Step by Step Guide to Building Your Own Business

Welcome to Lesson 3!

Starting a business is one the most challenging and rewarding things you’ll ever dare to do. The whole process really depends on the type of business you are trying to put together, but it is simpler than you might think. The process can be simplified maybe up to 5 general steps but I would assume that you’d rather see a more detailed approach so I have tried to expand them below as much as I could.

A Word of Caution!

The steps have been expanded to 17 steps but do not get turned off about it because most of them are really quite straight-forward. But “straight-forward” does not also mean it will only require little time from you. My advice is to keep reading to know how your own situation will fit in with each required task. If somehow you found the steps to be overwhelming, don’t worry; I will reveal a business model later that will not require you to do all the steps.

Steps to Building Your Own Business

Here we layout the steps that you can follow to build your own business. Depending on the type of business, you may need to brainstorm with your business partners as you go along the steps. You may also be able to skip several steps, or may be able to do them completely out of order. So follow these steps however it suits you best:

Step 1: Define your personal motivation

Your personal motivation is what will fuel you to push thru against all anticipated challenges in building your business. It will be your reason to conquer all difficulties and not surrender.

Therefore this is probably one of the most important steps in building your business. In here you explain why you would want to have your own business and why you should succeed.
Examples of good source of motivations can be coming from any of the following:

• you want to secure your family’s financial future
• you wish to be a significant influence to help a cause
• you want to have time freedom and financial freedom
• you feel that you have no choice because you saw your future will be a difficult life if you stay in the current path

Step 2: Define the purpose of your business

In this step you give clarity to the focus and direction of your business. In defining the purpose of your business you can include the following sub-steps:

Define your vision

What will be the end result of your business? For example, “To be the world’s most trusted brand in dietary supplement.”

Define your mission

Explain the reason why your business exists. For example, “To provide the best solution for eliminating nutritional deficiency problems worldwide.”

Define your objectives

What will be the actions or goals in order to accomplish your vision and mission? For example, “To supply the newest and most advanced dietary supplements that are endorsed and recommended by medical practitioners.”

Step 3: Research your market

Arguably, this should be the very first step in starting any business. You don’t have a business when you don’t have a market. Therefore this comes first before actually coming up with a good product. You don’t first create a product hoping that there will be a market for it. No, the absolute correct way is you first find-out what your market needs and only then you create the product to meet those needs.

Some important part of your market research should include:

• Demographics – i.e. age group, gender, location, language
• Disposable income
• Common problems or needs – i.e. weight issues, money
• Buying behavior – i.e. trends, emotions, wants, needs
• Market size and realistic market share to penetrate
• How will you reach your market? – i.e. social media, clubs, email, TV
• How many competitors are there?
• What difference can you bring to the market?

Step 4: Create a full-pledge business plan

A well written business plan can help you secure finance, establish the direction of your business and bring clarity to the strategies you will be implementing toward your goals.

Some important questions that need to be addressed in the business plan are:

• What products will you provide?
• Is your idea viable?
• How will you protect your ideas?
• What skills will you need?
• What resources will you need?
• What legal obligations do you need to meet?
• Will you be financially capable to start a business?
• What are the foreseeable risks and your respective contingency plans?
• How much profit do you want to make?

Your business plan should also include the details of previous steps 2, 3 and the next following steps.

Step 5: Educate yourself

Having done your market research you should be able to tell by now what skills are needed to operate your business. These skills don’t necessary need to be learned in full detail as you can outsource most of the skills by your choosing. Most of the time, you only need to learn the very basic concept how things work so you will be capable enough to make decisions on where things should go. However, outsourcing or hiring people will add up to the cost of your business operation, but on the other hand it saves you time that can be utilized on the more important tasks in your business. You should only decide on which areas you should outsource where it’s most cost effective.

Some of the important skills to learn are:

• Business Accounting
• Feasibility Study
• Softwares: MS Excel, MS Word and PowerPoint
• Internet applications: Email, social sites and web search
• Internet Marketing: mailing list, sales funnel, viral marketing, blog, video marketing and Search Engine Optimization
• Sales and Marketing i.e. selling strategies
• Business and Project Management

Step 6: Create your product creation plan

Your market research would have given you ideas on what products you can sell to your niche. In this next step you describe or layout in a flowchart the process of creating and storing your products. The process should include time and cost studies so you’ll have a very good basis in scaling up your production and consequently your profits.

Step 7: Create your sales & marketing plan

Having known how much it will cost you to create your products, in this step you establish your desired profit margin—taking in to consideration your pricing strategies and the extra costs associated with the marketing, warehousing, delivery and some applicable duty taxes. You also describe your strategies on how to acquire new customers and how you will be implementing a selling cycle that can include some sales strategies like cold selling, hot selling, up selling and down selling. It is also a good idea to include the details of your after-sales support and your strategies to acquire consistent re-orders from your existing customers.

Step 8: Create your staffing plan

Remember that one of the major reasons why you want to be successful in business is to free yourself of work-hours and ultimately have the “time freedom”. A prudent way to achieve this is to use the power of “leverage” where you utilize other people’s time and resources to work for you. Having done the previous steps, you should know by now what skills will be required and how much manpower is needed. So in this step you allocate appropriate people to their duties and responsibilities; decide on their working hours; and establish their pay rate. You also describe here how you will implement the necessary training to skill and motivate your staffs or employees.

