Have you ever looked at the big companies like Amazon, Google, eBay, Alibaba or Facebook? They are multi-billion dollar corporates that make you and your dreams look like a speck of dust. These companies are the envy of most entrepreneurs. It may surprise you to learn that these big companies were founded by individuals like you and me. Most of them started in their founders’ garages and homes. But through time and hard work they grew into the huge giants that they are now. Exactly how did these companies grow? What is it that they did that we can apply to our small ideas and grow them into big corporate businesses? This article will touch on some of the answers to this hot question. While it’s not possible to exhaust everything, we will touch on a few essentials.
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1. Develop your idea into a concrete product or service.
Every business whether big or small starts with an idea. This is usually where most companies are destined to fail or win. You have to realize that it’s not every idea that can succeed as a business. Some ideas may be interesting to you but to no-one else. If your idea is to succeed as a business it has to go beyond just you. It must address a sizable number of people who are willing to pay money for it. Your idea must be influenced by various factors such as solving a problem, providing a better way of doing things, making life better for users, giving people a status symbol, etc. There might be plenty of ideas around but you need to narrow them and come up with one which can be turned into a business. This idea should enable you to make a profit at one point.
Businesses don’t start with simple ideas, but instead they start with problems to be solved or opportunities to do something better.
Once you have settled on an idea to pursue, it’s time to develop that idea into something concrete that end users can actually pay for. This can be a physical product or a service you offer to your customers. At this stage you may want to scout around to see if your product is really important to someone other than you. Test it with friends, family and other close encounters. If it generates interest then you might be on to something.
2. Choose a rewarding business model.
The next stage is developing a rewarding business model for your business. A business model is how you plan to make money out of your business idea.
A great business model describes your business logic and supports it with meaningful numbers and metrics.
There are different business models so doing your research is important here. It’s also important to note that some business models simply will not work with certain types of products. An example is selling food as a subscription. Food is generally sold as a once off commodity. Some examples of business models include:
a. The pay as you go model
In this model, usage is metered and the user pays according to their consumption. Most telephone network operators and internet access providers use this model.
b. The recurring revenue (subscription) model
This model allows subscribers to pay for services on a per period basis. Companies like DSTV operate on such a model.
c. The franchise model
In this model, you find someone with a successful business model and then pay royalties to them. That way you instantly benefit from a proven system instead of starting one from scratch. Companies like Spar and McDonalds use this model.
d. The low cost model
In this model, costs are kept to a minimum allowing the business to reduce their prices to a very low price. The trick is then to push huge volumes to generate profit. Wholesalers use such a model.
e. The freemium model
This model offers their basic offering for free and extras at a cost. The trick is to gain a lot of users since there is no cost to the user. Once a user signs up you then work hard to convert the free users into paying users. Companies like Skype use such a model.
f. The affiliate model
This model focuses on finding new customers using existing ones. They pay out an affiliate commission or offer rewards for every referral to the business. Dropbox uses such a model
g. The addon model
This model focuses on making the price of their most basic offering as low as possible. They will then charge more on the extras that users request.
h. The direct sales model
This model focuses on selling directly to consumers thereby eliminating the need for distributors and middlemen.
3. Register and incorporate your business.
Once you have developed both a product offering and a solid business model then it’s now time to formalize your business by registering it. Registering your business is a huge step but it’s very necessary. It makes your business separate from you. It becomes a corporate citizen with it’s own legal persona. You need to make your business idea come to life by incorporating your company. Here are 8 reasons why you should register your company.
In Zimbabwe you can register your business as a Private Business Corporation (PBC) or a Private Limited Company (PLC). Many company registration consultancies exist who are able to help you throughout your company registration process. You can also get company registration services in Zimbabwe online. Having this step completed as early as possible is crucial as it can help you avoid much pain later. Once you launch a product and then try registering it, you may discover that your chosen name is not available for registration. So it’s wise to choose and register your name before going further.
4. Organize and acquire funding.
It cannot be disputed that every business needs capital in order to be operational. Securing funding for starting a business is a big problem for many start-ups especially in Zimbabwe. Certain considerations must be taken into account before approaching any venture capitalists, business angels or putting a hand in your pockets. You need to be clear about how much is needed and where are you going to get that money. Ask yourself questions like:
- How much do l need to start my business?
- How much can l raise from personal savings?
- Are there any friends or family members who are willing to invest in my idea?
- Who else can l approach to help in funding my business idea?
Whether you have capital with you or not, you now need to document your financial information. Have a budget to work around, which shows your expected revenues against expected expenses. This tool will be helpful in seeking funds from investors or financial institutions. You should always bear in mind that a business must not necessarily be started with a huge capital.
5. Choose a suitable location to work from.
Great care should be placed when choosing where to locate your business because once a mistake is made, it will be difficult to reverse it. Business location should conform to the type of business, its operations and target market. It should be noted that, your chosen location also affect the brand image you will possess later. A wrong choice of location would mean a need to work harder to get people to your place. Therefore, you should choose a location that fairly represent your perceived identity. Choose a building that fits well with your target audience. You can’t operate from a dilapidated and dirty building and expect to attract uptown customers. Situations do differ, there is no one size fits all here, all you need is to assess different factors that apply to your type of business, not forgetting your ability to afford the accommodation cost of the desired location.
6. Establish a distinct brand identity.
Your brand identity is how you want to be perceived by your customers. You need to design a visual brand identity for your business, which can be a name, color, logo, design or a combination of them e.g Coca Cola with its red ribbon. This will be a representation of your business which clients and customers should easily identify. It has been found by researchers that after a visit to a website, the color choices, size of text and the mood of the design automatically tells a customer exactly how to feel about your brand. A visual representation that does not match company values will be confusing and misleading to your audience. Therefore, customers will not commit funds to something untrustworthy. Visual brand identity is not about photos and graphics alone, but its summing up everything customers see and perceive when they look at your business. Brand identity creation is something you can do yourself but it may be wise to engage the services of a brand identity consultant.
7. Have a strategy in place for marketing and networking.
Having established a brand identity, you need to device tools and techniques to achieve your sales goals. This is done by doing situational analysis, target market identification, setting marketing goals, choosing marketing communications strategies and setting a marketing budget. Mere documentation of a marketing strategy is not enough, for it to be successful it should be realistic and practically implemented over time with reviews put in place. Having this in place should help a business to grow, increasing brand awareness and creating trust with current customers.
Having spend your nice 10 minutes or so reading this article, your idea for starting your own business should never be left hanging in a book, so why not give it a try and execute it. Remember this – “there will always be a market for something helpful“.
This post was sponsored by FINWORTH CONSUTANCY