Entrepreneurship is the process of starting or improving a company with the ultimate goal of generating income. It often carries risks and some uncertainty but is also an opportunity to overcome challenges and learn to manage various aspects of business operation; from marketing and accounting to logistics and other sectors.
However, this is not an easy thing to do. In fact, one data revealed that 90% of startups fail. Despite this disappointing figure, the idea of becoming an entrepreneur is still very attractive to most people. Like other high-risk activities, it attracts adrenaline lovers who, far from seeing it as a warning, are stimulated by this challenge.
And let’s not forget that every risk has its reward. Starting a business is one of the most creative activities, and it can bring a lot of satisfaction on a personal level.
What Is An Small Business Entrepreneur
A small business entrepreneur is an individual who starts their own company by identifying a need and develop a product or service capable of satisfying it. Small business entrepreneurs manage the business and assume all the financial risks associated with the project.
Among the most famous people who were once small business entrepreneurs are:
- Oprah Winfrey
- Bill gates
- Walt Disney
- JK Rowling
- Steve Jobs
If your goal is to be like them, it may be time to fire up your entrepreneurial spirit.
What Does It Mean To Start A Small Business
Howard Stevenson, a professor at the Harvard Business School, says that “entrepreneurship is the search for opportunities that goes beyond the available resources.”
What does this mean? Small business entrepreneurs dedicate all their time, energy and resources to create a unique product or service that sparks consumer interest. They keep going despite any limitations like lack of budget, working capital, production facilities, etc.
How To Start A Small Business
When starting a small business, some initial steps must be followed. Let’s analyze each of them.
1. Determine the legal framework of your company
To start, you will have to decide the type of company you want to have from a legal perspective. This could change as your company grows. The most popular type of company for small businesses is the sole proprietorship. In a sole proprietorship, you are solely responsible for the legal and tax sides of the business. While this is easy to organize, it can be problematic when it comes to raising funds, as you would be asking funders to invest in one person, rather than a company. Furthermore, the sole owner is personally liable in case of any debts or losses.
Limited liability company (SRL), on the other hand, are more difficult and expensive to set up, but they have some tax advantages and protect their owners from being personally liable (that’s where their name comes from).
2. Choose and register your business name
This is the time to select and register your company name. It might sound like fun, but in practice, it is a legal process that requires a lot of documentation and could have major repercussions in the future. First, do a trademark research to see if the business name you want is available. You can then register your name and logo for approximately 300 USD.
3. Make sure you have the licenses and permits
Now you have to make sure you have all the permits and licenses to operate legally. If you sell tangible goods (that is, physical products), you will need a sales permit. This will enable you to collect a sales tax from your customers. In some places, this permit is also required for companies selling services.
Get information from the government page and on the tax collector site of your country. Surely, you will find other useful resources and tools to use in starting your small business.
4. Decide what your mission and vision statement will be
What is the function of your company? What values does it have? What problem do you help to solve? How do you plan to make the world a better place? The mission and vision will answer these questions.
This step will be the key to your marketing strategy. Brands with a clear identity and a strong mission and vision statement produce more authentic and relevant content that effectively communicates their core values. If you need inspiration, take a look at the websites of your favourite startups. What is their mission? How do they communicate their vision?
5. Write the marketing plan
When you have the license to operate, you should start creating an online presence and tell your story. First, think about your target customers. Ask questions like:
- Who will want what I sell?
- Who will find it useful?
- Who would promote my product or service?
From there, think about who these people are and with what type of messaging they would feel more identified. Think about the context, their interests, goals and problems, in addition to their age, what they do and what social networks they use.
How to Launch Your Small Business and Keep It Going
1. Know your customers
Most companies and entrepreneurs who want to launch a small business to the market does not know so much about their customers. Knowing your customers and empathizing with them is the key to getting your small business idea off to a good start.
2. Materializing your idea
Assuming that you’ve already done step 1; you know your client and you have detected a need in the market. Now comes the part of designing a product or service that satisfies the needs of your customers. Here, creativity and knowledge of technology is being used. If it is a new market for you, you will have to know it in depth by doing some research and investing some of your time to familiarize it.
