Starting a business is not for the faint of heart. It takes a tremendous amount of work, patience and grit to create something from nothing and make it profitable. But when you do your research, understand the market and have a plan, putting your passion to work and becoming your own boss can be both satisfying and successful.
In a recent survey*, 500 people were asked about their plans for the future. Of those surveyed, 17% expressed a desire to own their own business. They viewed business ownership as a way to better prepare themselves in the event of future uncertainty in the marketplace. Most respondents also felt that additional education would be beneficial to help them reach that goal of business ownership success.
While there is no one-size-fits-all set of steps on how to successfully start your own small business, there are key strategies and considerations that can help you. Every entrepreneur, regardless of industry, can apply these strategies to create and run their own small business with confidence.
How Can a Beginner Start a Business?
Identify a service or product. The important first step for starting any business from scratch is to identify a service or product that offers value to others. Be sure to choose a service or product that you have the skills, talent or initiative to provide, because “the business will consume a lot of your waking time and thoughts,” said Nick Stellitano ’12, co-founder of Dillinger Research and Applied Data and an MBA program graduate of Southern New Hampshire University (SNHU). If you’re going to spend the bulk of your time building a business, you should choose a field you’re passionate about.
Conduct market research. Identifying your passion is not enough, however. No matter how well you know your field, market research is important. Don’t have a marketing background? Don’t worry; marketing skills can be taught. Start by researching on your own to learn as much as possible about your target audience.
“Begin with a general Google search and let that lead you to even more in-depth information,” said Ann Sanok, faculty lead of business programs at SNHU. “Be sure to explore the many thousands of articles, journals and business information websites that you can access online through your university or public library’s online research databases.”
Explore legal requirements. Consider the legalities necessary to get your business off the ground. You may need to open a business bank account, file legal papers or hire an accountant or legal consultant.
Consider your strengths and weaknesses. Evaluate your own skill set in the six primary areas of a business: production, research and development, sales, marketing, human resources and accounting/finance. “You will likely be the only person wearing all of these hats at first so be ready and willing to figure things out,” Sanok said.
Hire help. If you are able to do so, consider finding a business partner. “A CEO of a tech company once told me that it is almost impossible to start a successful business by yourself, but with two people it’s more promising,” Stellitano said. A partner may serve as another practitioner of your service or product, or they may be a talented operations manager who will handle billing, paperwork and other necessary processes. Either way, having a trusted partner by your side increases your chances of success.
Develop a business plan. “Starting a business should include the creation of a business plan,” said Meleena Eaton, associate dean of business at SNHU. A solid business plan identifies the scope of your offerings, what is needed to get the business off the ground and any financial needs you anticipate having. “You’ll also need a marketing plan,” Eaton said. The former addresses the structure of the business, cash flow and your goals. The latter outlines your plan of how to market your business to find new clients, promote your business on social media and create and produce advertising.
What Are the 3 Main Ways to Start Your Own Business?
Because you may not have the luxury of putting in full-time hours to get a new business off the ground, you’ll need to be strategic in how you get started. No matter how you get started, you’ll need money to cover startup costs, like your own living expenses, paying an accountant or lawyer and buying any goods you are planning to sell. Covering these costs requires a lot of money upfront, a large tolerance for risk or very likely both.
1. Find a sponsor or investor willing to give or loan you startup money. While not impossible, doing this “is usually unlikely,” Stellitano said.
2. Do the business part-time while working a full-time job elsewhere until you have enough clients and can afford to quit your day job. “Unless someone is willing to give you lots of money upfront, which is unlikely, you may need to choose this route,” Stellitano said.
3. Take a chance, quit your day job and start the business full throttle. This leads to the most risk, but payoffs can be huge since you’re giving the business your full attention.
In each of these scenarios, cash is paramount. “So, no matter what, you better have a plan to pay your bills, especially payroll,” said Stellitano said.
What Are 5 Things You Need to Start a Business?
1. Money. Everyone knows the old adage: you’ve got to spend money to make money. While starting a small business and working for yourself can be exciting, the reality is that you have to earn a living doing it, or else the business is not viable. Startup cash can come from private investors, grants or loans. Many people choose to keep their full-time job to earn a living while working to get their small business off the ground.
2. A solid network. Having a network of clients, supporters and experts is invaluable to starting a business. Your network is how you can find new clients and create word of mouth to generate cash flow. This is also how you can find a partner or consultant who has strengths in areas where you have weaknesses. “My network has been instrumental in my ability to find, identify and get new clients,” Stellitano said. “Without my network, we (at Dillinger Research and Applied Data) would be dead in the water.”
3. Time and patience. Two sides of the same coin, time and patience are critical to building a business with staying power. Time is important not only to land business but to work on lead generation such as writing proposals and grant applications. Patience is key “because in many instances, depending on your clients to set up a contract or pay their bills can take weeks or months longer than expected,” said Stellitano.
