How to start a business
Small Business Guides
8 min read
If you want to succeed in business, you'll need the right attitude and a great plan. We asked Sheryl Thai, co-founder of the League of Extraordinary Women, to share her tips on how to start a business.
Six steps to start your business
People start new businesses every day. Some succeed, but lots don’t. If you want to give yourself the best chance of success, you'll need to start with the right attitude – and maintain it. The first few years of your business will be some of the toughest financially, mentally and physically – with little or no recognition. So if you want to do well, you'll need to become resilient and grow a thick skin. It's vital that you have the right frame of mind in order to recover quickly from any setbacks and keep your business moving forward. You'll also need to:
- understand your motivation
- use the resources available to you
- learn from your heroes or experts you admire.
To explore what this means in practical terms, we spoke to Sheryl Thai. She is one of the co-founders of League of Extraordinary Women and founder of Cupcake Central. This guide will give you some of her valuable insight and experience about starting a business.
1. Ask yourself "Why?"
Why do you want to start a business? You might think that's a simple question, but the answer will have a big impact on your chances of success. Think carefully about the question and discover what you really want from your business:
- Do you want to make a difference to the world?
- Do you want to make life easier for people?
- Do you want to think differently and challenge the status quo – like Apple does?
- Do you want to challenge yourself?
- Do you want to gain financial independence?
Understanding your motivations will help you gain clarity. It will give you the confidence to build your business successfully. If you’re starting a business “for fame and fortune” that isn't a good answer. Having a strong, positive motivation is what will serve you well in the long run.
2. The right time is now
There's rarely a perfect time to start a new business. But that doesn't matter because you don't need to wait for the perfect moment. Or quit your day job. Or have a million dollars in the bank. And you don't need to know everything about running a business or have a complete business plan.
Obviously it wouldn't be wise to start a new business that directly competes with your existing employer. And you may need some financial backing to tide you over until your new business makes a profit.
But if you have a good business idea and feel ready to pursue it, don't let minor details put you off. Once you know how to start a business, there should be little to hold you back.
3. Write it down
In a world of glowing screens and constant interruptions online it can be hard to think clearly. So take some time away from technology and go offline. Grab a piece of paper and a pen, go to a café and start writing.
Some of the best business plans ever created started life on scraps of paper scribbled in cafés, so you'll be in good company.
Don't worry too much about structure, just think about your business and let your imagination run wild. You can always refine your thoughts later. If you get stuck, it might help you to think about some of these questions:
- What purpose will my business fulfil?
- Who will my customers be?
- Why would customers come to me – and not to my competitors?
- Who are my competitors?
- What products or services will I offer?
- How will I decide what to charge?
- How will my customers feel when doing business with me?
- How will I decide who to hire?
- What will my business be like – what type of culture will it have?
- Where will my business be three years from now?
When your thoughts are out of your head and down on paper you will be surprised how much detail you can write down. Don't be afraid to think big and write down your dreams of success. Even the largest businesses started small.
4. Meet your heroes
Now you've got to this stage, it's time to think differently. Success leaves clues, and there are probably people you admire who have succeeded in business. You may not know them personally, but don't let that prevent you from stepping outside your comfort zone.
Your heroes already know lots about running business, so ask them for a coffee date. Contact successful entrepreneurs you admire and see if they can spare 20 minutes with you to chat over a coffee.
It might sound daunting, but what's the worst that can happen? They might ignore you or decline your invitation. But if they accept, you'll be able to get a glimpse of the business world from their perspective. Just make sure you do the groundwork before you meet them:
- Be prepared
Do your research before you meet, decide what specific topic you want to talk about.
- Figure out what you need from the meeting
Focus on the area of their experience that might be useful to you. That way you'll get the most out of the meeting and you won't waste their time.
- Be considerate
Meet when and where they want to meet – and always pay for the coffee. It's the least you can do. What you'll be getting in return should be worth a whole lot more than the price of a cappuccino.
5. Work on the numbers
Accounting might not be your strong point, but no business can succeed without a good grasp of the financials. The numbers don’t lie and are vital if you want to find out the true health of your business. So think about how you'll approach this. You could:
- hire an accountant or bookkeeper to handle the figures for you (read our guide to when you should hire an accountant).
- talk to business advisors, chambers of commerce and other sources of business guidance.
- dive into your accounts and get familiar with the numbers.
Diving into your accounts might not seem an appealing option. But good accounting software can make checking the books a lot less daunting than it used to be. Do your research online and find out what other small businesses are doing and which software they use. Try to find software that’s intuitive, accessible and cost-effective.
Whatever you do, try to get your accounting system set up correctly from the start. Three months of business can go past in the blink of an eye. The last thing you'll want to do when your business has really started growing is wade through old receipts and invoices. So record everything as you go along – start as you mean to continue.
Don't be afraid to think big and write down your dreams of success. Even the largest businesses started small.
6. Get going – five ways to start
At this point you should be ready for the finer details. You'll have done your research and cut yourself free from commitments that might hold you back. You should have a good idea of the numbers too.
Now comes the practical work, the legal form-filling and preparation. The details will vary depending where in the world your business is based, but here are some of the things you will have to do:
- Register your business name
Do this through the registrar of companies, and also with the tax office. Check your government's business website for more details.
- Set up payroll
You will need to do this if you're employing people – and perhaps even if you aren't (read our payroll guides).
- Develop your brand and logo
There are plenty of online resources for this, many of which are inexpensive such as Fiverr or 99designs. Or you could hire a design agency or graphic designer to really get to grips with your brand and what you're trying to achieve.
- Build your website
This isn't something you have to do yourself – in fact if you've never done it before you probably shouldn't do it yourself. But there are plenty of online resources to help you build great websites, such as Squarespace, Wordpress and Shopify. Or you could hire a web development agency to build a site that suits you perfectly.
- Market your services or product
Think how you're going to tell people about your business – marketing, PR, word-of-mouth? You may want to hire someone to help you here.
Always shop around. There can be huge price differences between different agencies. That's true for branding, website construction, marketing and PR. Get references, research alternatives and take the time to find someone who's right for your business.
Launch – and then keep learning
Once you've gone through these steps, you'll be ready to launch your business. You might not feel ready – but it’s natural to feel like that. While there will always be something else to do, or more preparations to make, don't let this delay you.
Make sure you do have a set-in-stone launch date – and a party to celebrate it. A good strategy is to announce this publicly so that you have to commit to it. A launch party is a great way to have your services or product remembered by your friends and potential customers. And your business will feel all the more real as a result.
Once you're up and running keep educating and upskilling yourself any way that you can. Go to seminars and conferences, and keep up to date with podcasts, magazines and books.
Starting a business is just the first step on a long journey as an entrepreneur. There are many more steps to take if your goal is to build a successful business. Never stop learning – then you'll stand a good chance of reaching that goal.