By Dr. Michael Marticek
Faculty Member, School of Business, American Public University
When you start a business, there are several necessary steps to ensure things run smoothly. Starting a business doesn’t happen overnight; it requires patience, creativity and hard work if you want your business to last.
Step 1: Have a Well-Researched Business Plan and Budget
The first step is generating the business plan. Developing a workable business plan takes some time, because you have to gather information to complete it.
A business plan outlines the products, services, operations and funding needed to sustain the business. It helps the business owner or stakeholders to get a sense of what is needed to make a profit.
During this step, conduct research in order to gain a sense of your business. Use a Strength, Weaknesses, Opportunities and Threats (SWOT) analysis to outline your company’s qualities and liabilities. You’ll need to understand your key competitors and what makes your company different as compared to others.
Also, plan your budget. You should maintain a budget to keep your business within the guidelines of your business plan.
Step 2: Create a Marketing Plan
Once you successfully create your business plan, then the next step is to work on your marketing plan. The marketing plan should address your company vision, goals or objectives, target market and growth potential.
Decide on your specific area of growth, such as the West Coast or East Coast. Once you establish the area you serve, your business can focus on that target market.
Marketing campaigns, including Internet marketing, cold calls and email advertisements, generate customer interest. Also, create ads and use them with Google AdSense, which allows you to share an ad, reach the right audience and connect with consumers. Google also uses AdSense to generate data on shopping trends via Google.
You could also use a special lure to capture additional revenue, similar to Pokémon GO. This type of marketing generates Web traffic for a low cost, based on its potential to lure consumers into your front door and increase your sales.
Pokémon GO increased business for many small companies based on current trends. However, be aware that once consumers’ interest fades and is lost, your business will need another way to attract customers.
Step 3: Consider Your Marketing Strategy and Target Audience
Think about target market strategy and what will work best for your product or service. One strategy may be the broad one: reaching all types of consumers.
Starbucks is an example of a broad-strategy company. Starbucks sells teas, coffees, mugs, food and gift cards in their stores to appeal to all customers. They also have partnerships with various companies, such as Pepsi-Cola.
The second strategy is the niche market, which allows you to reach a unique market or consumer. Snap-on Tools is an example of this type of company.
Snap-on Tools markets tools to mechanics, but they offer a unique delivery system, using drivers who show up on the customer’s doorstep. The third item that may be used is considered the best cost approach, which is a low cost, but high quality product. One example would be Honda automobiles, which is low in cost, but has a high quality and standard in the eye of the consumer.
These target market strategies have a specific function and can assist you in reaching your target audience. Overall, your strategy depends on the type of products or services you offer.
Step 4: Hire the Right Employees
Employees are another key element for launching a successful business. You may need to hire a sales team, IT managers, financial managers and front-line employees. However, hiring the right people with the right technical knowledge is not an easy task to accomplish.
One method is outsourcing, which allows you to stay focused on growing your business but gives you some flexibility in meeting your employee needs.
Another popular method of acquiring employees is through Web-based job sites, such as Indeed.com or CareerBuilder.com. These websites allow you to upload a job listing for a fee. However, the fee depends on many variables, including the duration of your job listing and its length.
You also have the option of going directly to a university or college. The school’s placement team can find someone who is a good fit for your position.
All three methods of finding employees can be successful, but some hiring methods cost more than others. Most small businesses use Web-based recruiting as a quick tool to upload job information and post the job within minutes. This is a quick method of advertising a job opening, but it can lead to hours of sifting through hundreds of resumes that do not fit the job description.
Step 5: Have the Right Business Structure
One of the final steps needed to ensure success for your business is the proper business structure. Typically, there are three structures for a small business:
- Sole Proprietorship – Business owners are self-employed and the business is easy to set up. However, there is much more personal risk if a customer or vendor sues your business.
- LLCs – Business owners are self-employed individuals and subject to self-employment tax. There is less risk with liability.
- S Corporations – Business owners are also shareholders. S Corporations are not taxed, but their shareholders are taxed. Also, these businesses appear more permanent in the eyes of the public.
Most companies, depending on their products or services, will want to start as a LLC, due to the liability risk involved in starting a business.
Step 6: Take Your Time, Plan Ahead and Do The Work
Each step of starting a business is vital to its success. By working hard, doing the proper planning and going through all of the necessary steps, your business is more likely to do well in the marketplace.
About the Author
Dr. Michael Marticek is a part-time faculty member in the School of Business at American Public University. He has a D.B.A. from Walden University and a M.B.A. from Strayer University. He has been teaching since 2010 and has spent over 10 years in management.