9 STEPS TO STARTING A BUSINESS

🌍CONDUCT RESEARCH 

Doing market research helps an entrepreneur to know the type of business he/she wants to start up and create more ideas for it to be successful. 

By gathering information, it helps to know what kind of goods and services on offers to the customers in that operating area. 

By doing this, an entrepreneur is able to spot competitors within, know potential centers and note the needs of customers in that geographical area. This needs may include ; 

 - Demand of goods and services desired by customers 

  - Market size. People interested in the goods and services you are offering. 

  - Economic indicators. Income range and employment rate in that particular area.

  - Pricing. Potential customer willing to pay for the goods and services. 

  - Market saturation. How many similar type of businesses are available in that geographical area. 

  - Location. Where your customers stay and where they can reach your business. 

You can also conduct research by use of :

  - Questionnaire 

  - Surveys 

  - Group focus 

  - Interviews. 

🌎BUSINESS PLAN 

A business plan can help you prepare for every aspects of your business. This booklet should entail details of the products and services you plan to offer to your customers, how you plan to make money, who you need on team and how you manage your business. 

It helps on to show it to potential investors and lenders in future. 

The following is process of writing a business plan :

       1. Description of your business or company. This should include the business registered name, address of your business and the names of the key people in company ( expertise among members of your team). 

       2. Business goals. This section explains the objectives of the company and spells out accomplishments in future both in short term and over the long term. 

Also includes the loans either currently or future loans, investments, commissions, debts and credits among others. 

       3. Describe your products and services. Details of products or services you offer should include of the following ;

         - An explanation of how your products or services work. 

         - The pricing model of your products or services. 

         - The typical customers you serve. 

         - Your supply chain and order of fulfillment. 

         - Your sales strategy. 

         - The distribution strategy. 

       4. Performance financial analysis. This includes income or profits and losses of the business. You may also add metrics such as ;

          - Net profits. This is the percentage revenue you keep as net income. 

         - Current ratio. This shows measurement of your liquidity and ability to repay debts. 

         - Account receivable turn over ratio. Measurement of how frequently you collect receivables per year. 

       5. Write an executive summary. This a page you think of elevator pitch. It should include mission statement, a brief description of your products or services offered and finally a broad summary of your financial development and growth plans.

🌎FACTOR OUT PROS AND CONS 

After analyzing the market and planning for the business, one should understand the kind of time and emotional energy needed to invest in the company and consider the strength of your entrepreneurial drive.

For example you would like to become a web developer, the most significant contribution to the business will come from your skills and knowledge. Though you may have a support team for billing or scheduling, the face of the company will you and your web development. 

Most business owners who become successful are self-driven and willing to make sacrifices and taking risks to improve. In this most entrepreneurs set short and long term goals that can help them focus their energy and help see recognizable achievements in the business. 

🌍FUND YOUR BUSINESS

 A business plan helps in calculating how much one needs to start up a business. You may fund your business by borrowing from :

       -  Friends and family for extra money. 

       - Getting a loan from banks or sacco 

       - Searching for grants or local funding 

       - Encouraging angel investors to back your business. 

There are also other ways to get your business funded. These includes :

       - Freelancing 

       - Child care 

       - Shooting videos among others. 

🌍Secure funding for your business.

In creating your business plan, you’ll get a strong sense of the amount of money, or overhead costs, you’ll realistically need in order to run your business. The next step would be to secure that necessary funding.There are a number of ways that you may consider funding your business. Some common options include:

• Personal savings: Using your personal savings to fund your business, also called “bootstrapping,” is essentially investing in yourself. If you have a solid amount of savings built up, using your own money to start your business could allow you to maintain total control. However, it’s worth noting that self-funding also comes with the risk of your investment not panning out according to plan.
• Business loans: Securing a business loan is when a bank or credit union gives you a set amount of money that you will eventually be required to pay back. Business loans allow you to retain control over your business, however, you will often be required to pay back the loan on a set schedule and with interest.
• Investors: Investors are people who will provide you with seed capital to start your business in exchange for some kind of return, often in the form of equity or a role in your company. Unlike a loan, investors typically do not expect direct payback for their investment, and you may lose some control over your business depending on the investor’s desired level of involvement.
• Grants: Business grants are sums of money given to businesses with no expectation of a return. Many grants list out a series of qualifications, and if your business meets those qualifiers, you can apply for the grant. Not everyone who applies for a grant will get the grant, but if you do, it’s essentially free money for your business. Grants can come from the government, corporations, associations, or a number of other types of organizations. You can start your search for grants at Grants.gov, or with an internet search for “small business grants.”
• Crowdfunding: Crowdfunding is a set of small donations from family, friends, and other people willing to contribute to the growth of your business. It’s a less traditional funding model that allows you to set the terms for repayment, if any, while retaining total control over your business. Some popular crowdfunding sites include Kickstarter.
• Choose your business structure.

