You’re ready to pivot away from your 9-5 job, but you’re unsure where to start. Maybe you have experience in an industry, but you’re unsure how to use those skills to become financially independent. Or, maybe you don’t have any idea where to start because you have zero experience, connections, ideas, or money. If both of these examples sound like you, read on.
How to Start a Business from Scratch
Part 1: Find an Idea
In the business book Start From Zero by Dane Maxwell, he offers 15 real-world examples of multiple types of businesses that succeeded from an idea that didn’t always come from a place of passion. Starting a business around passion won’t pay your bills. It’s more important to think of a business idea that will pay your bills instead of one that only motivates you.
Think of a few ideas that involve some form of work like writing, building furniture, coding, or painting, and write down how you can make money off of them. Online courses, blogging, books, and e-commerce are all possibilities. Then, think of how you can use this work to make money, like how you can build an online course around teaching people how to code.
Part 2: Start Researching
Researching doesn’t sound like a lot of fun, but it’s a necessary skill to master if you want to build a business. You don’t need to read a million books about how to name your business; you just need enough practical knowledge via blog posts, videos, or courses. Podcasting is a fantastic way to learn while commuting to your job, so start there if you have limited time.
While researching, focus on finding your target customers, ways to engage your audience (like social media), identifying problems with your industry, and what your competitors are doing. You can also set goals during this period by establishing a business objective or timeframe.
Part 3: Create a Business Plan
Your business plan is an outline of your current and future goals. Add a statement of purpose which will indicate the market, products, and business operation, and if you wish to seek funding. Add the product description and your competitor analysis. Creating a business plan is a crucial step because it will help you make more strategic decisions.
Part 4: Finances
While there are plenty of businesses you can start with no money, like tutoring or web design, there are a few things you’ll need to buy for most industries. For example, a website is always a good use of your money because it makes you look professional. Others will require some up-front cost or loans. Set a budget and stick to it as much as possible.
Part 5: Make it Official
Now that you’ve completed the research necessary for your business and product, you can register your business with the state. Depending on your business, you won’t need to do this step (for example, a freelance writer or contractor), but you will still need to understand what you’ll pay in taxes during each term.
You should also protect your business during this step by purchasing insurance if necessary. General liability and business income insurance is a good start, but adding data breach and professional liability coverage could save you from potential lawsuits.
Part 6: Start Building
You can now start marketing and growing your business after establishing a plan and acquiring the necessary licensing and insurance. A word of caution: don’t grow too fast in the beginning because you may not have the capital to keep up with demand. Failing at this step can cost your business in the long run.
If you grow at a steady pace, you’ll be able to scale your company without forking over a large sum of money you don’t have. Focus on keeping your customers happy, and the rest will follow.