Starting a business, given its share of rewards and risk, is
a serious endeavor and requires consi derable preparation. If you are going to
accept the challenge, then you must do everything you can to improve your
chances for success. This process involves the mastery of ten steps.
However, these steps are not easy nor simple. Each level involves a tremendous
amount of effort and a lot of street smarts to work effectively. Similar to
playing a video game, you should maser each level before moving on to the next
Here are the ten steps :
Develop your personal and company goals :
success requires a combination of knowing that you are doing and capitalizing on
a good opportunity. Develop and clearly state your goals in a written plan,
which will then serve as your road map. They give you a sense of direction and
help you get to your destination, a successful business of your own, with a
minimum of time, effort, and expense.
Define a viable market
segment for your product or service. The next step in starting a new venture
begins with listening to the marketplace. Define an unmet consumer need first,
before you develop a product to satisfy that need. Regardless of how astute you
may be in business, if the market isn't there to support you, then you cannot
expect to go very far.
However, the majority of entrepreneurs
first come up with a product they think is hot before determining the
existence of sufficient demand for the product. You may have the most exciting
product in the world, and people might think that it's the most interesting
thing they've seen in a decade, but if you can sell only a handful (to your
immediate family and in-laws), you are probably doomed to failure. In order to
verify that there is a need for your product, you must test the market by
conducting a variety of market research.
Develop your marketing plan :
The purpose of the marketing plan is to describe how you
will attempt to create and maintain customers for a profit. It needs to state
whom you are going to sell to, how you are going to penetrate the market, why
you will be successful with your sales campaigns, and finally, how much you will
sell annually over the next five years. The marketing plan will ultimately
become an integral part of your overall business plan, but it must be completed
Write your initial version of the business plan :
Your business plan must reflect the unique environment you will be operating
in as well as what you plan to be your competitive advantage. It is an outline
of the direction in which you plan to take your company, an analysis of your
business strengths and weakness, and a skeleton from which your formal business
plan will later be developed. It will assist you in securing the key people you
need, and it will also help you to begin developing your financial projections.
Determine your financing needs :
Once you have developed a rough business
plan, you can begin to determine your financing needs, which will be
incorporated into your formal business plan. Your marketing analysis leads to
sales forecasts, which determine your staffing level, and defines your operating
budget, from which you can generate proformas (financial projections) and
determine your projected cash flow.
Form your key teams : founders, managers, and directors : Before developing your
formal business plan, you must make sure you have put together a solid
management team. If there are any holes in your team at this point, they should
be filled. The rough business plan you developed in Level IV should help you to
attract top talent to your company. In addition, it will help you to build a
strong board of directors or board of advisors.
Finalize your financing needs and create your formal business plan :
the rough business plan, put together a full-fledged formal business plan. A
business plan should convincingly demonstrate that your business can sell enough
of its product or service to make a satisfactory profit and be attractive to
potential backers. This is the document you will use to secure the financing you
need to get your business off the ground. It will also serve as an operating
manual for your business once it has been funded.
Develop a marketing strategy to obtain financing for your company :
I'm not talking
here about the marketing strategy to sell your product or service, but a
strategy to sell yourself and your company to financiers in order to raise the
capital that your business needs.
Market your plan successfully, attracting capital on your terms : Once you've
developed a strategy for approaching financing sources, you must make use of the
negotiating tools that will give you an inside edge on the competition and
enable you to attract capital on your terms rather than on those of your
Market your product/ service and manage your
business to achieve your goals :
The last step in the process involves the
ongoing management and marketing of your business. Getting a company started is
only half the battle. Once you're in business, you will need strong management
tools and marketing skills in order to make sure you stay in business. Each
step, executed in order, builds a solid foundation for the steps that follow. By
progressing in this manner, rather than using the typical haphazard approach,
you begin to gain the needed experience.
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