Most successful small businesses start out slowly, with lots of business planning on every aspect of the business. After setting up clear plans and refining them, entrepreneurs then hit-the-ground-running when they finally open for business.
Those who have a burning desire to start a company but little business experience might opt for a franchise. When starting a franchise, the planning phase lasts approximately one year, with each month devoted to a specific aspect of operations. This guide to starting a businessused by franchises can also benefit individual startups or business ventures that are open to adopting it.
Let’s take a look at some things to consider when starting your own small business.
5 Steps to Success
Step # 1. Decide on the Business Model
When it comes to business models, there are three models that have proved to be highly successful: franchises, startups, and business ventures.
According to Investopedia, “A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business’s (the franchiser) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business’s name. In exchange for gaining the franchise, the franchisee usually pays the franchisor initial start-up and annual licensing fees.
According to Neil Blumenthal, the co-CEO of Warby Parker, “A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.”
And according to Business Dictionary, “A business venture may also be considered a small business. Many ventures will be invested in by one or more individuals or groups with the expectation of the business bringing in a financial gain for all backers. Most business ventures are created based on demand of the market or a lack of supply in the market.”
While the distinction between a franchise and other types of business models is clear, many people think “startups” and “business ventures” are synonyms. It’s important to get some clarity on the type of business you are planning to start.
Step # 2. Brainstorm products or services
Once you’ve decided on the type of business, it’s time to brainstorm the products or services that you will offer.
Once you’ve figured out what you business will do, then the next thing is to brainstorm how you will go about doing it. How will you source the products? How will you sell it? And how will you manage it?
Step # 3. Create a business plan
Now that you’re clear about type of business and what the business will do, it’s time to organize everything into a business plan.
Here are some initial questions to ask when developing your business plan:
- 1. What type of business do I want to start? A franchise? A startup? A business venture?
- 2. What is the purpose of my business?
- 2. Who are my customers?
- 3. What are my long-, medium-, and long-term business goals?
- 4. How will I raise the money I need to start and how will I organize my finances.
- 5. What talents do I need to hire to help me with operating the business?
Answering these and other relevant questions will help you flesh out your business plan.
Step # 4. Fund your business
The more money you can raise to start your business, the more resources you will have available to grow your business faster.
Begin by creating your ideal scenario on everything you will need to run a fully-equipped and well-staffed business. Next, research all possible ways of raising the money you need. Besides traditional ways like a bank loan, borrowing from family and friends, using your lifetime savings, and asking for help from government agencies, also investigate alternative lending practices, like angel investors, business partnerships, and crowd funding.
Step #5. Put the final details into place.
The final things you have to do are to decide on your legal business structure, register your business, buy all the necessary insurance, and get busy hiring talent and equipping your office or store.
Take Decisive, Informed, Persistent Action
It takes courage to build a business, and the more you know about what to do and how to do it, the greater your chance of success. Many obstacles will inevitably come up, but with enough grit and determination, it can all happen for you.