A report on business demography placed Italy with the largest active enterprise population at 3.9 million. However, the number of bankruptcies remain historically high despite their decreasing rates in recent periods. In the US, as high as 50% of businesses fail within their first five years since starting up.
Bad business ideas or poor business skills? Not necessarily. The culprit may be attributed more to poor planning and execution. Starting a business involves a lot of things that need careful considerations, meticulous planning, and precise execution. Bypassing these actions will drive your business down the failure path.
To help your business survive and reach its 5th-year birthday celebration and beyond, here are eight actionable steps to take and jumpstart a successful business.
Actionable Steps for Starting a Successful Business
1. Perform Market Research
Want to own a castle, historic villas or even a monastery right into the heart of Italy? Your dream may come true with the country’s craziest Strategic Tourist Plan of giving away 103 such buildings – as long as you shoulder the renovation and turn it into a tourist spot. Sounds really great, right?
But before you invest all your hard-earned savings and commit all your resources to a new venture because you “think” it is a great business idea, make sure that people will actually buy the products or services you are planning to sell. You’ll find the answers you need when you perform market research.
Through market research, you can get confirmation if your “great” business idea really holds some value among your targeted clientele. You can do so by physically doing surveys or interviews, or run online ads on websites, search engines and social media – and get an insight of what your targeted market has to say.
2. Create a Detailed Business Plan
You can then take the next step and formulate a detailed business plan. This is a must-do business start-up step that may spell the failure and success of your venture. A sound Business Plan contains the following sections.
• Executive Summary
• Company Description
• Business Description
• Market Analysis
• Competitive Analysis
• Organization & Management
• Service or Product Line
• Marketing & Sales
• Funding Request
• Financial Projections
3. Identify the Legal Business Structure You Want to Start Up
Starting a new business involves registering with the government. Before that, you must first identify and establish the legal structure of the business you want to put up. Common business structures differ from one another by how the business is taxed and the kind of risks the owners will take when starting up a new business. These business structures include:
• Sole Proprietorship – Owned and operated by a single person. The proprietor and the business is seen and taxed as a single entity
• Partnership – A single business with ownership shared by two or more people. Each partner shares in the profits, losses, and liabilities of the business.
• Limited Liability Company (LLC) – There is a personal responsibility of the owners with respect to risks in the legal and financial dealings of the company.
• Corporation – Ideal for bigger companies that have multiple staff and employees. The owners and stakeholders are distinct from the business itself, which is considered a separate legal entity.
4. Make Sure All Regulatory Requirements in Your Country are Met
Italy was ranked 50th overall among 190 economies in the DB 207 by the Doing Business project by the World Bank Group. This is a measure of the ease of doing business in a particular country, including how a new business can meet all the regulatory requirements.
This is a very important next step before your business can start legally in the country you will be operating. Each country has its own procedures and protocols, so it is important that you understand what is required before you make your next move.
5. Secure Your Business Funding
A very important part of your business plan is to identify the source of your funding in starting up the business, either from your own resources or from your investors. There are many ways to generate your start-up capital and the most common resources where you can get external capital is through:
• Seed Financing – a financing investment initiated by the founders, partners or investors in exchanged for ownership of preferred stock
• Accelerators – funding, and capitalization are obtained through competition that involves public pitches.
• Small Business Loan – funding and seed capital comes from money loaned to the owners by a bank, a financial institution, lenders, and even community development organizations.
• Crowdfunding – money is obtained from donors through a crowdfunding platform. Some of the more popular platforms include Indiegogo and Kickstarter. The donors will not receive an ownership percentage but will receive a token as defined by the project owners.
• Venture Capital Financing – In this structure, angel investors will provide a substantial seed capital to increase the value of the company as quickly as possible, if they find the business highly viable for creating substantial profits.
6. Use Subcontractors Whenever You Can
If your startup business is not yet capable of sustaining full-time employees, then it would be wise to take the next step and hire the services of subcontractors. These subcontractors will work with you on a contractual basis, which you can terminate once your business has stabilized. This is ideal for business ideas that would require a certain push to get started but lacks the resources to get permanent employees that will be in it for the long run.
7. Make Use of Available Tech
You should also make use of whatever technology that is available to you when you are just starting up. Similar to hiring subcontractors, you can minimize the cost by using free or open-sourced business solutions to help you with accounting, customer relations, project management and collaboration. You can scale up later and make use of more sophisticated solutions once your business has grown and has enough resources.
8. Network with the Right People
To make your business a success, you cannot achieve it by simply doing it alone. You will need to network and interact with the right people that will help you establish your business and gain the momentum of turning it into a such. These people include:
• Right Mentors – that will give you the right direction and help you plan for business success by sharing their experiences and valuable insights
• Right Strategic Partners – that will help you with important aspects of your business like financial and technological support among others
• Right Team – that will help you establish your business through the proper execution of your business plan according to the particular roles they are required to do. These include the hiring of skilled, capable and qualified people to be your staff, employees or consultants.
• Right Support Group – that will help you keep a positive outlook on your business venture, inspiring you or giving new ideas that can help your business push forward, survive and succeed
The next step towards your business success is all up to you. You can decide to stick and nurture that “great” business idea in your head, take the actionable steps listed here and get all the gears running towards the proper execution of your plan towards business success.