Posted by: Robin Gronsky | July 18, 2012

What Are the First Steps to Starting My Own Business?

Sometimes you have an idea for a new product; sometimes you want to quit your corporate job and strike out on your own.  What are the first steps to starting your own business?

The first step should be some market research.  You need to know that your new business will have customers.  Who will your customers be?  You also need to find out who your competitors are and what they are doing.  Is your market saturated with others doing the same type of business that you want to open?  Is there something unique about your service or product or how you want to deliver your service or product?

Once you establish that you will potentially have clients/customers, you need to examine your finances.  It is unlikely that your company will make money for the first few months or even years.  You need to have a cushion of cash to get you through the lean times.  From where do you get the funds you need to start your business and keep it going?  Hopefully, you have savings.  If you don’t have savings, you need to figure out how you will raise some cash.  Many entrepreneurs start by hitting their credit cards for cash advances.  Or they ask for loans from their parents or siblings.  Don’t ruin your relationships by asking for large sums of money to start your business. 

Get your team together.  You want some paid professionals to give you advice (your accountant, lawyer, insurance broker) and some unpaid mentors, people who are successful business owners (hopefully in your field) who can show you the way to success.  Ask questions of your team so you are not floundering.

If you are creating a product, you need to line up your suppliers.  Are they local or overseas?  What would you do if they went out of business – do you have back-ups to call on?

If your business requires a location, figure out the cheapest location you can find that fits your needs.  If your business will rely on foot traffic, you must choose a storefront on a main street.  Side streets will have cheaper rents but may not provide the number of customers that you need to survive.  If your business does not need a storefront, you may be able to work out of your home or garage.  You can sublet cheap office space or use a friend’s conference room when you need to meet with a client.  Make sure your business is not violating any zoning laws.

Should you incorporate or form a limited liability company?  Do you need any business licenses to comply with state, county and municipal laws?  If you are not sure, consult with a business lawyer.

Keep circling back to your team to ask questions every step of the way.  Very few start-ups make it totally on their own.

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