This guide is not intended to be a complete guide but a look at the basics of starting a business.
What is the best way to start a business? How does it grow? What is it that drives people to succeed?
What is a business?
While we all know what a business looks like, how do we define it?
You can search across many sources to find a variety of definitions. It is listed below by Chambers Dictionary:
Business noun 1 The buying and selling goods and services.
This is the common thread among all definitions: buying and selling. It doesn’t really matter what end product the company produces or what service they provide, what matters is that someone wants it to be bought.
No matter how lofty their mission statement may be, the goal of any business is to make money. They must offer something other businesses and customers would be willing to pay money for. Not all businesses are looking to make a profit. Although a charity can be run like a business, they must still be able generate an income stream.
What is the best way to start?
I won’t go into detail about how to form a business legally, either as a limited company or partnership. Let me just focus on the idea of a business.
Every business starts at the same location. An idea.
The idea must be able to generate a market. An idea without a market value is nothing more than an idea. Market value refers to the price people will pay for your idea. It can be a tangible product or intangible service.
These ideas can be from anyone. Many ideas come from people who are already in an industry and see a gap in the market they can fill. Some are inspired by the archetypal inventor who created in his garden shed something new that is unheard of. Many will leave you wondering, “Why didn’t I think of this?”
How do you go from idea to business?
This is the most difficult part of a business. How do you bring your idea or wonder product from your mind to reality and make a profit?
This is the crucial part that will make the difference between a success and a failure. Research. Research.
You need to determine the target market, competition, price points, costs of providing the product or service, advertising, overheads, and work out margins that will allow you to make a profit without being priced out of the market. Before you can even begin the process of setting up functional businesses, it is important to do all of these things well.
It is because investors and creditors require a complete business plan before lending money to a business. It takes a lot of dedication and effort to get that idea functional.
Start a business
The plan is in place. Profits are plotted and there is even a graph that shows exactly when and how much they will be.
Next, your investors will need to invest.
It doesn’t matter how small the investment is, whether you rent an office or copyright your company name. Or how large it is, building a factory that produces your product and then training and employing all of the employees to run it.
Small businesses often start out with the savings of their founders to get started. Others will need to borrow money from banks to expand their business.
This will be the most costly period for your business. There is always a period before you can make any returns. After the initial investment is made, the returns will start to come in. However, any profit must be earned before further growth can occur.
Stability is the first goal for any company. Stability is the ability to get the business to a place where it isn’t losing money. While every company wants to make a profit as soon as possible, stability is much more important.
A boom period in a new company can result in extra growth and expense that the business is unable to support. A slower period after this can cause financial problems.
Stability means there is enough time to think about future growth and new strategies without feeling the need to worry that money will be lost every minute. Only then can you make the right decisions for the future.
From Business to Success
The stories of giant corporations growing from small businesses to large ones, such as those of Apple and Google being started in a garage or Facebook being founded in a student’s bedroom, have a certain mystery. While it is certain that luck is necessary, it is equally certain that luck alone will not allow a business to grow to such an extent.
One thing is certain about all successful businesses: they made the right decisions. The right decisions were made by the people in charge to ensure that the company is growing, thriving in competition, and investing wisely. Although not everything has been a success, their organization and planning have enabled them to manage this.