4. A plan for both business and marketing. A business plan is a formal document “helping to identify what is needed to get started with your business, including any financial needs,” Eaton said. A marketing plan is “also necessary.” That is a written strategy for how you will advertise your business and gain new clients.
5. A product or service. There is no business without a product or service for sale. You should also have experience or skills in that area. Keep in mind that “the best business to start is one that sells services, products or information that you’re passionate about,” Sanok said.
Ultimately, the willingness to invest the time and resources needed to get the business off the ground is the driver for all five of the above items, said Eaton. If you’re excited about your idea, putting in the work to realize your vision will come naturally.
How to Become an Entrepreneur With No Money
When you have the idea but don’t have the money to cover startup costs, the best thing to do is align your business idea with a skill set you already have. Choose to sell a product or service you are passionate about or that taps into a skillset you have that sets you apart.
“The news is often full of stories of entrepreneurs securing millions in funding from venture capitalists,” Sanok said. “But most entrepreneurs start their businesses out as hobbies or side gigs. Only after gaining experience that way do many people make the transition to full-time business owner.”
If marketing is not your strength, don’t worry. Writing a marketing plan is a skill that can be learned. “There are a lot of inexpensive and free tools available to help people get started in terms of promoting the business,” Eaton said. Classes on marketing can be integrated into many business degrees, as well.
While a strong business plan is necessary for every small business, they are especially important for people who start businesses without a lot of financial capital. A business plan can help small business owners find “angel investors” who may be interested in funding the business, Eaton said. You can also use your business plan to apply for grants to support your business. The business plan will show that you have done your homework, crunched the numbers and identified your needs in a logical and professional manner.
Do Entrepreneurs Make Good Money?
Without a doubt, becoming an entrepreneur takes a lot of work. You have to be willing to ride the ups and downs of starting a business, and there will be many of each. “Understanding your own appetite for risk is important, because you may have to put in your own money to cover start-up costs, and you will definitely need to put forth a lot of energy to get a new company off the ground,” said Eaton.
Of course, what constitutes “good” money is subjective. What are your goals? Are you trying to create a small business that stays small, or do you have plans to expand over time and create a larger company? When you write your business plan, you get to work out your own definition of success.
Good money or not, the first year of starting a new business can be tough for anyone. “The first year requires a bit of sacrifice to make sure the company can remain solvent, and your employees get paid,” Stellitano said.
Success can come in different forms. Making money is important because everyone has bills to pay, but there are non-tangible rewards to going into business for yourself as well. “One of the main reasons why I started my own company was because I wanted to manage myself,” Stellitano said. “My autonomy was important to me.”
Steps to Start a Small Business
As mentioned above, writing both a business plan and marketing plan are key. In addition to that, here are some other important steps, according to Eaton:
- Name your company and decide on your offerings. The starting point for any business is often with the basics. What do you love to do and what skills do you have that other people will pay to receive?
- Determine the business’ legal structure. You may need to establish your business as a limited liability company, which provides some legal protection for you. Consult with an attorney to learn more about what sort of legal protections you may need to take.
- Register the company. You may need to register your company with your state, and you will need to follow any state legal requirements for tax filings.
- Hire an accountant. Once you begin making money, you will want to work with an accountant “to ensure that you are handling taxes, payroll and necessary insurances properly,” Eaton said. If your interest lies in numbers, a business degree with an accounting concentration could be very helpful.
- Decide on your online presence. You may want to create, or hire someone else to create, a website for your company. In doing so, “you may want to purchase a URL for the company and set up any necessary social media or email accounts,” Eaton said.
While practical matters must be considered when starting your business, try not to forget that your ability to think on your feet, work hard, and be creative matter a great deal, too. “The keys to starting a small business are 50% planning, 50% hard work, and 50% being open-minded and adaptive,” said Stellitano. If you’re thinking that equation doesn’t add up, it’s a realistic look at the level of hard work you’ll need to put in to get your small business off the ground.
Above all, be sure you always take care of your people, even if you’re a company of one. “You company’s employees make your company, so make sure you are investing in them,” Stellitano said.
And remember, when starting a new business, you don’t need to become an expert on all of the variables involved. “There is an inescapable learning curve that comes with starting a business,” Sanok said. “And that is half the fun.” In the end, working creatively and efficiently with the skills you already have combined with a willingness to work hard to develop the skills you need can yield much success in the long term.
Discover more about SNHU’s online entrepreneurship degree: Find out what courses you’ll take, skills you’ll learn and how to request information about the program.
Marie Morganelli, Ph.D. is a freelance content writer and editor.
*Survey Methodology: This survey was conducted online within the United States by Kantar on behalf of Southern New Hampshire University in December of 2021. Opinions from 500 general population respondents were obtained using their omnibus survey. For complete survey methodology, please contact Megan Bond at [email protected].