You belong to a different breed. Rather than punching an employer’s clock, you’re building and growing a business. It’s more than a pet project; it’s a venture you’re committed to seeing succeed. But as with building a house, you can’t skip laying down a strong foundation as you are building your business. If you don’t, nothing else you do will have a solid basis to stand on.
Creating and expanding a company may not be a simple task. There’s so much to accomplish and think about. Still, you can rely on the blueprints of people who’ve built enterprises before you.
Consider These 6 Things as You Are Building Your Business
Let’s take a look at six things you’ll want to attend to as you craft your business plan.
1. Define Your Market
You’re not open for business until you sell something. What you sell doesn’t matter as much as the unique value it offers in a sizable market. That means you must understand whom you’re selling to so you can tailor your products to their needs.
Studying your market, including its responses to your prototypes, makes it easier to launch products with confidence. Defining buyer personas also gives you insightful direction for tweaking offerings you’ve already put out there. Market research should drive everything from end to end product design to distribution. Without your consumer’s voice influencing what you sell, you’re giving your competition a leg up on fulfilling the market’s wishes.
2. Pick Your Structure
When you start a business, you won’t go public on your first day. Nonetheless, you do need to choose a legal structure, such as a limited liability partnership. Many businesses start as private companies by design, but you’ll want to look ahead. Map out how big and fast you’re planning to grow. Also, consider whether you want to put your personal assets on the line.
Choosing a limited liability company versus a limited liability partnership can offer more personal protection for owners. If your company gets sued, a litigant usually can’t come after your home and the money in your checking account. With a limited liability company, you can pass down business profits to owners, but you can’t issue stock. Since every structure entails different risk exposures, tax obligations, and profit distributions, examine the pros and cons of each.
3. Assemble Your Tech Toolbox
You may not be a tech startup, but technology is essential to your business. And the more you grow, the more sophisticated tech tools you’ll need. Forward-thinking founders look for apps that can scale with their expansion plans. You may not use all the features and extensions a solution offers now. Yet having those options can prevent you from having to migrate to another platform down the road. Highly successful apps often require some out of the box thinking and tools. For example, the Uber design system was designed specifically to allow all of the hundreds of apps the company uses daily to work in collaboration. This innovation resulted in the now open-sourced design system Base Web.
Let your operations determine what technology to put in your toolbox. Can your team benefit from project management software? Perhaps spreadsheets aren’t going to help you balance the books much longer. And maybe your customers want additional ways to pay, including digital wallets and on-demand credit options.
There are tech solutions for each of these issues, but choosing among them all can be daunting. To streamline your choices, list your functional requirements, assigning a weighted value to each one.
4. Determine Your Talent Needs
As your business grows, you won’t be able to do everything. Even at the beginning, you don’t want to stretch yourself too thin. While you’ll be intimately involved in your company’s operations, you’ll need help. Part of your business plan should include how you’ll acquire employees and managers as the need for them arises. You should also think further ahead, as you may want to step back at some point.
If you want to keep your company in the family, whom will you bring on board for leadership? Will you partner with headhunters and recruiting agencies? You don’t have to figure out how every role will look at the outset. However, you want to ensure you have the talent to accommodate growth. Deciding which functions to outsource and which to keep in-house will also influence your internal structure, whether it’s hierarchical or flat.
5. Secure Your Funds
Entrepreneurs often fund their ventures with some personal savings. In addition, they might get money from bank loans and people in their inner circles. While such sources of cash can help your company get off the ground, it may not be enough as you grow. Diversifying your funding sources can put your company in a more favorable position for sustainable growth.
Other possibilities include government grants or loans, private investors, and even crowdfunding sites. You can narrow down your options if you crunch the numbers and evaluate your risks before you ask for money. While an angel investor’s cash may not come with interest obligations, they’ll want a say in how the business runs. You’ll also want to know what you need funding for, such as equipment. Having your ducks in a row will help you deliver a convincing pitch while minimizing risk.
When it comes to securing funds and engaging employees, employee stock options and shares are vital considerations. Employee stock options allow purchasing company shares at a predetermined price in the future, linking their dedication to company growth. In contrast, shares grant instant ownership and potential dividends, often involving upfront costs. Stock options offer growth potential without initial expenses, while shares deliver immediate ownership benefits. Both approaches align employees with company success, demanding thoughtful program design. When comparing employee stock options vs. shares, it’s essential to consider their immediate benefits and long-term potential.
6. Map Out Your Locations
Determining where your target audience is situated is a step that relates to defining your market. The consumers you’ll be going after live, work, and shop by location. These locations can be physical, bound by a map. But they can also be virtual, with fewer geographical limits on sales potential. Growing your company means choosing where and how you’ll expand.
You may only want to sell online, but keep the supply chain implications in mind. Digital regional companies have e-commerce stores, but they don’t ship everywhere. These businesses focus on serving customers within a cluster of states. Other ventures execute omnichannel strategies with a retail footprint and digital presence. Even though there’s no universal approach, consider your capacities and market needs when picking locations.
Building Your Business
Winging it as you go usually isn’t a good business move. When building your business, you need a strategy to cover the basics. Product designs driven by market research and scalable tech tools that satisfy operational needs make up those essentials. By laying the groundwork beforehand, you’ll successfully support your business ideas from start to finish.
Image credit: Jopwell; Pexels