Starting a business, given its share of rewards and risks, is a serious endeavor and requires considerable preparation. If you are going to accept the challenge, then you must do everything you can to improve your chances of success. This process involves the mastery of ten steps.
Each step by itself is merely a tool, but collectively they provide an entrepreneurial blueprint for starting a successful new venture. No matter what your business, conquering these ten steps will increase your odds for success. However, these steps are not easy nor simple. Each level involves a tremendous amount of effort and a lot of street smarts to work effectively. Similar to playing a video game, you should master each level before moving on to the next one.
Here are the ten steps to small business success:
1 – Develop your personal and company goals.
The success of a new business requires a combination of knowing what you are doing and capitalizing on a good opportunity. Develop and clearly state your goals in a written plan, which will then serve as your road map. They give you a sense of direction and help you get to your destination, a successful business of your own, with a minimum of time, effort, and expense.
2 – Define a viable market segment for your product or service.
The next step in starting a new venture begins with listening to the marketplace. Define an unmet consumer need first, before you develop a product to satisfy that need. Regardless of how astute you may be in business, if the market isn’t there to support you, then you cannot expect to go very far. However, the majority of entrepreneurs first come up with a product they think is “hot” before determining the existence of sufficient demand for the product. You may have the most exciting product in the world, and people might think that it’s the most interesting thing they’ve seen in a decade, but if you can sell only a handful (to your immediate family and in-laws), you are probably doomed to failure. In order to verify that there is a need for your product, you must test the market by conducting a variety of market research.
3 – Develop your marketing plan.
The purpose of the marketing plan is to describe how you will attempt to create and maintain customers for a profit. It needs to state whom you are going to sell to, how you are going to penetrate the market, why you will be successful with your sales campaigns, and finally, how much you will sell annually over the next five years. The marketing plan will ultimately become an integral part of your overall business plan, but it must be completed first.
4 – Write your initial version of the business plan.
Your business plan must reflect the unique environment you will be operating in as well as what you plan to be your competitive advantage. It is an outline of the direction in which you plan to take your company, an analysis of your business strengths and weaknesses, and a skeleton from which your formal business plan will later be developed. It will assist you in securing the key people you need, and it will also help you to begin developing your financial projections.
5 – Determine your financing needs.
Once you have developed a rough business plan, you can begin to determine your financing needs, which will be incorporated into your formal business plan. Your marketing analysis leads to sales forecasts, which determine your staffing level, which defines your operating budget, from which you can generate pro formas (financial projections) and determine your projected cash flow.
6 – Form your key teams: founders, management, and directors.
Before developing your formal business plan, you must make sure you have put together a solid management team. If there are any holes in your team at this point, they should be filled. The rough business plan you developed in Level IV should help you to attract top talent to your company. In addition, it will help you to build a strong board of directors or board of advisers.
7 – Finalize your financing needs and create your formal business plan.
Starting with the rough business plan, put together a full-fledged formal business plan. A business plan should convincingly demonstrate that your business can sell enough of its product or service to make a satisfactory profit and be attractive to potential backers. This is the document you will use to secure the financing you need to get your business off the ground. It will also serve as an operating manual for your business once it’s been funded.
8 – Develop a marketing strategy to obtain financing for your company.
I’m not talking here about the marketing strategy to sell your product or service, but a strategy to sell yourself and your company to financiers in order to raise the capital that your business needs.
9 – Market your plan successfully, attracting capital on your terms.
Once you’ve developed a strategy for approaching financing sources, you must make use of the negotiating tools that will give you an inside edge on the competition and enable you to attract capital on your terms rather than just on your investors’.
10 – Market your product/service and manage your business to achieve your goals.
The last step in the process involves the ongoing management and marketing of your business. Getting a company started is only half the battle. Once you’re in business, you will need strong management tools and marketing skills in order to make sure you stay in business.
Each step, executed in order, builds a solid foundation for the steps that follow. By progressing in this manner, rather than using the typical haphazard approach, you begin to gain the needed experience.
Recommended Books on Small Business Success:
- The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business
- School for Startups: The Breakthrough Course for Guaranteeing Small Business Success in 90 Days or Less
- 65 Winning Strategies for Small Business Success
- The Big Book of Small Business: You Don’t Have to Run Your Business by the Seat of Your Pants
- Rules of the Hunt: Real-World Advice for Entrepreneurial and Business Success
Originally published on June 7, 2012. Updated on February 28, 2020
- Evaluating Financing Options for Your Business: Myths and Facts
- 13 Marketing Mistakes to Avoid
- Pros and Cons of Financing a Business
- Myths and Realities of Business Plans
- 5 Key Benefits of Invoice Financing for Your Small Business