If you’re an aspiring business owner, you most likely understand that you have to start somewhere before you see success. Thinking about taking nothing and turning it into something can be overwhelming, but it doesn’t have to be.
The way to ensure your business is successful is to set high, yet realistic, expectations from day one. The keywords are “high” and “realistic”.
You need to create actionable steps and hold yourself accountable in order to give your startup the advantage it needs. Here’s a guide to help you navigate through those steps that can give your business an early boost.
Table of Contents
- 1. Establish Business Credit
- 2. Create a Business Plan and Pitch
- 3. Be Strategic About Funding
- 4. Join a Small Business Accelerator
- 5. Surround Yourself with the Right People
- 6. Use Your Time Wisely
- Final Thought
1. Establish Business Credit
If you’re a first-time entrepreneur, it’s likely that you don’t have an established business credit score yet. This is completely okay, you have to start somewhere.
To build credit, focus on perfecting your business plan and personal credit history. Your business plan will be a key factor lender will consider when making their decision. Your personal credit score plays an important role and shouldn’t be neglected as it is tied to your business.
For example, if you decide to apply for a line of credit or business credit card, lenders will do a hard check on your personal credit score. Additionally, the Small Business Administration goes into detail about establishing business credit on its site so be sure to utilize the resources available.
2. Create a Business Plan and Pitch
Having your business plan documented is non-negotiable and essential to your startup. It plays a key part when it comes down to funding your dream. Having a business plan will show lenders that you have thought out how much money you will need.
Being prepared with this information can give you better odds of being approved for a business loan or grant. Without a business plan, you are risking not having a visualized outline of your ideas and the necessary steps for making them a reality.
You could also miss out on opportunities to articulate your goals to investors without having a proper strategy in place. So, unless you’re okay with those risks (if you’re reading this article, we assume you want your business to succeed, so you’re probably not okay with said risks), here’s what to keep in mind when creating a business plan.
Do Some Self-Reflection
With any business related document, it’s never a bad idea to brainstorm before drafting a plan. Looking inward is a great starting point for the brainstorming stage of your business plan. Ask yourself the following questions to get some key points of your plan in the works:
Who am I?
This question might seem like it has a no-brainer answer but this is your opportunity to communicate your story and values as well as how they translate into your business. The mission and values of a company are a reflection of its founder, so ensure you make it clear who you are.
What does my business do?
The key to answering this question is digging deeper than the surface level. The more important and underlying query to answer is what value your business offers and what differentiates you from your competition.
Do you provide a product or service that’s first in its market? How about a cheaper or more convenient solution to a problem? Whatever makes your business different from your competitors, make sure to emphasize it.
Who is my business for?
As much as you may want it to be, your business can’t be a solution for everyone. Remember what your business offers and think about who might benefit from it, that’s how you find your answer.
When you identify your target audience, take special consideration into their needs, habits, and values. Identifying these demographics and psychographics will help you create a buyer persona.
The Small Business Administration has a list of small business statistics free to use. You can use this information to narrow down your target market in Google Analytics or Statista.
Assess Your Business Needs
From there, you can start to draft the part of your proposal on the more strategic side of things. After all, this plan is meant to give insight to potential investors, clients, and sponsors on not only what your business is but how you intend to scale it.
Consider how to address your needs as a startup in your proposal. Ask yourself more logistic-based questions such as the following:
Will I need to promote my business?
Most likely, the answer is yes. To create more awareness around your startup, you will need to create some buzz one way or another. When answering this question you need to consider how you plan to create said “buzz” as well.
Social media promotion has become the norm for the digital age. Luckily there’s a constant revolving door of social media trends that you can hop on to generate content. You can also look at what others in your industry have done in the past and follow suit or try something new branching off of other successful campaigns.
For example, you could go with traditional advertising such as a billboard, but add a twist to it to grab the attention of onlookers. Or, if you’re working with a smaller budget, you could get involved in local events that potential customers are sure to attend such as tradeshows and expos.
How do I plan to make my business profitable?
Consider your product or service and estimate its value. How much does it make sense to sell it for? Research and compare it to similar offerings from others in your market. Can you afford more competitive pricing while still making a profit? Considering the elasticity of demand, how sensitive is the quantity to the price of your product?
On average, most startups take 3-4 years to become profitable according to a Zippia study. This statistic isn’t meant to get your hopes down, but more so to give you a nudge to set realistic expectations for your first few years of operation.
