7. Finance your business
There are a ton of different ways to get the resources you need to start your business. Angel investor Martin Zwilling, whose business Startup Professionals provides services and products for startups and small businesses, recommends 10 of the most reliable ways to fund your business. Take a look and consider your own resources, circumstances and life state to figure out which one works best for you.
- Fund your startup yourself. Bootstrapping your business might take longer, but the good part is that you control your own destiny (and equity).
- Pitch your needs to friends and family. It can be hard to separate business from personal relationships, but if you’re considering asking for a loan, here’s a resource you can use to make it as straightforward as possible.
- Request a small-business grant. Start by checking out our guide to small-business grants. Then, head over to Grants.gov, which is a searchable, online directory of more than 1,000 federal grant programs. It might be a long process, but it doesn’t cost you any equity.
- Start a crowdfunding campaign online. Sometimes power is in numbers, and a bunch of small investments can add up to something major. If you think your business might be a fit for something like Kickstarter or Indiegogo, you should read up on 10 of the best-crowdfunded businesses ever or check out the most popular crowdfunding websites.
- Apply to local angel investor groups. Online platforms such as Gust and AngelList and local networking can help you find potential investors who relate to your industry and passion.
- Solicit venture capital investors. VCs typically look for big opportunities from proven teams that need a million dollars or more, so you should have some traction before approaching them.
- Join a startup incubator or accelerator. These companies are designed to help new or startup businesses get to the next level. Most provide free resources, including office facilities and consulting, along with networking opportunities and pitch events. Some, also provide seed funding as well.
- Negotiate an advance from a strategic partner or customer. If someone wants your product or service bad enough to pay for it, there’s a chance they’ll want it bad enough to fund it, too. Variations on this theme include early licensing or white-labeling agreements.
- Trade equity or services for startup help. For example, you could support a computer system for office tenants in exchange for free office space. You might not get paid for this, but you won’t have to pay for an office, either, and a penny saved is a penny earned.
- Seek a bank loan or line of credit. Here are 10 questions you should ask before applying for a bank loan, including whether you will qualify. If you do meet the requirements, a good place to start for loan opportunities is the Small Business Administration.
8. Develop your product or service
After all the work you’ve put into starting your business, it’s going to feel awesome to actually see your idea come to life. But keep in mind, it takes a village to create a product. If you want to make an app and you’re not an engineer, you will need to reach out to a technical person. Or if you need to mass-produce an item, you will have to team up with a manufacturer.
Here is a seven-step checklist — including finding a manufacturer and pricing strategies — you can use for your own product development. A major point the article highlights is that when you’re actually crafting the product, you should focus on two things: simplicity and quality. Your best option isn’t necessarily to make the cheapest product, even if it lowers manufacturing cost. Also, you need to make sure the product can grab someone’s attention quickly.
When you are ready to do product development and outsource some of the tasks make sure you:
- Retain control of your product and learn constantly. If you leave the development up to someone else or another firm without supervising, you might not get the thing you envisioned.
- Implement checks and balances to reduce your risk. If you only hire one freelance engineer, there’s a chance that no one will be able to check their work. If you go the freelance route, use multiple engineers so you don’t have to just take someone at their word.
- Hire specialists, not generalists. Get people who are awesome at the exact thing you want, not a jack-of-all-trades type.
- Don’t put all your eggs in one basket. Make sure you don’t lose all of your progress if one freelancer leaves or if a contract falls through.
- Manage product development to save money. Rates can vary for engineers depending on their specialties, so make sure you’re not paying an overqualified engineer when you could get the same end result for a much lower price.
To help you have peace of mind, start learning as much as you can about the production, so you can improve the process and your hiring decisions as time goes along.
This process will be very different for service-focused entrepreneurs, but no less important. You have several skills that people are willing to pay you for right now, but those skills can be hard to quantify. How can you establish yourself and your abilities? You might consider creating a portfolio of your work — create a website to show your artwork if you’re an artist, writing if you’re a writer or design if you’re a designer.
Also, make sure you have the necessary certificates or educational requirements, so that when someone inquires about your service, you’re ready to jump at a good opportunity.
9. Start building your team.
To scale your business, you are going to need to hand off responsibilities to other people. You need a team.
Whether you need a partner, employee or freelancer, these three tips can help you find a good fit:
- State your goals clearly. Make sure everyone understands the vision and their role within that mission at the very start.
- Follow hiring protocols. When starting the hiring process you need to take a lot of things into consideration, from screening people to asking the right questions and having the proper forms. Here is a more in-depth guide to help you.
