Starting a new business can be an exciting endeavor, and most startup owners enjoy choosing a business name and designing a logo. However, the less-heralded steps, such as doing market research and drawing up a business plan, are equally critical to ensure that your new startup survives over the long run.
Read on as we provide a step-by-step guide to creating a startup in Columbus, OH, in 2022.
Choose a business idea
Why do you want to create a startup? A clear understanding of your target audience and the value your business will add to their lives will guide you in making your business concept a reality.
Your business should also serve a growing market to ensure long-term sustainability. Trends or fads generally have a short product lifecycle, which might restrict future business growth.
Validating your business idea is critical to determining if your offer is feasible. The goal of validation is to get your target audience to commit to your offer and provide you with feedback. Setting up a temporary store and taking pre-orders is one of the most effective ways to get your feet wet and find out if a market exists for your product.
Draw up a business plan
A business plan is a document outlining how you will reach your business objectives, and it serves as a roadmap for creating your startup. Formulating an extensive business plan will help you:
- Make critical decisions
- Determine your startup’s viability
- Identify potential pitfalls
- Set clear benchmarks and objectives
- Obtain financing
- Mitigate risks
Your business plan should include the following:
- Market analysis
- Competitor analysis
- Marketing strategies
- Cash flow projections
- Operations and logistics strategies
A market analysis detailing the demographics of your target market is integral to your business plan. This section will help you understand your buyer persona, their needs, and their behavior to formulate effective marketing strategies.
When doing competitor analysis, keep in mind that stiff competition in a market is not necessarily a bad thing, as it indicates an established market with a high demand for your offers. However, if you are entering a competitive market, you’ll need to implement brand and product differentiation strategies into your marketing plan.
When drawing up your business plan, research the regulations and licensing requirements specific to your industry and location. Consult with a lawyer to avoid run-ins with regulatory authorities.
A break-even analysis is a valuable method for generating cash flow projections. Conducting a break-even analysis lets you calculate the point in which total revenue and total costs are equal, and cash flow is neither negative nor positive. In other words, this analysis lets you determine when your businesses will become profitable so you can set your production objectives.
Break-even analysis formula:
Break-even point = fixed costs / (average sales price per unit – variable cost per unit)
Setup your business financials
Covering your startup costs is a significant challenge new business owners face, especially if they want to leave their jobs. Many businesses run dry before turning a profit, which is why you should never underestimate the startup capital amount you need.
When calculating your startup capital requirement, consider the following:
- One-time expenses, such as licenses and permits, branding, and web design
- Ongoing expenses, such as payroll, rent, and taxes
- The cost of acquiring assets, including starting inventory, equipment, and vehicles
- Starting cash to cover deficit spending until you reach your break-even point
After calculating your seed capital requirement, you can approach lenders for funding. Popular funding options include:
- Business loans from a bank or the U.S. Small Business Administration (SBA)
- Business grants, such as government grants
- Private investors
You’ll also need to open a business bank account and apply for a business credit card when setting up your finances.
Select a business structure
The business structure you choose will have various tax and personal liability implications. Business structure types include:
- Sole proprietorship
- Limited Liability Company (LLC)
In the case of a sole proprietorship or partnership, the business is not a separate legal entity, and you have unlimited liability as owner.
A corporation is a separate entity that can own property, pay taxes, and enter contracts.
An LLC is a hybrid business structure that offers the same legal protections as a corporation but the same tax advantages as a partnership.
Find the right location for your business
After acquiring funding and registering a business entity, you can build your startup. The first step is finding a suitable location where your business can operate.
When searching for a business premises, you need to consider various factors, including accessibility, floor space requirements, and costs, while making sure that the location meets all zoning requirements. Your location can also have marketing value, especially in high-traffic areas.
Develop your business branding
Your branding is at the foundation of your future marketing activities. Key focus areas of your business’s branding include the logo, brand colors, and taglines or slogans.
Build your infrastructure
Once you have an office or retail space, you can get your infrastructure in place:
- Plan your floor space configuration
- Purchase office equipment, such as a cash register, furniture, and shelves
- Hook up your internet connection
- Source your starting inventory
- Purchase all equipment you need for your service-based business
- Develop and publish your website
Assemble a team
Initially, you might prefer doing most of the work yourself to save costs. However, you can increase productivity and revenue significantly with the right team. Create positions within your business, and determine which skills each position requires. Then, advertise the positions and fill them before you launch.
Start implementing your marketing strategy
When you are ready to serve your target market, you need to implement your marketing strategies. Running a paid ad campaign on social media or Google can be an effective way to generate interest in your initial offers. You also need to claim and optimize your Google My Business listing to market your products and services to a local audience.
Search engine optimization (SEO) is the most effective marketing strategy to generate consistent and organic traffic to your website over the long run.
Launch your new business
After completing the steps in this guide, you should be ready to run a successful business. Your launch can be an event, an advertising campaign, or a special sale. Implementing a launch strategy will draw attention from your target audience and get the ball rolling.
With your business up and running, prioritize customer service and product quality. With continuous learning and adaptability, running your new business can be a rewarding and life-changing experience.