Starting a business requires three important things: planning, decision-making and completing legal necessities.
Write a business plan. It is important since it will serve as your guide throughout the process of setting up. Venturing into business without a plan is like competing in a game without a strategy, or going to war without artillery.
1. What to sell – It can be a commodity, an idea or a service you can readily extend to interested customers.
2. Who to sell to, and where – Profile your prospective customers. Find out why they will want to buy your product, and where they may be found. Target a specific population or demographic, like students or young professionals, and consider their evolving needs and preferences. Look at traffic in your prospective business location. Come near customer generators, like schools, business areas, and residential compounds.
3. How much you need – Make a realistic estimate of expenses, potential sales, and target profit. Be conservative with your estimate; do not expect return of investment or overtaking competition overnight. Check if you have enough money to keep you afloat until you recoup your capital.
In sourcing the funds, look at your options. Do you have enough money? Will you need help from a financing institution? Maybe you can ask someone to become a business partner, or involve family members and friends to contribute as investors.
B. Making Decisions
Explore ideas, evaluate your options and decide on the following components of your business:
1. Business name – There are no hard and fast rules here, but it is better to opt for short and simple names that are easy to remember, read, spell, and pronounce. Remember also to incorporate desired product benefits into the name.
2. Legal structure of your business – Will it be a sole proprietorship, a partnership, or a corporation? Weigh the pros and the cons of each. Consider factors like liability, cost of starting/continuing the business, transferability of the business/shares, and management control.
3. Financing your business – You need to spread out funds among production costs, distribution, human resources, and publicity. The size of the allocation depends on your sound judgment.
4. Choosing a location – Consider visibility, or prominence of your product in high-traffic places; accessibility, or ease with which customers can get your product; and affordability, or pricing that your customers will find reasonable.
5. Launching – Timing is crucial. Launching too late may mean missing out on high demand; launching too soon may cost you your reputation, especially when you have a half-baked product.
6. Hiring employees – Ask yourself: can you personally man your business, or will you ask people for help? If you hire employees, know what your basic qualifications will be. Other than skills, consider other qualities, like trustworthiness and willingness to be trained.
C. Completing Legal Necessities
Register with the government’s trade department and the local government which has jurisdiction in your area of operation. Get clearance and a business permit, apply for taxpayer identification number, and register your book of accounts. You might also need to get building occupancy permits, environmental/sanitary permits, and fire/police clearance.
It is equally important to know your responsibilities as an employer. Find out the cost of employer share in employee benefits like healthcare and social security, and register with the appropriate offices.