How to Start a Business: 7 Simple Steps

Key Takeaways

1. Self-Assessment - Are you cut out to run your own business?

Dreaming of starting your own business is easy. Starting a small business and working there until it becomes profitable is not as good. It takes time, money, focus, persistence, and a whole lot of things that no one talks about. In fact, if you ask experts “what it takes to start a business,” the standard answers you'll get will typically be about skills, interests, and experience.

While these are important (they are at the top of the list below), so are your personality, attitude, and soft skills. Before starting your business, be sure to ask yourself all of these questions and answer them honestly:

What are my skills, my passions, my experience and my knowledge of the sector?
Do I have the initiative or do I need others to tell me what to do?
Am I able to plan, make decisions, and implement them?
Am I open to suggestions, criticism, and change?
Am I able to set goals and deadlines and stick to them?
Will I be able to stay focused even when things are tough?
Am I optimistic and realistic at the same time?
Am I honest in all my relationships with others?
Am I learning from my mistakes and making adjustments based on what I've learned?
Do I have confidence in myself?
How much time can I devote to creating and managing the business?
How much money can I afford to spend on my plan to become an entrepreneur?
Am I ready and able to take on debt to start a business?
How long will it take for me to make money with my business?
How supportive will my family members be?
How much money should I earn with the business so I can pay my rent and eat?
What type of business would best suit my interests and skills?

TO GO FURTHER: How do you start a successful complementary business?

2. Choosing the right type of business to start

If you're not sure what type of business you want to start, think about your interests, your skills, and the types of businesses that relate to those skills. Here are some of the things to consider when deciding what the best business choice would be for you:

What you like to do
What you know how to do
What people ask you to do to help them.
Things you can do that others can't or won't do themselves
What people are willing to pay for
How much they are willing to pay and whether this amount pays off for you.
How much money can you afford to put into your startup.

If you don't have money to invest in a business, don't despair. While there are limits to what you can do, there are ways to start a business with no money.

TO GO FURTHER: 17 reasons to start a business today

3. Research and evaluation of your business idea

Once you have a business idea in mind, you need to do some research to determine how likely customers are to want what you're selling and what running the business involves.

Market research will allow you to know who your customers are going to be, what they are looking for, and how you should sell to them.

Here are some of the questions you should ask yourself when conducting market research:

How many people or businesses need the product or service you have in mind?
Who are these people (identify your target market - what are their common characteristics such as age, location, gender, etc.)
How do these individuals currently find out about the type of product or service in question?
How are you going to reach these people to promote your business?
Who will be your competitors and how many are there in your market?
What should you do to convince customers to buy from you rather than from a competitor?

Information about the operation of the business and industry that you should study is as follows:

What is the average annual turnover of this type of business in your region?
How much profit do they make?
How much money does it take to start this type of business and keep it running long enough for it to start making a profit?
Where do you get this money?
Is the need for this product or service increasing or decreasing?
How many businesses offer similar products in the region I want to serve?
Are people buying this product or service online instead of buying locally?
What are the sources of income for the business, and which is the most profitable?
Do you need special licenses or permits to operate your business?
How well do you know the operating details of the business you are planning to start?
Where will you get your inventory and how much should you keep?
What other providers will you need to work with?
How many employees will you need?
What local laws do you need to comply with?

Industry publications and local resources can often help you find much of the information you need. You can also search online using search engines and social networks.

4. Compare buying an existing business to starting a new business.

In some cases, buying an existing business may be beneficial for starting your own business. If the business you want to buy works well and gets repeat customers, your first marketing tasks will be easier. Starting up will also be less stressful if the current entrepreneur is ready to show you how they run their business. If you are considering buying a well-known franchise, your new business will benefit from immediate name recognition, and the franchise will provide you with some training.

Despite the apparent benefits, success is still not guaranteed. In either case, you will have to pay a lot of money up front and maybe take on a lot of debt. Therefore, before moving forward, carefully consider questions like these:

Questions to ask before buying an existing business

If you're buying an existing business, why is the owner selling it?
What is its annual turnover?
What is its benefit?
What is the owner's salary?
Have you worked with an accountant to find out what procedure you should take before buying the business?
Are there any changes taking place (new malls, big box stores, highway construction, or others, for example) that could have a negative or positive impact on the business you're considering buying?
How many similar businesses exist in the community you plan to serve?
If you are considering buying a franchise, what is the purchase price?
What additional expenses will be incurred to build or rent the franchise (window, vans, equipment, etc.)?
What will be the size of your sector?
Are there competing franchises that could open nearby?
What level of training and operational advice will the franchise you are considering creating provide you with?
What is their success and that of their franchisees?

Before embarking on the purchase of an existing business or a franchise, we suggest that you consult an accountant and a lawyer.

5. Writing a Canva business model

The Business Model Canvas reflects your business model.

It is a much more concrete and visual approach to understanding the viability of your business model that is helping many entrepreneurs around the world.

It is based on real data and research rather than assumptions over X years that primarily please institutions and investors than anything else.

You can start with a thought exercise, filling in the segments that come to mind first and then working on the empty segments to fill in the gaps.

You can consult my detailed review of best business plan tools to help you.

Use the data collected previously as well as these few questions below to fill out your Canva Business Models:

1. Key partners

Who are your main partners/suppliers?
What are the motivations for these partnerships?

2. Key activities

What key activities does your value proposition require?
What are the most important activities in terms of distribution channels, customer relationships, revenue streams...?

3. Value Proposition

What core value do you provide to the customer?
What are the customer needs that you are meeting?

4. Customer relationships

What relationship does the target customer expect from you?
How can you incorporate this into your business in terms of cost and format?

5. Customer segment

For which categories of people do you create values?
Who is your most important customer?

6. Key resources

What key resources does your value proposition require?
Which resources are the most important in terms of distribution channels, customer relationships, revenue streams...?

7. Distribution channels

Through which channels do your customers want to be reached?
What are the channels that work best? How much do they cost? How can they be integrated into your daily life and that of your customers?

8. Structure costs

What are the highest costs in your business?
Which key resources/activities are the most expensive?

9. Revenues

What value are your customers willing to pay for?
What are they paying recently and how? How would they prefer to pay?
How much does each revenue source contribute to overall revenue?

READ MORE: Create a Business Plan in 20 minutes: The Business Model Canvas made easy

6. List and plan your tasks to launch your business.

Now you are ready to take care of the practical details of starting your new business. The specific tasks you need to complete will depend on the nature of your business.

To launch your business, start by validating all the research you have done and which has shown you the viability of your business before embarking on time-consuming administrative projects.

Once all of this has been validated, you will need, among other things, to give your business a name and ensure that you have the right to use that name, register the business with the competent authorities, choose a business form, obtain business licenses and certificates, obtain a tax identification number if you need to collect sales taxes, rent premises (if necessary), and set up an accounting system.

You'll also need to create a website and social media accounts for your business (the ones your customers visit and where your customers are present).

TO GO FURTHER: How do you find a business name for your business?

7. Start your new business

Now is the time to let the world know that you are a working entrepreneur and to welcome customers. Even if you open a store in a busy city center, you can't expect customers to miraculously show up on your doorstep.

You need to start marketing and selling. Do everything you can to develop word-of-mouth. Send advertising. Create pamphlets and brochures. Take part in networking meetings. Talk to all of your friends about it. Ask for recommendations. Go on social media. Place ads that interest you.

Most businesses don't become successful overnight. So don't be discouraged if it takes time to get a steady flow of customers. Keep marketing and talking to potential customers. Ask customers and prospects to give you feedback (and recommend!) and adapt your strategy if necessary.