Despite the economic uncertainties of the past few years, the spirit of entrepreneurship remains strong, with the U.S. Census Bureau reporting a record-breaking 5.5 million new business applications in 2023, an encouraging trend that’s expected to continue into 2024.
However, the path to successful entrepreneurship is not without its hurdles. According to Shopify, nearly 50% of new businesses started five years ago have failed, and almost half of those failures occurred within the first year.
The idea here is not to discourage you from starting a new business if you have a great idea but to underscore the importance of thorough planning and preparation when launching any new venture.
In this comprehensive guide, we’ll walk you through nine crucial steps to starting a business in 2024, from initial ideation to launch.
1. Ideation and Market Research
Every business starts with an idea, but not every idea should become a business. Ideas need to be tested for viability to ensure that the business has a solid foundation. This process typically begins with a lot of brainstorming, and founders draw inspiration from their personal experiences, skills, and passions.
What sets apart the most viable business ideas, though, is that they focus on addressing gaps in existing markets. So, you have to consider what problems you could solve or needs you could fulfill for potential customers.
If you deem the idea promising, further market research into your target market, the competitive landscape, financial feasibility, and so on will give you further insights. At this stage, you must remain open to refining your initial idea based on the insights you gather.
2. Business Plan Development
Once you have confirmed through your initial research that your business idea is viable, then you need to develop a comprehensive business plan to serve as your roadmap. This step is critical when starting a business because it helps you stay focused and aligned with your long-term vision.
Developing a business plan is a further opportunity to critically and thoroughly examine every aspect of your business idea. Naturally, the process will reveal potential challenges and weaknesses, which you should then address before going ahead and investing significant time and resources.
Also, a business plan is critical for credibility, which will determine how well you will be received by potential partners, investors, suppliers, customers, and other stakeholders.
3. Legal and Regulatory Requirements
Before going too far in starting a business, you need to finalize everything related to legal and regulatory compliance. For one, you’ll need to build your business structure. Common options include sole proprietorship, partnership, limited liability company (LLC), or corporation.
Each one has different legal and tax implications. So, at this stage, you should also be speaking with a lawyer to determine the best fit for your situation. Afterward, you’ll need to register your business with your state or local government.
In addition, you’ll need to obtain the necessary licenses and permits. Requirements for those vary widely depending on your industry and location. Regarding legal and regulatory compliance, don’t leave any stone unturned; simple mistakes can backfire significantly.
4. Financial Planning and Funding
This stage involves determining your financial needs, identifying funding sources, and establishing a solid financial foundation for your venture. There are two parts to this.
The first involves your startup costs, most of which are one-time expenses for things like equipment purchases, initial inventory, legal consultation fees, etc. The second part is based on your financial projections. You need projected income statements, balance sheets, and cash flow statements for at least the first three to five years of operation.
These projections help you understand when you might expect to break even and become profitable after starting your own business. They will also determine what kind of funding options you should pursue, such as personal savings, loans, angel or venture capital investment, crowdfunding, grants, etc.
5. Brand Development and Marketing
At this point, your business must already be shaping up nicely, and you need to start getting the word out in preparation for attracting customers. Particularly, you need to create a strong brand presence that will resonate with your target audience and differentiate you from competitors.
This involves a lot of design but also goes beyond that because you need to be able to communicate your brand’s vision and mission effectively. For marketing, you should already know your target audience.
The next steps would be to choose your marketing channels, develop a content strategy, build your website and implement SEO, consider advertising options, identify opportunities for partnerships and collaborations, and so on.
6. Operations and Logistics
As you are finalizing plans on how to get the word out when starting a business, you also need to set up the systems and processes that will enable your business to function efficiently and deliver products and services to customers.
Identify and establish relationships with suppliers, partners, and clients and develop systems for interfacing with them. Note that operations and logistics processes will look different for each industry and business model. So, try to find out what exactly you need.
Also, you should establish protocols for handling customer/client inquiries and complaints. This would fall into your overall operational policies and procedures. You need detailed guidelines for day-to-day operations to ensure consistency and efficiency.
7. Hiring and Team Building
The next crucial stage requires you to bring together the right people to help your business thrive and grow. Initially, you need to assess your staffing needs to determine essential roles and skills for business operations.
To save costs, consider if some functions can be outsourced to contractors or freelancers and limit the number of full-time employees you hire. Regardless, a robust recruitment process is key and you should be looking to leverage your professional network for this, in addition to posting job listings on relevant platforms.
As you begin hiring, it’s also essential to have proper onboarding procedures in place as well as well-defined plans to create a positive work environment.
8. Compliance and Risk Management
When starting a business the importance of the legal side of running it cannot be overestimated. That’s why it appears two times in this checklist. Even after your business idea is finalized and ready to launch, you still need to be sure that everything goes smoothly.
This is achieved by developing a comprehensive compliance program that outlines how your business will adhere to all applicable laws and regulations for your industry. These might include labor laws, tax regulations, data protection requirements, cybersecurity laws, industry-specific standards, and so on.
Your compliance and risk management program would typically involve training employees, implementing monitoring systems, creating contingency plans, etc. All these should be up-to-date, and you’d be ready for launch.
9. Launch and Growth
At this stage, you are finally ready to open your business to customers. Typically, there is an initial soft launch to a closed selection of customers to test that all systems and processes are fully functional. Once all aspects of the business are ready, a full launch is held.
But this does not mean you can now rest on your oars. The first few weeks of launch can be among the most vulnerable moments when starting a new business. So, you need to closely monitor all aspects of your operations and be prepared to quickly address any issues that arise.
More so, feedback is highly critical, especially from early customers, so you can use it to refine your offerings and processes. As things stabilize, gradually shift your focus to sustainable growth, adapting your products and services based on feedback and market trends.
Ready to Take Your Business Journey to the Next Level?
Embarking on your entrepreneurial journey is just the beginning.
At StartUp Growth Guide, we’re committed to equipping business leaders like you with the knowledge, tools, and insights needed to navigate every stage of your business growth.
Dive deeper into our resources designed to help you excel in today’s competitive business landscape by reading the blog and joining our community of forward-thinking entrepreneurs on LinkedIn, Twitter, Facebook, and Instagram.
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