Have you been kicking around a business startup idea for a while now? You’re not alone. A lot of entrepreneurs sit on their ideas for months or years before taking action. Some people can’t find the time to start a business because they work 40 hours a week and have a family. Some are scared to take the plunge, while others don’t know how to set their business idea in motion.
Whatever is holding you back, we’ve put together a to-do list for all the hopeful entrepreneurs out there. When you’re ready, this list will guide you through the planning stage.
We asked Katherine Long, who just opened an online design agency, to help walk entrepreneurs from the idea stage to the planning stage.
1. Create a business plan
One of the best ways to make your business a reality is to put pen to paper, or in this day and age, fingers to laptop. A business plan will help you define what your business is, how you’ll attract customers, what your goals are, plans to reach those goals, and outline the structure of your business.
Writing and preparing this document forces you to organize and flesh out your business idea. To help you create this document, check out our free downloadable template. You might also consider LivePlan, software designed to make a customized business plan for your new company.
2. Know your market
You have to know if there is a demand for the product or service you plan to offer. You have to know the industry inside and out. Scope out your competition and determine what makes your business different. Look into viable prices. Will people pay the price you want?
Long says this is one of the most important steps. She actually picked up the phone and called people to see if they were interested in finding a design firm to work with. Once she completed her calls, she knew there was a market for her services.
3. Create a test product
Whether you’re selling widgets or offering virtual assistant services, you should give your business a test run, Long suggests. Have the product made and let some friends try it out. Ask for feedback and tweak the product if needed. If you offer a service, consider working with a local charity for a few weeks to give your business a test drive.
4. Estimate startup funds
Every startup requires initial funds and you’ll want some solid estimates before you move forward. Gauging startup cash can be tricky, but we have a starting costs calculator that can help. In addition, you’ll want to check out a recent article on this very topic.
Once you’ve figure out how much you’ll need to open your doors, you need to figure out where that money is going to come from. Do you want a bank loan? Do you have enough saved to support the business yourself? Will you find investors or ask your friends and family to pitch in? Figure out which option suits your business.
5. Mentally prepare yourself
Starting a business isn’t easy. You’ll put in some long nights and wonder if you’re doing the right thing on a regular basis, but Long says persistence will pay off. In other words, be prepared. Do all of the homework listed above and be ready to deal with setbacks. Every entrepreneur faces rejection or unforeseen problems, so be ready to tackle issues head on.
Once you’ve completed everything on this to do list, evaluate your findings and decide if you’re ready to turn your idea into a reality.