporation – According to law, a corporation is an independent entity, separate from its owners. It has its legal rights, and it can sell the stock, raise money, own and sell the property. A small business owner who decides to incorporate enjoys limited liability protection, i.e., the corporation's debt is not considered as the owner's debt. There are several tax options available to corporations than to sole proprietorships or partnerships.
There are several types of Corporations – including C Corporation, S corporation, B corporation, Non Profit corporations, and Closed corporations.
Corporations are recommended for large companies with multiple employees.
LLC allows owners to take advantage of the benefits of both the corporation and partnership forms of business. The profits and losses can be passed through to owners who are shielded from personal liability.
As a Small Business owner, you need to consider financial needs, your circumstances, risk ability before taking the final decision. You must remember, it is not easy to change the Business structure, once you have registered it. Seek expert advice and make the correct choice!
Step 7: Pick and Register Your Business Name
Once you have a business plan and structure, it is crucial to work on the legal requirements for starting a small business.
- Finalize the Name of your Business and register it.
Each state has different rules about what your entity name can be. In most cases, you cannot register a name that's already been registered by someone else, and some states require your entity name to reflect the kind of business it represents.
- Open a Business Account and complete all formalities.
- Get your Federal Tax ID number EID and State Tax ID
- Protect your Intellectual Property - The most common ways are patents, copyrights, trade secrets. Read about each of these in detail and seek expert advice. When you are evolving your business, you need to think about how to protect your original idea and licensing requirements.
- Register for trademarks- You can register your business for both a state trademark and a national trademark.
It is advisable to consult a lawyer when you are starting a small business so that all formalities are taken care of. Once you have understood the rules, you must follow government regulations.
Step 8: Get Licenses and Permits
As a new business, you will require to get a license and permit. In some places, there is a generic business license that is needed before you begin operations. Do keep in mind that different specialized businesses are subject to special regulations. Food trucks, for instance, due to their mobility, require a separate food license.
Step 9: Choose Your Accounting System
While selecting an Accounting Software for your business, you must keep in mind the following points:
- Keeping a record of payments, tracking expenses, creating invoices, and reconciling transactions are daily tasks. As a small business owner, the software should simplify bookkeeping and accounting.
- You need to review the financial aspect of your business regularly to maintain cash flows and give you an insight into your business's performance.
- Use an Accounting Software that offers Basic Accounting Features such as invoicing (both by email and snail mail), facilitates multi-currency transactions, tracks income and expense, financial report generation, and offers customer management.
- Multi-User Access is essential so that as your business grows, you can invite other users to the platform.
- Use a cloud-based software so that you have access to your account at all times. Most top accounting systems allow mobile access, so if you are connected to the internet, you can run your business from anywhere! Also, make sure that the Accounting software can be integrated seamlessly with the other software you are using.
- Pick a software that offers multiple tax rates and helps you with tax reports. It will save a lot of time during tax filing.
- Be sure that your data is secure and the Company offers customer support.
Do not take hurried decisions. Research and look at the different options available and their price points before making the final decision.
Step 10: Set Up Your Business Location
Your Business location could be a brick and mortar store or a small office. Remember to have a clear list of your requirement before you choose a place. These days, the options are many. Research the areas around town online. You can look at a co-working space to start with, before investing money in your own office. Business centers also offer short term options. Explore these options before taking the final decision.
If you are searching for a place for a retail store, there are a few things you need to keep in mind:
- Your business location should be in line with the style and image of your brand.
- Choose a place that is best for your business. An area that is centrally located and draws footfall. If you are opening a retail store, then proximity to the local community is essential. Does the neighborhood provide the best chance at a sustainable market share? What is the competition in the given area?
- Research nearby businesses and the services they are offering.
- Rent is a prime consideration before you finalize any location. Before signing the lease, do remember to discuss utilities and other costs.
Step 11: Building the Right Team
Your business will only be as good as your team. As work grows, you will need to delegate responsibilities to your organization.
Whether you are working with freelancers or employees, you will need to set clear goals and make sure that each team member understands the business – its vision and their respective roles in achieving growth.