There are a lot of logistical and financial considerations that go into play in whether or not your business will see a profit.
For example, something you might need to consider could be the cost of inventory storage. The cost of obtaining a storage space, implementing an order fulfillment process, and hiring employees to manage the space could be expensive.
With that said, it’s important to understand early on if your financial needs will prevent you from making a profit.
How much funding or resources do I need?
Your needs will vary based on your personal financial situation, the industry you’re going into, and your business needs. Are you going to be working solo or will you need the money to hire a team? How about a workspace or equipment, will you require those to operate?
For the sake of brainstorming, set a ballpark estimate of what you will need. Once you flesh out your business plan, you will have a better idea of the actual amount of funds needed.
Polish Your Plan and Pitch It
Now that you’ve asked yourself some introspective questions and have your ideas drafted, it’s time to write the business plan. There are plenty of sample templates online so do your research and create a template that is both professional and aligns with your brand.
Additionally, you can create a pitch presentation deck to supplement your business plan. This can easily be the most exciting part of the process if you’re a creative-minded individual. To make your presentation pop, try using Canva or Prezi to create a more compelling visual experience for your audience.
With the hard part of brainstorming and writing your business plan over, all you have to do now is convince others why it’s a great one. This should be easy, especially if you’re enthusiastic about your idea and believe in its success! Although, if you’re in need of some guidance, we have compiled a list of tips to help you create a persuasive pitch deck.
3. Be Strategic About Funding
With your business plan in place, this step will be much easier as you’ve already asked yourself how much funding you need. Now it’s a matter of figuring out how to secure it. The solution will be different depending on your situation. To help you get a better idea of the choices out there, here’s a short list of potential funding opportunities:
Sites like Kickstarter might come to mind when you think of crowdfunding. Not only is it a viable funding option, but tapping into your network can help back your dream while also building a community around your business.
Another great thing about crowdfunding is that your campaign can be shared through word of mouth and electronically, creating a snowball effect. This could result in more funding and potential customers as the snowball grows, so to speak.
Small Business Loans and Grants
Let’s go over the difference between a small business loan and a small business grant. Both can be great opportunities for financing your project, it’s just a matter of what is best for you.
A loan allows you to borrow a lump sum of money for the purpose of funding your business and requires you to pay it back to the lender including interest.
A few factors like your personal finances, business health, and startup needs affect what loan you qualify for.
Another thing to keep in mind is that there is an application process that could take a lender up to three months to review. If you’re in need of a little guidance, a trustworthy resource to search for lenders is U.S. Small Business Administration’s Lender Match Tool.
Unlike a loan, a grant generally does not need to be repaid. They are collected through taxes for the sole purpose of helping a recipient fund a project. The types you will run into when looking for funding are public and private grants.
Similar to a loan, there is an application process. However, the amount of time it takes to hear back from a lender varies across the types of grants available. Federal and state systems fall under the public grant category.
Consider reaching out to your local Small Business Development Center for more information about grants that are offered in your state. Private grants, on the other hand, are provided by non-governmental organizations such as private companies or foundations. These lenders might have a specific target applicant in mind so be sure to review their application guidelines thoroughly.
Business Credit Cards and Lines of Credit
Much like a personal credit card, a business credit card gives you access to revolving credit for whatever you may need it for. The benefit of using a credit card for your startup is that you can receive cash back or other benefits to putting back into your business.
However, you need to make sure you’re mindful of credit limits as you can overdraft on a business credit card like you could on a personal credit card. Consider comparing different cards before making a decision as there are many business credit cards suited for your ever-evolving business needs.
A business line of credit allows you access up to a certain limit, then you pay interest on what you borrowed. They’re commonly available through traditional and online banks; this financing tool works closely with how a credit card works. You can use a line of credit for operating expenses, business acquisition, and expansion. When applying for a line of credit, keep in mind that different lenders have different requirements for approval.
As you can see, there are plenty of financing options available to you. If you’re still unsure which financing option would be best for your business needs, consider a consultation with a financial advisor to identify the best one, or combination, to move forward with.
4. Join a Small Business Accelerator
Similar to seeking out financial resources for assistance, consider taking part in an accelerator program to give your startup a financial advantage. These programs exist for your benefit, so don’t hesitate to apply to them. Joining a small business accelerator could be the difference in your startup’s success in terms of gaining more funding and exposure.
