21 Tips for Starting a Successful Business
Updated November 30, 2022
Starting a business has many benefits, including self-employment, income potential and flexibility on the job. However, starting a business can also have challenges. If you're thinking about starting a business, it's helpful to have the support and actionable steps you can take toward growth and development. In this article, we'll explore 21 business start tips to help you establish your brand and develop your business.
Related: Top 50 Small Business Ideas for You
Business start tips to support growth and development
When starting your business, use the following tips for insight into the planning and development processes:
1. Set your goal
It's essential to understand the overall goals you want to accomplish with your business. In addition to making a profit, your goal should focus on making an impact and gaining a position in your target market through your offerings. Consider how you'll break this goal down into short-term objectives that support the growth you want to achieve in your business. For example, a small business owner may set a revenue goal to increase their business's profitability and expand into larger markets.
Know your vision
Align your business with your long-term vision. For instance, envision how you want your business to operate five, 10 or 15 years in the future, including what you expect to provide to your customers. In addition to your future outlook, consider how you'll invest in your business activities as it grows.
Write a business plan
Develop a business plan. Include key elements in your plan like your business goals and structure, your market research, growth strategies and financial information. Your business plan allows you to determine your business needs, such as personnel, special equipment or other resources for operations.
Evaluate your offering
Compare your offerings with similar businesses to understand what customers are purchasing. Understanding the value your customers find in your product or service can help you develop offerings that fulfill specific needs.
For instance, if a business offers similar products as yours, find out how effectively the business sells its products. You can use this data to better position your offerings on the market, since you'll understand how customers regard the products your business sells.
Invest in growth
Reinvest excess funds from your profits into your business as it grows. Marketing and advertising activities, expansion, new equipment and employee development are all examples of important aspects of your business that you can reinvest funds into. Additionally, many small businesses choose to invest excess funds in stocks, shares or money market funds to support growth and development.
Seek funding from investors that can support your business growth. For instance, angel investors, peer-to-peer lenders and venture capitalists are investors who focus on supporting the growth of emerging businesses. Banks and other financial institutions also provide business loan services, which can also help you support the growth of your business. If you opt to find investors, though, it's important to have a formal business plan that details how you plan to allocate the funds your business receives.
Understand your starting budget
Figure out your business budget for essential activities and create a forecast that details your business's financial plans. Most business budgets include outlooks on important financial information, such as operational costs, inventory, sales commission, revenue goals and other fixed and variable costs.
Related: Q&A: What Is Budgeting in Business?
Spend time on marketing activities
Allocate a majority of your business activities to promotion and marketing. These activities drive customers to your business and get your offerings in front of your target market. It's vital that you designate a portion of your business budget to the marketing activities you need for promoting your business.
Create brand awareness online
Include digital strategies in your marketing plans to build your brand's presence online. Social media marketing, email campaigns, funnel pages and other digital channels can help you get your business offerings in front of potential customers. You can also use the data from your online marketing activities to better analyze your ideal customers and their needs.
Build a business website
Creating a business website can support your digital marketing strategies and help you attract customers who may not be in your geographic area. A business website is also beneficial for educating your customers about your business, its mission and its offerings. You can also use your business site to process transactions, maintain customer relationships and introduce new developments.
Analyze your target market
Perform a market analysis to better understand who is most likely to purchase your products or services. Analyze qualitative and quantitative data about your target market, including the market size, your business's position in the market, various customer segments, customer behavior, competitive businesses and how economic trends affect your business. Additionally, your market analysis can give you insight into any challenges or barriers your business may encounter entering the market.
Understand your customers' needs
In your market analysis, take approaches to find out about your ideal customers. For instance, look for patterns in customer behavior, including what kind of products and services your target customers prefer, what they typically purchase and other quantitative factors. This information can help you understand your target market better, which will help you when you begin to develop new offerings.
Spend time analyzing the best marketing and growth strategies for your business. For instance, effective growth and marketing strategies that many businesses use include expanding locations, investing in customer acquisition, reinvesting in product development and expanding online reach. The growth strategies you implement can depend on the nature of your business.
For example, if your business has no online presence yet and you want to widen your market reach, one strategy you might analyze for your business is building a website to direct more customers.
Be aware of operational costs
Develop a method for tracking all operational costs for your budget. Understanding how much your business spends on production costs can help you better allocate funds that come from revenue and sales. It's also important to track your business expenses regularly so you know exactly where cash flow is entering and leaving the business.
Enlist support when you need it
Starting a business can have challenges, so it's imperative you have professional support when you need it. For instance, small businesses typically employ staff members during rapid growth to support operational volume and meet customer demand. If your business can use some extra support during your startup phase, be sure to find professionals who can help your business grow and become profitable.
Research your competition
Perform some competitive analysis on the businesses that yours competes with. A competitive analysis allows you to evaluate competing businesses' strengths, weaknesses and the strategies they use that are similar to yours. Many businesses perform a SWOT analysis that can help marketing teams define competing businesses and identify approaches to appealing to target markets.
Determine selling prices
Evaluate competitors' prices and the prices customers are willing to pay for similar offerings to yours. Use the information from your evaluation to identify the most suitable selling prices for your offerings.
For instance, if you find that your competitors offer a similar product with a high price point, evaluate customers' willingness to purchase the offerings at the high price point. You can then price your offerings higher or lower, depending on what you find in your evaluation.
Figure out your desired profitability
Set your profit goals. Unlike revenue, your profits come from the remaining funds after you have deducted all expenses and production costs. Determine the amount your business needs to earn to remain profitable by evaluating your revenue stream. Your business revenue can give you insight into where you should set your profit goals.
For instance, a business that has an annual revenue of $1,000,000 may set a profit goal of $350,000 after evaluating expected costs and liabilities.
Plan for challenges with an exit strategy
Implement risk mitigation strategies that can help your business in the event the market changes, new developments emerge, competitors take higher market positions or other challenges to starting a business. For example, an exit strategy is one way to plan for challenges in the market, where you can make a strategic plan to sell your business as it becomes successful.
An exit strategy is effective for planning for challenges because it provides a way for you to liquidate or reduce your stake in your business, whether it fails or succeeds. An effective exit strategy can also mean a substantial profit if you sell your ownership in the future.
Establish your values and mission
Connect with your ideal customers by establishing your business's mission and core values. For instance, many businesses' core values focus on building customer relationships and fulfilling customer needs with quality offerings.
Likewise, core values in business can also focus on innovative methods of providing offerings that are sustainable or contribute to a charitable cause. Communicate your values and business mission within your promotional activities to create a positive brand image in your market.
Build a network
Expand your professional networks and connect with other entrepreneurs and business owners. Attend trade fairs, business conferences and other events that support startups and emerging brands. Building your network also gives you an advantage of market reach and allows you to create lasting partnerships with similar businesses, which can lead to greater customer retention.
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