Asking the right questions while screening the candidate is essential before hiring an employee for your Company.
Step 12. Promoting and Growing Your Small Business
Your clients are one of your greatest assets, and making them happy is a priority. If a client is satisfied and ready to be willing to recommend you, it is excellent for your business. Have you ever thought of the income you could gain from repeat clients? Customer retention can be the strategy that ensures the future of your business.
By encouraging customer loyalty - by keeping clients coming back, you can not only
enhance your bottom line but also build your brand.
In a study by KPMG, customer retention was identified as a critical revenue driver in company revenue growth in the immediate future, and it's not hard to see why. Improving your customer retention rates by 5 percent can increase your business' profits anywhere between 25-95 percent. So why focus on client loyalty and not only new client work? Marketing tactics are useful for e-commerce businesses and brick and mortar businesses looking to acquire new customers while starting a small business, but it should not be the only focus of a company.
Why Customer Retention Merits Focus
There are a host of reasons why customer retention should be a focus in your business. Keeping customers is cheaper than acquiring new ones; a claim that has been repeatedly proven. 44 percent of companies focus more on customer acquisition while a mere 18 percent focus on retention, according to the data in an E-consultancy report. In each assignment or contract secured, you are presented with the opportunity to achieve their loyalty and future income. The efforts (both human and financial) spent on piquing the interest of new customers and making that first sale can cost up to 7 times more than retaining customers.
Happy, loyal customers are also a great marketing asset as well. Your business can benefit from the free promotion through recommendations and word of mouth.
Keep your customers happy, and they will return the favor.
Implementing It In Your Business
Now that you know the value of customer loyalty to your business, how do you get started? Surprisingly, many ways of increasing your customer retention rates are simple and not investment intensive. A few tips implemented throughout the creative process can make a huge difference to clients and keep them coming back.
Tailor Your Communications
One of the best ways to improve customer retention is to make your customers feel valued. One of the ways to do that is to communicate with your customers. Start by implementing a communications schedule to make sure you keep in touch regularly and build a relationship with your clients. Seek to build a relationship with each client feels personal and be sure to make this a theme in all communications. Was their past purchase a newborn portrait? Remember to include that child and ask about them coming up to the one year mark.
Schedule regular emails highlighting any discounts and special offers personalized to your client's experience with you. Take a look at inactive customers and segment emails specifically aimed at them in a bid to reactivate their interest or find out why they chose not to continue using your services for other milestones. With the right approach, dormant customers can become interested again, and it will cost much less than acquiring new clients.
Excellent Customer Service Goes Beyond The Session
Good customer service does not end with the delivery of the product/service. It is equally essential to follow that up after a client's experience. Implement measures such as follow up phone calls and emails to enquire how they found the entire time working with you and thank them for choosing you. The reality is, there will be multiple other creative small business offering the same service or similar products, so a customer's choice to select your services should be acknowledged.
To maximize effect, utilize all available platforms to increase your customer reach. Don't just stick to telephone contact numbers but include social media platforms for instant access.
Excellent customer service is also paramount in dealing with customer complaints and dissatisfaction. Your response to customer grievances can either hinder or help you convert unsatisfied customers into a loyal base. In service-intensive industries, including the hospitality business, your reaction to complaints is the perfect opportunity to distinguish yourself from your competitors.
Get Personal With Your Rewards Package
Many studies have shown how effective rewards packages can be for businesses looking to improve repeat customers. However, for most small business owners, rewards are different from granting loyalty points. Exceeding your customer's expectations can make sure they leave satisfied and keep coming back. Any client would appreciate a reward package for choosing your services. For creatives businesses, these can include rewarding any referrals and incorporate special bookings for clients.
However, a rewards scheme will have little effect unless it is specifically tailored for your customers, and it provides the perfect opportunity to link your services offered. Explore ways to add a personal touch to your rewards system. Handwritten thank you cards after working with clients, and little bits such as providing consideration for those with younger children can go a long way in making individual customers feel valued.