3. Shape your business model
A business model will allow you to understand if your idea makes sense or not. How do you expect to generate income? how do you hope to get your product? How much is it going to cost you? Complete your business model so that you can see at a glance if your business idea is going to be profitable or not. Having some details from this business model will be able to help you conduct experiments that help you validate them, and with this, gradually consolidate the business model.
The key to launching your company to the market is to design experiments that allow you to validate or discard hypotheses from your business model, without spending your entire budget. For this, it is important to have a team with experience, who has gone through what you are going through before and logically knows how to carry out your business idea forward.
4 Develop your prototype
The time has come for you to know if your business idea can be built. Whether it is a physical product or a service, knowing how to make a prototype is the key to testing whether your idea can become a reality and, above all, see how customers behave towards it.
Depending on the type of product, you can use one type of prototyping or another.
- If it is a software or a program, Prototyper Free or any other similar tools will help you create a prototype without having to make an investment in programming.
- If it is hardware, boards like Arduino or Raspberry Pi can get you out of trouble in most cases.
- If you have a physical product, 3D printing or even just cardboard will help you build a prototype that allows you to test some hypotheses.
- If you have a service in mind, invite in a few people to test it and gather their feedback so that you’ll know and understand the areas you need to improve on before launching.
And with your prototype, you are ready to move on to the next phase
5. Get the customers’ first impressions
Presenting the product or service to your customers requires a strategy. It is not complicated to do, but you must be very clear about what you want to achieve from the product demo, what you are going to learn, and what metrics you are going to use to know if the experiment passed or not.
6. Redesign the product or service based on the comments of your customers
Your clients’ comments, whether they are positive or negative, are the key to continue redefining your product or service and finally reach a successful solution. A successful solution does not mean definitive or loaded with functionalities, it means a solution that satisfies the biggest problem of your early testers.
Without sufficient feedback, it is very likely that you will design functions for your product or service that will not work, that are not worthwhile for your clients, and you will stop developing functions that are important to them. This is one of the biggest mistakes that entrepreneurs make.
7. Build your conversion funnel and measure everything
If you are going to launch a company to the online market, you need to build your conversion funnel. You can do this even in offline transactions too. This is the way in which your clients go through the different phases of the purchasing process, from the moment they meet you until they finally buy and in the best case, recommend you.
It is important to build this funnel when you are starting your business. Many times, entrepreneurs want to go to the next phase like expand and grow their business, viralize it using growth hacking techniques, but for what? You still need to know how your client behaves, which channels are the most effective for them, and why you lose potential clients. Do this when you still have few clients and when you can still move a manageable amount of data. It won’t do you any good to run a marketing campaign and spend a lot of money if you don’t know what the customer buying process is like.
Launching a company to the market is not just about doing a marketing campaign, it’s also about the data helping you make decisions, prove that your business model will be profitable and that your product or service provides engagement to your customers.
For all of this to make sense, it is necessary to propose metrics that allow you to know how your customers behave. If your business is online, there are many tools available that allow you to get the important data. If your business is offline, you will have to devise a system to measure and record how interactions with your customers are and how sales occur.
8. Launch your product or service and grow
If you have come this far, it seems that your business idea is on the right track. You have detected your initial testers, you solved a problem or need, you have validated the hypotheses of your business model, you have iterated your product or service based on the needs of your client and you know your sales funnel. Finally, the time has come for you to launch your company to the market.
Doing so depends largely on the place in which your business is located. One of the key things that we highlight in almost any business is that even before your idea begins to take shape, you need to generate an online community. Generate or at least in the first steps enter an existing one and little by little create yours. Why? Because that will allow you to share your knowledge, position yourself as an expert and, of course, publicize your business idea. In this aspect, without a doubt, a blog will help you a lot and will be a key part of your marketing strategy.
Whether your business is offline or online, having a good marketing strategy will be a key part of achieving your goals sooner or later.
As you can see, in these 8 steps, the only formula to achieve success is work, strategy, measure results and make decisions in an agile way.
Throughout this process, lean startup methodologies and the experience of others who have already tried almost everything, will be key to reducing the risk that every project or innovative business idea has. Launching a company to the market is an exciting challenge that will give you great satisfaction, but you must follow a process that allows you to be in direct contact with the market from the first minute.