Small business accelerators are programs that take a startup under its wing for about three to six months. That might not sound like a lot of time to get the ball rolling, but the point of an accelerator program is to grind.
Think of it like a HIIT (High-Intensity Interval Training) workout where you’re only working out for a short amount of time but you’re burning a high amount of calories, the accelerator program is your trainer in this case. During this “startup workout,” if you will, accelerators equip business owners with the tools and resources to get their businesses into shape.
There are a variety of accelerators out there but they all typically provide access to industry mentors, investors, peer support, workspaces, and marketing efforts.
Some programs have a specific mission in mind, like Gopuff’s accelerator called “Put Me On.” The co-founders of Gopuff both came from immigrant families and created their program to help minority-owned startups specifically.
Keep your background in mind when searching for an accelerator partner, it could help you find the perfect match for a program that truly understands you.
5. Surround Yourself with the Right People
Entrepreneur and motivational speaker Jim Rohn once said, “You are the average of the five people you spend the most time with.” Not only does this idea apply to your personal life but it also holds weight to your professional life.
Even if you’re a solopreneur, you still need a tribe. Make sure you’re making conscious and meaningful connections with people, especially those that could impact your business. Here are some tips for ensuring you’re surrounding yourself with quality influences.
Hire with Intention
Hiring good employees from the start is a key part of creating a team culture that thrives and a business that flourishes.
You might be wondering, what defines a good employee? At the most basic level, it’s somebody who is qualified for the position you’re hiring for, someone who checks all your boxes.
For different industries and situations, this could mean you’re looking for someone who is highly adaptable or has excellent communication skills. But more importantly, a good employee embodies your company’s values and positively contributes to the everyday operations of your business. They have the best intentions for your company and keep the momentum going toward its success.
Find a Mentor
When looking at the world from a business-oriented perspective, you will find that knowledge is power. While knowledge can give someone an advantage, it’s important that they share it with others.
Sharing business wisdom can lead to fruitful and mutually beneficial relationships. Many of the most successful entrepreneurs of our time have not only had a mentor but have become one themselves.
While it’s completely up to you whether or not you seek out a mentor, there’s no doubt that having one can be beneficial to your professional growth. A mentor is especially helpful for a budding entrepreneur.
Preferably, try and connect with a seasoned entrepreneur as they’ve “been there” and “done that”. They were in your shoes at one point and can definitely understand the need for direction.
A good mentor can show you the ropes of operating a business, provide guidance in complicated situations, and connect you to their contacts.
Boost Your Professional Network
Think about your professional network, could it use some attention? One way to grow your professional network is to get more involved online on platforms like Linkedin. There are plenty of professional groups to join online too.
Be sure to use that space to spark discussions around industry trends and insights. You may come across someone new in your comment section to connect with.
While it’s easy to send connection requests to strangers on Linkedin to expand your network, there are other ways to create more meaningful business relationships.
Consider becoming a member of a professional development organization or your local chamber of commerce. These kinds of memberships can introduce you to peer and mentors while expanding your business contacts and reach.
6. Use Your Time Wisely
Being productive and proactive in the beginning stages of your entrepreneurial endeavor is crucial to hitting your professional goals. So, with that in mind, be intentional about your time management.
Being more intentional means setting actionable, realistic, time-constrained goals to keep you on the path to success. The idea of succeeding is a great motivator in itself, you just have to do the work to get there.
Goal-setting helps you get into the habit of breaking down end-level achievements into smaller and actionable objectives. With a one-track mind on the vision of your startup’s success, you’ll be more inclined to stick to your goals and avoid distractions.
If you struggle with self-motivation, try positive reinforcement to give you the push to reach your goals. While it can seem complicated to practice this when running a startup, it’s quite simple. Start with a small goal and promise yourself a little reward for achieving it. Work your way up to an even bigger goal with a greater reward.
Your compensation for accomplishing your goals doesn’t have to be financial, it can be anything that will motivate you to get things done. Inevitably, there will be times when you face adversity and want to give up on your goals and that’s okay.
The important thing to remember is why you wanted to start your business and remind yourself how satisfied you’ll be when you reach the finish line.
To boil it all down, from day one you should be doing everything you can to ensure you’re positioning your business in a good spot. The key to your success as an entrepreneur is your eagerness for achieving it. You need to be passionate about your idea but also realistic and intentional.