Get On The Same Level As Your Clients
When starting, every business defines its target markets using segmentation. Each of these groups has its characteristics and interests. Use these to realign your business with your customers' needs and expectations. Younger customers are more receptive and aware of a brand's social media presence while senior customers may prefer a traditional in-person touch. Asking for feedback after each service provider can also provide details for future directions. Utilize this information to foster a relationship with customers and improve their ease of access. Also, this provides increased visibility of your brand, and increased visibility offers the potential for new sales.
Think of including a client forum or community accessible on your website or across social media, to give clients a voice and allow them to connect. Finally, with the shift towards e-commerce, your small business has a better chance of securing a sale and increasing visibility on a platform where they spend most of their time. For service and creative oriented businesses, providing a social media sharing feature can appeal to clients and help them feel that they are understood.
Make It About The Customer Experience
To get undivided customer loyalty, you must be prepared to go well beyond the sale of a product or service. Looking at the customer's entire experience with your business can provide some useful insight into ways you can make their interaction with you, from inquiry to after sales, a seamless experience. Take note of your customer's relationship and certain milestones that may occur for long-standing clients. For birthdays or anniversaries of membership with your Company, a small reward personalized for the client can go a long way in maintaining the relationship. Involve customers every step of the process and keep abreast of current trends in the industry. With this, you can offer clients up to date products and inspire their trust.
It is great to be a master at your craft but maintaining interest is also a vital part of a business' sustainability. Customer retention is one of the ways you can do that. Not only is it useful in promoting customer loyalty, but it also provides a cost-effective way to secure other clients through word-of-mouth from satisfied customers. Understanding and exceeding your clients' expectations, communicating with them, and showing your appreciation are a few great strategies for any business are looking to improve their loyal customer base. Incorporate a few of these principles and watch your bottom line grow.
Step 13. Create your small business website
As a small business, you should use technology to make yours and your clients' life more comfortable. Having a well-structured business website with great client galleries platform will help your clients to explore, proof, favorite, share, buy products and download product images easily.
Here is why Pixpa is the best website builder for small businesses to build a strong brand, increase traffic, and drive sales:
Beautiful, Responsive, Customizable Themes
Choose from fully-customizable, responsive website themes designed to create a beautiful small business website. You can also change your website template anytime quickly to refresh your site.
Powerful Image Galleries
The Image Galleries are packed with powerful features. You can add images, videos/ HTML slides in your gallery. Add photo captions or enable IPTC data import. Choose the way you display each photo gallery by selecting from over 20 layouts styles - from horizontal or vertical scrolls, dynamic or square grids, and slideshows.
Your Pixpa website comes with an in-built blogging platform. You can start blogging easily with integrated blogging tools. Several blog layouts, tags, embedded media, and commenting make blogging easy and expressive.
Client Galleries on Pixpa
You can streamline your workflow and let your clients view, proof, purchase, share, and download images on any device. You can also sell your images as prints or digital downloads. Learn more about Client Galleries here. https://www.pixpa.com/proofing
You can easily add an online store to your small business website and sell physical products, digital products, and services. Managing inventory, order fulfillment, discounts, shipping rates, and taxes can efficiently be executed on your store. You can also add e-commerce enabled galleries on your website to sell your images as prints and downloads to your clients. Use Client galleries to sell and deliver images directly to your clients. Creating pricing sheets, automating print processing, digital files delivery is possible on your Pixpa Ecommerce store.
Read about E-commerce enabled galleries here. https://www.pixpa.com/store
Mobile Gallery Apps
Pixpa allows you to create personalized photo gallery apps to share images to your clients quickly and with ease. Your clients can add them to their mobile devices as apps and access them easily anytime. Mobile responsive apps are a great feature, as smartphones have changed the way we do business. Clients now seek information on the move. Easy accessibility of Mobile Gallery apps will drive revenue.
Read more about features of Pixpa Website here: https://www.pixpa.com/features
When you are brainstorming on how to start a small business, you need to learn from people who have done this before you and set an example for you to follow. We hope this guide will help you in exploring every aspect of starting a Small Business. None of these steps can be taken lightly, but with the right business planning, you will have the tools you need to be successful.
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