Entrepreneurship means being ready to take a risk and pursue your passion. Before you make the leap forward you need to be able to answer certain questions which will guide you through the early days of running a startup.
1. Is my business idea viable?
Prior to determining if your business idea is viable, you must understand your “why” for starting a small business. This answer varies depending on the entrepreneur and their respective business. Typically, however, the why ties in with a desire to make a difference in customer lives and/or pursue an industry or field you’re passionate about.
Now, you need to figure out if your business idea is viable. You may answer this question by asking yourself relevant questions about the business. Some of these questions may include better understanding what makes your business unique and if there’s a proven demand for your offerings. Additional feedback may be found in your community of support, including friends and family, and directly with customers by conducting surveys and polls.
2. Do I have a unique selling proposition (USP)?
You have a great idea and an audience of potential customers. Now, you need to answer the question: what makes your business unique?
A unique selling proposition (USP) will allow you to determine what your business can do which others cannot do. Figure out your USP by focusing on the key strengths of your business and its ability to solve problems.
3. Did I draft a business plan?
A business plan is one of the biggest assets for a small business. This document allows you to evaluate the feasibility of the business from an objective and critical place. It acts as the foundation for which the business is built upon.
Will you seek investors to fund your business? They will want to review your business plan and discuss your financing request together.
4. What’s my business model?
How will your business make money? This answer is in your business model.
The model itself will vary depending on the kind of business you’re starting. Four specific factors will define this model. These include pricing, marketing and sales, production and delivery methods, and customer experience and satisfaction.
5. Am I ready to incorporate my business?
You do not necessarily need a corporate business structure to start a small business. Many small businesses start off as sole proprietorships due to the affordable nature and ease in filing paperwork.
Entrepreneurs should incorporate or form a legal entity, like a limited liability company (LLC), for their startups. Incorporating a business provides liability protection. The business is now a separate entity from its owner. If an unforeseen circumstance should occur which negatively impacts the business, the owner does not risk losing their home or car due to the layer of liability protection.
What else can you gain from incorporating a business? Depending on your entity formation, you may also save money on taxes. You’ll also be able to establish credibility quickly with customers.
6. How will I fund my startup?
Small businesses require a certain amount of money (often not small) in order to successfully get up and running. Funding a startup may be done through a series of different ways which may include the following options.
- Personal savings. You may use personal savings and credit cards to fund your startup. If you have Rollovers for Business Start-Ups (ROBS), you may also put this 401(k) business financing towards your small business.
- Small business loans. These may be taken out through your bank or at a credit union.
- Grants. These grants may be sponsored by the government. Small businesses may also receive private grants.
- Crowdfunding. Entrepreneurs can raise money quickly within their communities through platforms like Kickstarter and GoFundMe.
- Venture capital and/or angel investment. Your business plan is where you’ll create and keep a financing request. Depending on the kind of startup you’re running and the amount of capital the business requires, you may attract the attention of a venture capital firm or angel investor for additional financing.
7. What does success mean for my business?
Real talk: how will you know your business has been a “success?” Will it be a certain amount of revenue brought in each year? What about receiving prestigious news in the press or serving over a million customers? Every entrepreneur will determine the answer to this question a bit differently because the road to success varies for every startup. Set early goals and milestones you wish to reach in your business plan, and you’ll be well on your way there!
Incorporate your small business today. Reach out to MyCorporation at mycorporation.com or give us a call at 877-692-6772.