In this 6-minute read:
- Test your idea
- Understand your market
- Get to know your customer
- Establish funding
- Structure your business
- Start marketing
As you are getting ready to start your own business you’re going to have to wear a lot of different hats, and it’s not always going to be easy. But you’ve got this!
Just to help you along the way, we’ve put together a list of six best practices to successfully launch your new small business. Keep these things in mind as you go about preparing your new business to give yourself the best chance at success.
Test your idea
Before you ever start your business, you should test your business idea out on a smaller scale. What is the product or service that you want people to purchase?
Test your idea out. See if people show interest in what you have to offer and if it even makes sense to move forward with it. Here are a few ideas to start testing your business idea:
Build a minimum viable product
A minimum viable product (MVP) is the simplest form of your business idea that you can sell. During the testing process keeping it simple is critical in order to test, modify, and repeat. Show your target audience this MVP and get feedback to help you improve your idea before the real launch of your business.
Talk to other people in the industry, your family members, your friends, and potential customers about your idea. Get their honest opinions and show appreciation for any criticisms.
Your idea is supposed to solve a real problem that people have. Find out if your target audience identifies with the problem that you think your idea will solve.
You can gain valuable feedback by presenting your idea to a potential customer in a real-world application.
Use the critiques you get to adjust your idea and run it by even more people. Try to run your idea by at least 50 people (or more) and continue to adjust it until you and your harshest critics see a product or service that is ready to go to market.
Try selling it
Before you launch your business in earnest, try selling your offerings on a limited basis. Are people even willing to pay the price that you want for your idea?
If things don’t go well during the testing process, that doesn’t mean you should give up. It just means you need to make changes and test it again.
Isn’t it much better to figure those things out now than before you put all of your hard-earned money into it?
Understand your market
Market research is important for any type of business that you may be launching. If you don’t understand the market that you are entering, you aren’t likely to succeed.
Spend time talking to and researching others in the industry in your specific area. What are they doing well? What can you learn from their successes and failures?
Important questions to ask and understand during the market research process:
- How large is your potential market?
- Will the market grow or shrink?
- How can you expand your business as the market grows?
- Can you handle a growing market?
- What competition already exists in your target location and what share of the market do they own?
- What is the general public’s perception of your competitors?
- What sets you apart from competitors?
- Who is your ideal customer, and what do they want?
- What are the pain points of your ideal customer?
- Why would people buy from you?
- What prices should you charge? What are competitors charging?
- What are your business goals and how will you reach them in this current market?
Get to know your customer
In order to sell anything to anyone you have to know and understand who you are selling to. You need to know how to appeal to your target demographic.
During the market research phase, you should uncover some important information about your target customer.
Information you should know about your target audience:
- Education level
- Location of residence
- Income level
- What they do during free time
- Biggest challenges
- Spending/purchasing habits
- Research habits (where do they go for information?)
Learning these things about your customers will give you a better success rate of marketing and selling to those customers. You can’t just blast information about your business and expect to get qualified customers running to your store.
You need to strategically plan for the type of customer you want and then appeal to the things that you know about them.
You can’t start a business without the proper funding. Even if you are able to work out of your home doing a service with equipment that you already own, you will need funding for marketing at the very least.
The more likely scenario is that you’ll need funding for a commercial space, capital to manufacturer a product or purchase equipment, and of course the money to start a good marketing campaign (including getting a website up).
Beyond simply saving up the money you need to start your venture (also known as bootstrapping), here are a few ways to can acquire the necessary funding:
- Borrow from trusted friends and family. It’s not always ideal to be in debt to people you are close with, but if you are confident in your plan and are confident that you can pay them back quickly, then this isn’t a bad way to go.
- You could always try crowdfunding. Crowdfunding is a way to let friends and friends of friends and all of their friends (and complete strangers) make their own contribution to your business. You’ve probably heard of GoFundMe, which is primarily meant for raising money for special life events and challenging circumstances. There are tons of platforms like this devoted to specifically helping small business owners like you get started.
- Taking out a business loan is always an option if you have the credit score and collateral to back up the loan.
Structure your business
It’s important to choose the right corporate structure for your small business. Do your research to find out if you should incorporate or if you should stick with a sole proprietorship until you see some significant growth.
We have a great guide that can help you learn more about sole proprietorship versus a corporation and what type of corporation is the best for your business.
Check it out here: How and when to incorporate your small business
Go deeper: Can I get a PPP loan to start a business in 2021?
Once you are satisfied with your business idea, you understand the market and your audience, and you’ve got the funding and structure in place, it’s time to get your name out there.
In this world of constant change and growing markets, it is imperative that you start a marketing campaign to help your business get found.
There are tons of ways that you can start your marketing, but the best place to start is the search engines and the places where your target audience spends most of their time. Are they big social media nuts or are they constantly on the road listening to the radio?
Check out these guides to get a good start to your marketing campaign:
- 25 free local advertising ideas for small businesses
- Local SEO: 15 free tips for better search rankings
- 5 best DIY websites for small businesses on a budget
Want to see even more success from your marketing efforts?
Then you need to come up with a plan to get new reviews for your business as well. Customers rely on Google, Yelp, Facebook, and more to provide them with honest feedback about businesses.
Make sure you are sending the right messages by getting your customers to leave good reviews about their experience with you.
Womply’s reputation management software is a great resource for managing all your online reviews and platforms, and it will even help automate the process of responding to reviews (which is crucial). Learn more, plus get free reputation monitoring and customer insights when you sign up for Womply Free!