15 simple steps to consider when starting a new business

If you are thinking of starting a new business, then you’re definitely not alone. There are 582 million entrepreneurs in the world. As you plan ahead, there are a wide range of factors to consider. From building financial projections to acquiring an employer identification number, consider these factors when starting a new business this year. 

What to consider when starting a business

90% of new startups fail, yet 82% of businesses that fail do so because of issues with cash flow. An excellent concept and well-researched financial strategy can put you on the path to success in the modern market. Read on for the top 15 things to consider when starting a business.

1. First, start with a great idea

The core of any successful business is the concept that started it all, but your business idea must be clearly defined. Before you get started, determine exactly what problem you’re looking to solve in the market. 

Every startup business should clearly define its place in the market, and how its idea stands out from the competition.  Once you have done this, improve on your initial idea by identifying specific skills that will help you to offer the right solution. 

2. Then, do your research

Before filing for a sole proprietorship, evaluate the current status of the market, competitors, and your customer base. Extensive research allows you to determine where your business idea can best serve the broader professional landscape.

3. Look into competitors 

It is absolutely essential to analyse your competition so you can set yourself up for success before you’ve even entered the arena. Detailed knowledge of the strengths and weaknesses of other businesses in your market will serve you well as you strategise.

Evaluate competitor pricing structures, market strategies, social media, and any other public information that could provide additional context. If they have public customer feedback, see what their consumers are unhappy about, and build on it. Be sure to pay attention to any competitor mistakes, which you can learn from and avoid moving forward.

4. Assess demand in the market 

Once you have evaluated the competition, the next step is to clearly define the demand for your product in the market. Evaluate your customer base, growth potential, and project the general market share that will benefit from your products or services.

You can start by assessing who your potential customers are. Local businesses can easily consider polling the public in the area to determine the preferences of a target audience. For international ventures with teams abroad,  keep in mind any relevant regulations that may differ from what you initially expect. 

In our increasingly virtual landscape, distance shouldn’t pose any problems. Consider using social media tools to evaluate customer preferences on a high level through online polls and surveys. 

5. Seeking mentorship is a good idea

When unexpected challenges arise, it’s time to start consulting a mentor. An expert or mentor can be invaluable when you encounter any issues, particularly when launching small businesses. Seek out industry experts from similar types of businesses for guidance, and consider requesting a one-on-one consultation. 

Leaders in the field may be open to informational interviews where you can inquire about their professional path and experience. To collaborate with a wider group, seek out workshops and startup panels in your area where entrepreneurs share their expertise. When your business is booming in a few years, be sure to pay it forward to the next new business founder that could benefit from your experience.

6. Plan ahead with your finances

Early financial decisions can have a drastic effect on the outcome of your new business. Start with a strong business plan that can illustrate exactly how much money you will need to start your business. Make sure you allow for a ‘buffer’ of funding to allow for unexpected costs. Then, proceed to raise funds or borrow capital to achieve your goals. Discover how to manage debt, build a safety net, raise capital and project your finances to build your business. 

7. Build a strong business plan

With startup funding growing by 50% across the board between 2012 and 2017, a viable business plan is vital to attracting capital. Writing a cohesive business plan is the foundation of any large or small business administration. This document outlines company structure, hiring strategies, and growth potential. Evaluate your startup cost, and make sure your projections clearly accommodate multiple growth trajectories and business structures. 

There are lots of great business plan templates online, and LivePlan is one of the best. It has a whole host of features to help budding entrepreneurs craft killer business plans and develop and grow once their businesses are up and running. 

8. Learn how to fund your business

Sourcing ample capital is critical to your success, and startup costs vary depending on the business. Large and small scale businesses alike must determine exactly how much funding is necessary to launch. With the right accounting system in place to keep track, it’s vital to start gathering funds immediately.

There are three ways to source funding, including self-funding, investors, as well as external loans. Leveraging your own financial resources can be appealing because you will not need to depend on outside lenders. A comfortable amount of savings is a support system that can prove invaluable when unexpected costs arise. 

However, be extremely cautious to not drain your own personal resources. In an increasingly volatile market, avoid using your retirement funds for immediate gain. Investors, on the other hand, support your business through venture capital investments. This is usually in exchange for a partial ownership stake in the company itself.

Crowdfunding – through sites such as Crowdcube and Seedrs – allows you to attract investments in smaller amounts from more people, who are likely to be enthusiastic about your business idea and could well turn out to be your first future customers.

9. Attract investors with growth potential

According to the GEM Global Entrepreneurship Monitor, 45% of startups fold due to lack of capital or profitability. Therefore, it is vital to attract investors in order to gain capital and help support your business endeavors. Be ready to pitch your company’s growth potential, scale, and relevant experience for other professionals who are evaluating your company as a viable investment opportunity.  

10. Delegate responsibility and resources

It is essential to delegate and direct your energy to the right tasks – especially when you’re just starting out. Once you have established a solid financial base, pick a location for your business, hire staff, and carefully select what technology you will need to provide your team. 

11. Consider a virtual address to save money

One of the most important things to keep in mind when starting a business is the location. Consider using a virtual address for your company to save money while benefiting from having a physical address in an urban area. A virtual office allows you to have in-person meetings, a telephone-answering service and mailing address, for example, at a lower cost than having a dedicated full-time office for your company.

12. Build a team to help you

It’s also essential to hire staff members to help daily operations run smoothly. If your budget permits, hire supplemental support staff that you can delegate tasks to. Don’t hesitate to start small. Even a single assistant that can also answer client phone calls can free up your own schedule to handle high-level tasks and projects. 

In a startup’s early days, you and your employees are likely to be wearing a lot of hats, but as you grow, you can appoint people with specific skillsets. Consider dedicated social media staff, finance and HR personnel, an office manager and the like. This will allow you to focus on the big picture of your business.

13. Continue to adapt your strategy

When your business is just starting out, you should be prepared for the unexpected. Whether you struggle to source initial capital or need to adjust your product, challenges are inevitable. Don’t hesitate to pivot if something in particular is not working for you, your customers or your team.

14. Seek out feedback

In today’s age of instant social media feedback, your customers will not hesitate to let you know if they are unhappy – or, hopefully, happy – with what you are offering. Your staff are the frontline, who will know if something isn’t working. Make sure you listen to them.

15. Above all, remain resilient

In the wake of the Coronavirus pandemic, hundreds of thousands of businesses around the world have had to adapt to a remote work environment. This shows just how resilient small businesses can be. If you continue to change with the times, your business strategy can survive tough periods, and even thrive. Navigating the world of starting a business is never easy. With advanced knowledge and the right tools, you can set your new business up for success this year. 

Now that you've learned about the 15 simple steps to consider when starting a new business, check out our guide to the simple steps to take for effective decision making.

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Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.

Your complete business toolkit

Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.