Are you a founder looking to start your own business? We know how difficult it can be and the pressure to get the first step right. Because the journey of a thousand miles begins with a step. So, yes, it is important to get that first step right. But we are here to help with not one but five steps on how to start a successful business. 

The ideas we will introduce in this article are not ultimatums but rather guides you can follow to ensure that you don’t miss that first step. 

1. Have a plan

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Benjamin Franklin said, “if you fail to plan, you are planning to fail”. Being that this is coming from one of the most successful men in history, we better believe he knows what he is saying. Planning helps you to think ahead and account for nearly every scenario before they even occur. Also, with a good plan, you can save yourself the pain of an avoidable mistake. And what is involved in business planning? 

Market research - Before you do anything else, you need to carry out exhaustive market research. This will give you a good knowledge of your target market and the market gap that exists. With this knowledge handy, you can move to the next stage of your plan. 

Idea generation - All it takes is one good idea. After you have identified a market gap, then it is time to think of how you can fill this gap. This could be by offering a product or service. But it is worth knowing that the idea generation and market research steps can be interchanged. In some cases, you may have a really good idea before proceeding to do your market research. Whichever is the case, the goal is to have an idea that is both unique and valuable. 

Have an exit strategy- As a startup, you need to include an exit strategy in your plan. It may sound counterintuitive but having an exit strategy doesn’t mean giving up on your dreams of becoming an entrepreneur. But it forces you to think about the future of your company and your desired outcome. This will help you to adjust your (next/ future) steps accordingly.

“However, having a good plan alone does not guarantee success. But not having a plan is a recipe for failure” 

2. Get your finances sorted out

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With a good plan on the ground, the next thing you need to sort out is your finances. A startup requires huge cash inflows since it may not be profitable for a while. Within that time, you must ensure that you have enough money to cover the operational cost. 

There are many ways you can fund your startup. Common ways are taking loans from family and friends, taking loans from banks, via credit cards, angel investors, and venture capitalists. Here are steps you should take to sort out your finances;

Do a break-even analysis - Break-even analysis is a financial tool that will help you know how long it will take for your company to become profitable. It will also help you to estimate the number of products or services you have to sell to become profitable. With these estimates, you can then calculate how much money you need to keep your business afloat until it becomes profitable. 

Be mindful of your expenses - How you spend your money matters as a business owner. You need to follow your financial plan to avoid running out of money. Also, don’t let yourself be sidetracked by the latest gadget or feel overconfident about your success that you become negligent of your expenses. Here’s a rule of thumb you can follow;

 “ if it doesn’t add direct value to your business and you can do without it, you don’t need it.”

Where will the funds come from - You may have plans of using your savings to start your business, but this is not very reliable. It is always good to have additional funding sources and while most people turn to friends and family, there are many other reliable sources where founders can get funding for their business. Check out our article on funding sources to learn more. 

3. Build your team 

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Teams are much more than just people working together. They are the very foundation of the company and they will also determine what will become the company’s culture. So a founder needs to find people who are driven and share the same passion for the company and product. When deciding on who to join your team, here are 10 qualities you should look out for;

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(Source: Forbes)

4. Get the legal aspect out of the way

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There is a saying, “nobody likes a lawyer until they need one”, this should not be you. As a founder, you have to deal with a lot of legal issues and the first among them is choosing a suitable legal entity for your business. These could be either a Sole proprietorship, a Partnership, a Corporation (S, B, or C-Corporation), or a Limited liability company. While most startups register themselves as C-Corporations (or C-Corps), it is good to consult an expert to know what is best for your company. 

5. Register your business

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After you have decided what class of business entity your company falls under, you can then proceed to register the company. Depending on your country of residence, you may need to register with either the Federal, State, or Local government, or all three. Again, you will have to deal with a lot of paperwork so it is always best to seek the advice of an expert.

Final Note !!!

We have discussed five steps to follow if you want to start a successful business. When it comes to legal aspects and business registration, the procedures differ depending on the country where you want to register your business. However, these steps should give you the basic idea of where to start in your journey to becoming a successful entrepreneur/founder. For more information, you can reach out to us at Epirus Ventures and we will be happy to help. 

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