Building a new startup from scratch can be overwhelming, especially if you’ve never started a business before. Sometimes it’s difficult to even decide where to begin. Well, of course, you have to start with an idea. Once you have that, there are a few important steps you should take before making any financial investments, and there are some essential components of a business you need to have ready before making any sales. Here are the top tips for building a new company from the ground up:
Narrow Down Ideas and Get Organized
Perhaps you already have your business concept narrowed down, or perhaps you still have a few ideas you’re juggling around. Perhaps you’ve chosen a concept, but it still needs to be fleshed out. The first step is using a brainstorming and organization software to sort out your thoughts and create a solidified game plan. Create mind maps to visualize your concept ideas and easily compare ideas side-by-side. It’s also a good idea to find an app that is versatile and makes sense to you so you can use it for future financial planning, product development, and any other brainstorming you need to do down the road.
One popular brainstorming software is Braincat. This new app is still in development but is loved by users for its originality. Braincat guides you through a specific thought process designed to help you clear your mind and see projects in a new way. Many startup owners use Braincat for product development and business planning because it not only helps them sort out cluttered thoughts, but it also boosts creativity via carefully tailored question sets that vary depending on your project type.
Here are some key points to keep in mind when analyzing startup ideas:
· What is the business mission?
· Who is the target audience?
· What makes this concept original or unique?
· What are the costs? How will you fund it?
It’s also important to get feedback from outsiders on each idea. Having as many trusted, unbiased perspectives as possible will help you see new angles and potential limitations you didn’t consider. Ideally, this means at least one professional business consultant who can provide insight from within the business field. This is especially important if you’ve never built a startup before, as they will offer advice and help you set realistic expectations. If you don’t want to pay for a business consultant, or you want additional opinions, you can check out business themed online forums such as GrowthHub and startups.com. When it comes to online sources, it’s important to consider the expertise of the person giving advice.
Make a Financial Plan
Once you have a fully developed business concept and a general idea of the costs involved, it’s time to create a more definitive budget and financial plan. Include basic information about your startup, such as the name, type of business, and mission. Most of the end points of your original concept brainstorming should be included.
Keep this as a working business plan to refer back to and update as your startup develops. It’s important to always have documentation to remind you of the startup’s core mission, goals, and financial expectations. This way you can recognize when you are going off-track or when you need to reassess main goals. In this plan, get into the specifics of exactly how much your startup is going to cost just to get “up and running”, in addition to operating costs.
Obtain a License
Before making any sales, you’ll need to apply for an employer identification number or EIN. This is necessary for separating your personal identity from your business. Applications are free on the IRS website.
Additionally, research any other required licenses for your type of business. Some industries and locations require additional licenses in order to make your business legal.
Set Up a Bank Account
Once you are licensed, you can open a business bank account. This will be the account that collects all revenue from the business and makes business-related expenditures. It’s important to have a separate business account for tax purposes, as well as personal financial organization.
Get information about business account features and limitations from a variety of banks and credit unions to find the one that suits your needs. Take into consideration the payment processing speed, minimum account limits, and customer service reliability.
You will also need to hire a company that handles payment processing, like Square, so that you can accept credit and debit card payments from customers. Just as with finding a financial institution, you should compare multiple different companies to find the best fit for your business.
Create a Website and Rent a Space
Once you have a business bank account, you can begin making expenditures on your startup. The two most important expenses right off the bat are a website and a physical building or space, if your business requires one. If you can operate without a physical location, do it. Don’t waste money on renting and operating a building if it’s not an essential component of your business model.
Online presence is absolutely essential for business success. One of the biggest mistakes business owners make is underestimating the power of a website and online network, even when your company doesn’t rely on eCommerce sales. Creating a website can come before any physical preparation because you can begin generating local awareness before your business even opens.
Of course, if your business needs a physical office or retail location, now is the time to find one and prepare it for grand opening. It is advised to do this step as close to opening as possible, especially if you are renting, so that you can minimize your operating costs before you begin bringing in revenue. The same goes for other repeating expenses like employees.
Be sure to start off your business with a bang in terms of marketing and advertising. A strong marketing campaign from the start will bring in customers on day one. In addition to paid advertising campaigns, make social media accounts and interact with the local community to build a positive brand reputation.
In the beginning, building a strong image for your brand is extremely important. You should even consider hiring a professional marketing company that can offer top branding strategies and additional resources.