- Establish a strong company culture. What makes a great culture? What are some of the building blocks? You can see our list of 10 examples of companies with great cultures, but keep in mind that you don’t need to have Google’s crazy office space to instill a positive atmosphere. That’s because a great culture is more about respecting and empowering employees through multiple channels, including training and mentorship, than it is about decor or ping-pong tables. In fact, office perks can turn out to be more like traps than real benefits.
10. Find a location.
This could mean an office or a store. Your priorities will differ depending on need, but here are 10 basic things to consider:
- Style of operation. Make sure your location is consistent with your particular style and image.
- Demographics. Start by considering who your customers are. How important is their proximity to your location? If you’re a retail store that relies on the local community, this is vital. For other business models, it might not be.
- Foot traffic. If you need people to come into your store, make sure that store is easy to find. Remember: even the best retail areas have dead spots.
- Accessibility and parking. Is your building accessible? Don’t give customers a reason to go somewhere else because they don’t know where to park.
- Competition. Sometimes having competitors nearby is a good thing. Other times, it’s not. You’ve done the market research, so you know which is best for your business.
- Proximity to other businesses and services. This is more than just about foot traffic. Look at how nearby businesses can enrich the quality of your business as a workplace, too.
- Image and history of the site. What does this address state about your business? Have other businesses failed there? Does the location reflect the image you want to project?
- Ordinances. Depending on your business, these could help or hinder you. For example, if you’re starting a daycare center, ordinances that state no one can build a liquor store nearby might add a level of safety for you. Just make sure you’re not the one trying to build the liquor store.
- The building’s infrastructure. Especially if you’re looking at an older building or if you’re starting an online business, make sure the space can support your high-tech needs. If you’re getting serious about a building, you might want to hire an engineer to check out the state of the place to get an objective evaluation.
- Rent, utilities and other costs. Rent is the biggest facilities expense, but check out the utilities, as well, and whether they’re included in the lease or not. You don’t want to start out with one price and find out it’s going to be more later.
Once you know what to look for and it’s time to start searching for a place that fits all of your qualifications, these four tips can help.
- Think on your own timeframe. Landlords are starting to offer shorter-term office rentals. Don’t get stuck in a long-term lease if it doesn’t make sense for your business.
- Play the whole field. There are all sorts of places to use — co-working spaces, office business centers, sublets and more. Keep your options open.
- Click around town. You might be able to find the perfect place by using online resources.
- Do the deal on your terms. Again, you have options. Don’t get roped into something that makes you uncomfortable.
After you have a location, you can focus on the aesthetic. You can check out a few design ideas here.
11. Start getting some sales
No matter your product or industry, your business’s future is going to depend on revenue and sales. Steve Jobs knew this — it’s why, when he was starting Apple, he spent day after day calling investors from his garage.
There are a ton of different sales strategies and techniques you can employ, but here are four tenets to live by:
- Listen. “When you listen to your clients/customers, you find out what they want and need, and how to make that happen,” says investor and entrepreneur John Rampton.
- Ask for a commitment, but don’t be pushy about it. You can’t be too shy to ask for a next step or to close a sale, but you also can’t make customers feel as though you’re forcing them into a sale.
- Don’t be afraid of hearing “no.” As former door-to-door salesman (and now co-founder of software business Pipedrive) Timo Rein said, “Most people are too polite. They let you make your pitch even if they have no interest in buying. And that’s a problem of its own. Time is your most important resource.”
- Make it a priority. As entrepreneurial wizard Gary Vaynerchuk said, “Actually creating revenue, and running a profitable business, is a good strategy for business. Where are we that people think users or visits or time on site is the proxy to a successful business?”
But how do you actually make those sales? Start by identifying targets who want your product or service. Find early adopters of your business, grow your customer base or put out ads to find people who fit your business. Then, figure out the right sales funnel or strategy that can convert these leads into revenue.
12. Grow your business
There are a million different ways to grow. You could acquire another business, start targeting a new market, expand your offerings and more. But, no growth plan will matter if you don’t have the two key attributes that all growing companies have in common.
First, they have a plan to market themselves. They use social media effectively through organic, influencer or paid campaigns. They have an email list and know how to use it. They understand exactly who they need to target — either online or off — with their marketing campaigns.
Then, once they have a new customer, they understand how to retain them. You’ve probably heard many people state that the easiest customer to sell to is the one you already have. Your existing customers have already signed up for your email list, added their credit card information to your website and tested what you have to offer. In doing so, they’re starting a relationship with you and your brand. Help them feel as good about that relationship as possible.
Start by utilizing these strategies, which include investing in your customer service and getting personal, but realize your work will never be done. You’ll constantly be competing for these customers in the marketplace, and you can never simply rest on your laurels. Keep researching the market, hiring good people and making a superior product and you’ll be on your way to building the empire you always dreamed about.