Step 9: Create your operations model

In this step you layout your business organization including stakeholders or collaborators. In here you identify member responsibilities and describe in a flowchart the mechanism of how your business organization will work.

Step 10: Create your budget plan

In this step you allocate cash flow plan for your first to second year of business operation. You basically define here your sales targets, overall operational costs, target net profit and growth projections.

Step 11: Create your growth plan

In this step you bring clarity to your strategies to allow for your business growth. You describe here the minimum targets to achieve your growth goals. You also identify opportunities where you can increase your sales and profits. Such opportunity is to create new products or even penetrate more market share.

Step 12: Create your risk management plan

As there are inherent risks to any venture it is best to anticipate them so you can formulate contingency plans way ahead of time to minimize–or even eliminate most risks. These risks pose danger to the survival of your business and may be in the form of:

Financial Risks

Where your cash flow has been negatively affected by slow collection of receivables, currency rate drops or declined finance.

Market Risks

 Where the demand for your product declines or there is an occurring negative publicity

Competitor Risks

Where there is an upsurge of competitors copying your business model or a competitor is beating you

Legal and Regulatory Risks

Where you have been negatively affected by new product regulations or there is a dispute arising from poorly structured agreements

People Risks

Where you are failing to hire, motivate, retain the right people for your business

Step 13: Secure your capital

To fund the start-up and the initial operational cost of your business you may do the following options:

• Apply for a bank finance
• Apply for a government grant
• Seek help from crowd funding
• Loan from friends or relatives
• Access your super annuation
• Find a share partner
• Use your savings

Step 14: Complete your legal obligations

For your business to be legitimate you have to:

• Register a business name
• Register a Business Tax ID
• Register applicable Trademarks
• Secure applicable insurances, i.e. public liability insurance
• Register a domain name if required

Step 15: Set-up your business

If you already have the capital, in this step you set-up the needed resources, facilities and assets to kick-start your business.

Step 16: Launch and operate your business

Here you implement everything that is directed by your business plan to generate sales and profit as per the targets you have set out. Remember to keep track or document significant activities and figures regarding the performance of your business so you can implement crucial actions when it’s most appropriate.

Step 17: Review your business plan regularly

Regularly re-assess what is in your business plan with the aim of continuously improving your business performance towards a healthy growth. You may need to revise your business plan contents however it suits your needs.

Top 6 Personal Problems in Starting a Business

After going through the 17 steps in building your business, I’m sure you are fairly overwhelmed by the amount of work involved–and maybe now having some doubts about the business as your quickest path to getting wealthy. On top of that, you may have some of the following personal problems too:

1. I am not good at, or don’t like, selling things
2. I don’t know where to get the products to sell
3. I’m not good at motivating people
4. I am not good with computers or internet
5. I don’t have time to make follow-ups and build business relations
6. I don’t have tens of thousands in dollars as a capital

Top 15 Challenges of Running Your Own Business

In addition to some of your personal problems above, you may also have to face a lot of challenges while you mind your own business:

1. Stock, inventory and the physical cash required to start
2. Long leases and responsibility to Landlord
3. The first 2 years of business will not generate enough income
4. Customers will need to see your ad campaigns 5 to 8 times in different occasions before they will decide to buy
5. Upsurge of competitors copying your business model
6. Poor sales performance due to unmotivated staff
7. Poor sales performance due to ineffective online presence
8. Managing staff, superannuation and payroll tax implications
9. Work overload due to insufficient staff
10. Work overload due to inability to automate repetitive processes, i.e. capturing leads, follow-up emails, accepting online orders, product presentations and after-sales support
11. Isolation because of work overload
12. Financial breakdown due to poor branding and pricing strategies
13. Declining business growth due to market saturation
14. 87% of businesses fail in the first 5 years
15. You may even work harder with insufficient income on start-up

Hang On a Minute. Can I Still Win it?

Okay, let’s just pause for a moment here and try to re-asses the current situation. After knowing the possible problems and challenges in starting-up and running a business, I’m sure your doubts are getting bigger now on whether having your own business is really the quickest way to getting wealthy.

As we review the points from the previous topics, we can say that having your own business is definitely more advantageous than having a high paying job. Such benefits that stand out in having your own business are: that it can be inherited by your children; it’s a more possible way to attain time-freedom quickly; and it requires less time and process to acquire financial freedom. It’s worth noting as well that these advantages can only be achieved quickly if your business will have the 10 essential attributes for efficient transition as pointed out on Lesson 2.

Also, as we saw from Lesson 1, you really don’t have a choice on the matter but to transition yourself into having your own business. This is because you are not gaining the better end of the deal if you are investing your own extra time and resources in developing your employer’s business rather than your own business. Therefore the problems and challenges that you may have that are halting you down in pursuing your business goal must be addressed by you full-on. Addressing them may not be that difficult because you can just find and choose a “business model” that can virtually provide all the solutions for you. A business model is the way in which an entity, such as a company, generates revenue; or it simply describes the manner how an entity make its money.

So where do you start searching for a business model that you can adopt to solve all your problems?

Here’s good news. You don’t have to spend long tedious hours in researching and you don’t have to deal with so much trial and error. It’s because you just happen to be “in the know” when you decided to continue learning from my lessons so far. The business model that I will reveal here can be a great time and money saver for you. As you will see soon enough, it solves all the problems and challenges that you have just read in the previous sections.

Ready to find out? Go to Lesson 4!

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