Not all great ideas can be converted into a functional, sustainable business. The statistics are quite disturbing: nearly 90% of startups fail, and no one wants to be a part of this tendency. How to start a business that will benefit customers and will not deplete your and your investors’ resources? To make sure the idea is not just another trend ‘bubble’, you need to develop a business plan, conduct market research of your competitors and your target audience, develop a monetization strategy, and get the right staff on board.

Laying the groundwork and identifying the necessary steps to execute your idea will bring you closer to achieving your vision. Start with brainstorming on a piece of paper. The more thoughts and ideas are written down, the better. Then create an action plan for your product or service and divide each item into sections. Although there are countless options, writing down your plan forces you to think it through, helps to structure your thoughts and to develop a clearer picture of what you wish to achieve. The following steps to starting a business will help you to make your idea a reality.

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Competition

Before you came across this article, other people had asked themselves, “What do I need to start a business?” That is, you can learn a lot from those who already know how to turn ideas into opportunities. Therefore, observing your competitors on a global scale is your first step to success. Pay attention to both their wins and mistakes. That will help to objectively evaluate your idea, as well as provide valuable insights on how to stand out. Competitor analysis is a method of objective evaluation of businesses operating in a particular market segment.

SWOT analysis is usually used to examine a competitive landscape during the preliminary stages of market research. It is a structured planning method that evaluates strengths, weaknesses, opportunities, and threats to a company, project, or idea. Strengths and weaknesses refer to the internal factors, while opportunities and threats are external.

Start with analyzing your business strengths. These, for example, can be the location of your business, your budget, your financial capabilities, etc. In contrast, your weaknesses are the factors that put you at a disadvantage in front of other businesses. For instance, a lack of new products, staff turnover, risky market segment, and so on. Then, move to your opportunities. Opportunities should not be confused with strengths. The former are favorable, hypothetical situations that have high chances to occur in your business environment, while the latter are the real-time resources or capacities your company uses for achieving business goals. Similarly, threats are potential factors that may present a challenge for your business.

SWOT analysis for opening a business

A SWOT analysis helps businesses understand how they can use their strengths to reach their opportunities and overcome threats. They learn how to minimize the influence of their weaknesses on threats and compare their business potential with the competitors’. Conducting this analysis will give you a clear view of the first steps to starting a business that will outstand the competition. The limitation of SWOT lies in the fact that it does not prioritize factors — this should be done by you and your team.

SWOT analysis for starting a business

​Target audience

Understanding the market, you will get to one of the most critical stages of executing your idea. You need to have a clear image of how your product or service is going to solve your consumers’ problems. Conduct the preliminary research of your market by defining your target audience’s gender, age, location, profession, etc. It will allow you to create a picture of your buyer persona.

What is a buyer persona? A buyer persona is a hypothetical character representing your ideal or your average client. Why is it important? Because you have to know how to engage a prospective client if you want to start a business that will be doomed to success. Nowadays, high engagement figures do not matter if you attract the wrong audience. Suppose that you have a design studio and aim to find more people to offer them your services. You manage to regularly reach nearly 1000 people with your social media posts, but these figures do not convert into profit. Why so? Simply because you reach random users, not your target audience.

A buyer persona offers you a more personalized view of your target client. It is a kind of personal narrative that tells you a story of your audience, their interests, preferences, challenges, and pains. The video tells you more about what buyer persona is and why you need it:

To create your buyer persona, gather data about your clients. Where do they live and work, what are their hobbies, who or what affects their decisions? Then classify this data to segment your audience and focus on their roles and goals while starting a business.

Continue developing your ‘Buyer Persona’ by interviewing representatives of your target audience. To validate the data, talk with your employees who closely communicate with your clients. Information gathered will give you valuable insight into your ideal customer needs and motivations that influence their consumer behavior. Here is how the information about your buyer persona may be organized:

buyer persona for setting up a business

Map of empathy

What do you need to start a business? You need to know your client well. The map of empathy, created by Dave Gray, is a tool that helps not only determine who your ideal customers are but also gain a deeper understanding of how they are going to behave.

