Eight Practical Steps to Starting a Business

It’s not how many hours you work nor is it how many hurdles you must overcome, rather business is about getting from point a to point b in the quickest manner possible while maintaining product quality and healthy margins.

Often, when starting a business, entrepreneurs think too much about small details. Since time is our most valuable asset, this carries a high opportunity cost.

As a matter of fact, a business can be up and running in a much more timely manner than most think. I want to inspire you today by giving you 7 practical steps to get you there:

Step 1: Determine your offering and market demand

Entrepreneurship is not about hitting a home run; trying to create the next “big thing” has a very poor risk / return rate.

Instead of long shot, pick a job. Think, what do you want to do for a career? Determine what you want to sell based on what you’re passionate about rather than what you think will make money.

If you love what you do, you’ll find ways to make money from it. Conversely, if you chase money, you’ll end up unhappy and worn-out. Also don’t start with an empire. Start with one thing that makes money and do it well.

Step 2: Determine your business model

Use something like the business model canvas or a good planning methodology to figure out how you are planning to make money. Buying low and selling higher, providing a service, connecting people – all of these have business models. Find out how people make money and clearly document how you are planning to make money – by providing something that someone wants to buy.

Step 3: Determine your pricing

If you’re a newcomer, don’t be afraid to price yourself under market. You could always raise your pricing in the future, but when you’re “green” you’re a risk to a client so give them some motivation to use your services. You must however still make money. Anything worth doing is worth doing for a profit.

The most profitable businesses that exist today all compete on price while maintaining quality. When you are small your overheads are low and you can win on being more flexible and agile than your competitors. When volumes go up, the overhead increases and then you focus on quality. When you grow – you need to innovate and always focus on getting more market share.

At first, worry about living expenses and getting through the first few months and obtaining those initial clients. Once you get some work under your belt, become more concerned with how much you can charge.

Step 4: Determine how long it is going to take to make your 1st sale

If it is going to take 6 months to initiate a sale, have a year’s worth of income to live off of. Remember that your cashflow is in your customers pocket. You need to find ways to get it out of there.

When it comes to budgeting, always play it cautious as shortage of money and chasing after unrealistic goals will lead to significant stress which hurts performance.

Step 5. Determine your differentiators -Besides price, how does your product or service differ from competitors? You must sell these diffentiators and keep on innovating to have more differentiators.

In any service based business, self-assurance and trusting one’s intuition is a differentiator in of itself.

In time, you’ll learn what aspects of the product or service are important and secondary to the client. Until then, think price and quality.

Step 6. Figure out how to get leads! Make it simple and put up a website. Read about PPC and SEO. Advertising, sales calls, referral business and having excellent service are all very important.

Step 7: Learn how to sell

The best salesmen / saleswomen don’t sell. Instead, selling can be broken down into two different parts:

a. Listening – Too often, sales professionals think about what they are going to say next rather than focus on what the other individual is saying. I’ve come to learn that keeping your mouth shut and ears open is about 70% of sales.

b. Knowing what you’re talking about – Running a recruiting firm, I’ve learned the difference between the average and wealthy sales professional or entrepreneur is that they can create realistic expectations for the client through gaining the client’s trust via your expertise.

The entrepreneurs who “Yes” to death end up letting their clients’ expectations get out of whack and, in turn create a relationship where only arguments, not money exchanges hands.

The single most important question in sales is how you are going to target your market effectively. The way to measure it is by the number of leads you have and what you are doing to convert them into paying customers.

Step 8: Learn how to execute the steps needed to take project to completion

Finally, put a set, organized process in place to take the service or product from start to finish in a predictable manner that yields the desired results. Think: Step A, Step B, etc. I find that starting with the end and working backwards helps.

So those are the eight steps that I believe is critical to starting a business. Starting a business is fun, challenging, very rewarding and also hard work. May you have great success starting your own venture.