A business structure is the first step in building your company’s legal set-up. In choosing your business structure, you determine how you’ll file taxes and your legal protections and liabilitie.There are four key types of business structures:

• Sole proprietorship
• Partnership
• Corporation
• Limited liability company (LLC)

🌍Sole proprietorships

A sole proprietorship is a simple business structure in which one person is responsible for all daily operations. This structure does not create a separate business entity, meaning business assets and liabilities fall under your personal assets and liabilities.Since this structure links business and personal assets, sole proprietorships are best if you are launching a low-risk business and will not be seeking outside funding.

🌍 Partnerships

A partnership is similar to a sole proprietorship but used when there are two or more business owners sharing responsibilities. In a partnership, the business assets and liabilities are shared under the partners’ personal assets and liabilities.

🌍 Corporations

A corporation creates a separate business entity from its owners. These are a bit more complex to establish but offer more legal distance between a business and its owners’ assets and liabilities. There are also more laws regarding the way a corporation operates.There are many types of corporations—including C corps, S corps, B corps, and nonprofits—and each type has its own legal requirements. Many people who start a corporation will consult a legal advisor to guide them through the process of establishing and running their business.

🌍 Limited liability companies (LLCs)

An LLC exists somewhere in the middle of a sole proprietorship/partnership and a corporation. This structure offers some protection of the owner’s assets and liabilities, while still limiting tax and legal requirements.Still, people who start an LLC will often hire legal support as they work through the set-up process to ensure compliance.Read more: Your Guide to Small Business Accounting

🌍Register your business.

Registering your business is the thing that will make it a real, legal entity. Registration requirements and processes will vary depending on where you’re located, as you’ll likely need to comply with a series of federal, state, and local processes.You will likely want to register your business name and apply for a federal tax ID. You may also want to file for a trademark or apply for a state tax ID, depending on where you will be conducting your business. You can decipher the various registration needs for your business using guidance from the US Small Business Administration's website.Registering your business will be important as you seek to open up bank accounts, apply for business licenses and permits, and legally begin operations.

 🌍Apply for licenses and permits.

In order to launch certain businesses, you’ll need to acquire federal and state licenses and permits.Businesses that require federal licenses or permits are those with business activities regulated by a federal agency, such as serving alcoholic beverages; working with agriculture, wildlife, or fishing; broadcasting; or operating large vehicles. Check with the corresponding federal agency to learn more about the necessary licenses and permits for your business.More businesses are regulated on a state level, such as construction, dry cleaning, plumbing, and retail. Check your state’s website to learn more about the types of licenses and permits your business may need. 

🌍Open a bank account.

Opening a bank account for your business that is separate from your personal account can help keep your finances organized. With some accounts, you may also have the option to open a line of credit for your business, and if you plan to hire employees, you can authorize them to access the accounts, should they deal with your business finances.Along with your business bank account, you may want to open a business credit card for larger purchases and regular business expenses

 🌍Get business insurance.

Business insurance will protect you and your business in the event of any accidental or unexpected incidents, such as theft, damages, and lawsuits. The type of protections you may require will depend largely on the type of business you are running and how you expect to run it.In general, you’ll likely want to consult an insurance agent to help you assess risk, determine the type of insurance that would be most appropriate for your business, and find policies that will fit your budget and coverage needs. An insurance agent can also help you interpret whether your state requires any specific insurance coverage.Some common types of insurance for small businesses include:

• Business owner’s policy
• General liability insurance
• Professional liability insurance
• Business income coverage
• Commercial property insurance
• Workers’ compensation insurance
• Data breach insurance
• Hazard insurance
• 
  
• 🌍Prepare for launch.

With your preliminary logistics settled, you are well on your way to starting your business. For additional insight into the process of launching your own business, check out the Entrepreneurship Specialization from Wharton School of Business. Through five courses, you’ll learn more about developing your idea, launching your business, proven growth strategies, profitability, and more.As you approach your launch, you may find it helpful to organize your marketing efforts and start getting the word out about your business. Consider launching a website, advertising your services at local events, or turning to social media.