To do empathy mapping, you can involve your stakeholders, sales representatives, marketing or product development specialists. Together, you will try to understand the real needs and problems of your users and learn more about who your audience is. The empathy mapping process is the most effective at the stage of product/services design when you already know something about your buyer persona but have not integrated this knowledge into conceptualizing yet. Empathy maps give businesses a great understanding of their users, help generate insights from the prior research, and increase the team’s awareness of client personality.

how empathy map helps set up a company

Empathy maps differ in format. Above, you can see the most common type of such map. To start with, put your target customer into the center and divide your sheet into 4 parts as demonstrated in the image (plus the sections of pain and gain at the bottom). Provide information for each. The categories under analysis will help you explore the external context under which your users live as well as their internal mindset.

Empathy maps can be adjusted to your business needs and situations that require investigation. Sometimes, the category of think and feel is hard to explore. Nonetheless, understanding how your end-user makes decisions not only helps to create an excellent client experience but aids the development of a product that exceeds your customer’s expectations.

Monetization

Working out how an idea can make money is one of the most important parts of your product or service development process. It can not only set the direction your business will take but also determine the product or service itself.

Setting objectives is a significant part of the planning process. Goals describe what you want to achieve and help you find the best way to your desired result. SMART (Specific, Measurable, Attainable, Relevant, and Time-Based) setting process is an effective way of placing and achieving your business goals. A specific goal eases the planning process, whereas a measurable goal keeps everyone engaged and on track. Prioritizing the tasks your company must achieve during a given period will help to streamline your operation. It is vital that the objectives you set can be accomplished based on the current state of your business and employees.

Your sales strategy will have to change depending on the product or service you are planning to sell and your ‘buyer personas’. You can utilize the information from your target audience research to create targeted social media campaigns, use paid advertising, and start producing content that would be of value to your demographic.

​People

Knowing how to turn ideas into opportunities is not enough, you also have to know how to execute them properly. The key lies in three core areas: people, strategy, and operations.

three core processes in starting a business

A well-chosen team is essential to any organization’s success. People are the ones who react to market changes. People create strategies based on their analysis and translate these strategies into the real world. A project is much more likely to perform well when people who work on it are moving towards a shared purpose, exchanging their perspectives, skills, and experience. Good teamwork creates synergy — where the combined effect of the team is greater than the sum of individual efforts.

To assemble an effective team, determine the qualities you are going to find in your future teammates. In practice, check whether candidates demonstrate the desired traits and can easily go out of their comfort zone. Also, test their conflict-solving abilities and make sure that their values fit into your organization’s culture.

Support

At the first steps of starting a company, you will need support, be it the financial, strategic, or moral one. Let’s start with the ways to find financial support and convince investors that your idea is worth considering.

Finding investors

You can look for potential investors online or approach local entrepreneurs and established business owners. Local connections may either give you a direction for finding investors or decide to invest in your product themselves. If you see people getting interested in your idea, pitch it in an engaging way. While pitching, do not forget to present information transparently and precisely using a format of presentation. Various local events related to business may be a place where you can start your search.

best countries for setting up a business

When it comes to looking for funds online, there are various websites that connect startuppers with investors. Start with LinkedIn and Reddit to set the connection with the right people. Generate content related to your idea. Becoming a content contributor for a recognized online source will let you reach a lot of business-oriented people. Also, you may launch the advertising campaign in some of the business magazines or publications.

Choosing the right partners

Nowadays, being present online is a must-have for a company that wants to reach success. Before opening a business, you have to make sure that it is well represented in digital form. To achieve this goal, you will have to hire a software development team that will help you turn your goals into reality. A great idea is to look for an outsourcing partner as this way of cooperation is affordable and ensures high quality. If you choose to outsource, you should know the difference between dedicated teams and staff augmentation to opt for the method that suits your business the most.

While looking for a partner, consider what types of products the team specializes in. Check client reviews and explore products made for them by yourself to assess the quality and tech competence of a potential partner. And if you do not know for sure what kind of product your users expect to get, start with an IT consultation. Digital consultants will study your case and help you build a consistent and engaging strategy for setting up a business.

Summing It Up

Starting from scratch is always challenging and risky, but if you have a clear plan in front of your eyes — you see the direction of how to set up a company and where to move to. You can put these 6 steps into a checklist to go through it while opening a business. It will help you not to miss anything vital and offer services/products that attract precisely your prospective clients.

If you need help turning your idea into reality, contact us. Our skilled developers have a proven track record of delivering results.