Planning could help the 50% of businesses that fail in the first five years stay afloat. If you want to start a successful business, you need to:
- Follow strategic, proven steps
- Plan for everything you can
- Identify your ideal client
- So much more
Being agile in an ever-changing business environment can help your company find success, too. If you want to start a business, follow the eight-step guideline below to give yourself the best chance of success.
How to Start a Business That Wins in 8 Steps
Starting a business isn’t for everyone. Some people naturally excel as leaders and have the mindset required to run a business, while others might find different paths more fulfilling. This brings us to the first essential step for anyone considering entrepreneurship.
1. Evaluate Your Mindset
It may sound cliche, but mindset is everything. You need to evaluate your mindset and be 100% honest about four key things:
- Entrepreneurial spirit
- Curiosity
- Agile mindset
- Resilience
Owners are curious, entrepreneurial, and willing to change with the times to keep their businesses afloat. If you have an open mind, you won’t be an owner who gets stuck in the mindset of “this is how it’s always been done.”
Good days, bad days, wins and losses require different levels of resilience that not everyone experiences. Resilience is one of the biggest assets in business because markets are unpredictable.
If you’re curious and open-minded, you’ll see options during difficult times and be able to withstand headwinds along the way.
2. Plan, Plan, Plan
What’s your plan? If you have the best business idea in the world but don’t have a plan, you’re setting yourself up for failure. You want to do quite a few things:
- Prepare and develop a business plan. Don’t know where to begin? Alex Genadinik’s book, Business Plan Template And Example: How To Write A Business Plan: Business Planning Made Simple, is a good start.
- Review any holes in your plan and try your best to safeguard against foreseeable issues.
- Don’t ignore capacity planning. You may have constraints and limitations that you need to overcome, such as a large order that can transform your business but requires more workers &/or equipment to handle. How will you manage the need for additional resources?
You never want to get stuck in the vicious planning cycle where you’re paralyzed and never take action. But you do want to plan as much as possible.
3. Identify Your Unique Selling Proposition (USP)
Your business needs to differentiate itself, but how? Ask yourself one question: why would someone buy your product? Your answer will be your USP, which will often fall into one of the following categories:
- Low price. What is also known as the “Walmart approach.” You’ll likely generate a lot of sales, but suffer from low profit margins and find it difficult to increase prices in the future. For many businesses, this USP is a race to the bottom.
- Customer experience. Also known as the “Disney approach.” Disney impresses people with top-notch experiences, but you can’t offer this if you have the lowest prices. This can be a great approach, but make sure you’re pricing your products and/or services appropriately.
- Innovation. Think Apple. Most businesses aren’t innovators, but those that are release new, exciting products that people love.
Once you nail down your USP, it’s time to start thinking about who you want to attract to your business.
4. Identify Your Ideal Client
You know your USP, but who does your USP appeal to? Identifying your ideal client will help you:
- Avoid trying to be all things to all people — which rarely works out
- Target your marketing messaging more effectively
A narrow niche or focus often leads to better business success, so take the time to identify and create your ideal client profile to improve your targeting.
5. Develop Your Marketing Plan
Every business needs a marketing plan. Without promotion and brand awareness, you’ll struggle to bring in new customers or clients.
Finding the right strategy starts with understanding your ideal client, how to reach them, and which messaging will resonate with them.
Consider consulting with professionals who know your industry and market to build a plan based on proven, effective strategies.
6. Determine Your Pricing Strategy
Now that you’ve identified your USP and ideal client, you can use this information to determine your pricing strategy.
Pricing requires some finesse.
You want to ensure you’re charging what your products or services are worth, but you also don’t want to go overboard and price yourself out of the market.
And if your prices are too low, you’ll run yourself out of business because you can’t sustain a profit.
Competitor analysis and tweaking of your pricing strategy can help you find that “sweet spot” that makes your business profitable without turning customers off.
7. Build a Financial Model
Finances are the backbone of every business. Without cash, you won’t keep your doors open for long. That’s why it’s so important to build a financial model that will help your business stay on the right track.
How do you build a financial model?
- First, project your sales.
- Then, estimate your cost of sales, selling/marketing expenses, overhead, and profit.
- Next, decide your capital needs for equipment, vehicles, etc.
- Last, determine your working capital and financing needs.
With this data in hand, you can start building a financial model that will work for your business. Don’t be afraid to tweak things until you find the right model.
A financial model will give you a path to follow. It may not be the exact path you wind up following, but you’ll have something to measure against and a plan to respond if things start to go off course.
8. Get the Right Support
Winning businesses are built on the backs of multiple people. Good advisors will be invaluable as you build your business. They can provide insight and direction, but they can also identify landmines that could derail your business.
With the right support, you can get where you want to go much faster and avoid problems along the way.
Final Thoughts
To build a winning business, you need more than just passion and a great idea. You need a solid plan and support from advisors who can help you find the right path forward.
If you follow the eight steps above, you will be well on your way to creating a business that succeeds and continues to grow over time.
To learn more about building a winning business or to schedule an appointment, click here.