There are hundreds of factors to think about when starting a new company – even more when you have to consider how to start up a business that can function during a pandemic. From planning and market research to making financial decisions and marketing your products, building a business can seem like an intimidating process.
Although there’s no one-size-fits-all approach that can ensure entrepreneurial success, there are a few strategic cornerstones to success. We’ve outlined five key areas to focus on when starting a business in 2021.
5 steps to start up a business
1. Identify whether entrepreneurship is for you
This may sound like an obvious place to start, but understanding what you’ll need to do to build a successful business is incredibly important. As new businesses are at the greatest risk of failing in their first five years of existence, it’s likely that your venture need to be the main focus for your time and energy during this period.
It’s a great idea to set up a SWOT (strengths, weaknesses, opportunities and threats) analysis to identify which of your traits can be leveraged and well as areas that may require a bit of work. This will help you to figure out your goals as well as what motivates and inspires you, as well as whether this can fit into an entrepreneurial framework.
You can also ask yourself a few questions about why you want to start up a business:
- What would you do if money didn’t have to be a consideration?
- What are three things that really matter to you?
- Is making money your main priority? What are your financial goals?
- Do you have the support of your loved ones? Especially those who are closest to you.
- Who do you admire in business? What can you learn from them?
2. Polish your business idea
Once can clearly identify what it is that’s motivating you to start a business, you can settle on a final business idea and start refining it. While plenty of ideas are great in theory, it’s important to ensure that your business will work in practice. From understanding whether there’s a need for your product offering to identifying whether your operation is sustainable, it’s essential to take time out to work out the details of what your business will look like.
Rather than spend hours – or weeks – doing market research and writing up business plans at this stage, you can create a simple one-page pitch to investigate the viability of your idea. If you use it to build on your initial concept and iterate, this type of ‘elevator pitch’ can potentially help you to identify the best possible business model for a profitable company.
3. Do some market research
Before you head off to create your new goods or services, you’ll want to know that there will be customers who want to buy your products. Plus, you’ll need to have an idea of the current market landscape, including how much competition is out there.
First, you’ll want to consider your target audience. Conducting a market analysis can help you to identify:
- If there’s a need for your offering
- The size of the market
- How easy it is to set up a business and how many barriers to entry exist
- How much time and money you will need to invest to provide the value you want to offer
- Whether there will still be demand for your product in the medium to long term
You’ll want to speak to potential customers and get feedback about whether they would be interested in using your product or if they already use a similar competitor product (and what it would take for them to switch to yours). In line with this, you’ll need to do plenty of competitor research to find out what they provide for their customers, how they market their goods and whether their customers are satisfied.
4. Write your business plan
A business plan is a must-have if you’re going to be looking for outside investment. But even if aren’t going to need funding, it’s a good idea to draw up a roadmap for your company. In a survey conducted on 3 000 business strategy software users, Palo Alto Software found that respondents who had a business plan were almost twice as likely to successfully grow their business, get investment or land a loan than those who didn’t have a plan.
Setting down a plan will help you to identify what needs to be done to achieve your goals and track your success in doing so. It will be an invaluable asset for creating a well-thought-out strategy that highlights key milestones, as well as defines timelines, budgets and cash flow.
5. Set yourself up for success
It’s completely natural to make mistakes in the early days of your business. And it can be highly beneficial learning process. To ensure that you and your business are able to take advantage of the lessons learned from these foibles and continue on the path to success, it’s a good idea to set up review processes.
Being able to look back on a project and identify what went well and what went wrong will aid you in making better decisions in future situations. This is where your business plan will be incredibly useful. With an up-to-date plan, you’ll be able to set up monthly review meetings that help you to reach milestones, develop forecasts and adjust your business strategy to get the maximum benefit from your operations.
Ultimately, this means that you’ll be tracking performance and making decisions based on actual results and feedback from the market, greatly reducing your risk of failure.
Even if you’ve come up with a million-dollar idea, you’ll need to have a solid plan based on plenty of research and facts to ensure your business’s success. To avoid the risk of failure, it’s a good idea to identify the merits of your idea as well as whether entrepreneurship is the right route for you. You will also need to do market research to establish if your offering will be well received by potential customers, as well as how competitive the landscape is. Finally, drawing up a business plan will help you to set a course to success and stick to it.