The 5 Stages of Starting a New Business
What does the American Dream mean to you? For a large majority of people, saving up to start their own business is their way of realizing that dream. While this may seem like a daunting mission to plan and execute launching your own business, it’s an endeavor that doesn’t require a formal education, huge amount of capital, or even experience in the industry you are trying to break into.
There are over 30 million small businesses in the United States, this huge number makes up over 99% of all US businesses. Having a game-changing idea, wanting to build something for yourself and be your own boss, creating financial independence for you and your family; with the many reasons for starting a business it’s clear why there’s no shortage of new small businesses being launched. While these statistics may sound tempting and even encouraging, only about 50% of businesses with employees last more than 5 years. Were not pulling these facts to scare you out of starting a business, but to highlight the importance of careful planning and research before diving into a new venture. Industries are constantly evolving and faster, now than ever before, so being aware of the playing field and knowing what’s going on in your market is crucial.
Planning, Outreach, Execution, Proof, & Growth
1. Business Ideas: Research and Planning
When beginning to come up with ideas for a new business, it’s best to start with a self evaluation. What type of resources do you have at your disposal? Are you currently employed? Looking for a side-hustle or wanting to create financial independence? Do you have the drive to be an entrepreneur? Questions like these are important to ask right away and be honest with yourself, to decide the direction you take with your business idea.
Once you have your idea or narrow it down to few ideas, begin researching those industries, understanding the competitive landscape, and your prospective customer base. Ideally if you decide on an industry, getting your hands on a recent market research report can be a guiding hand in putting together your plan.
This stage can often be overlooked and is honestly a part of research/planning, but can have a big impact on business survival rates. Simply reaching out to established companies you’d consider a competitor, as a customer, can give you valuable insight on what they’re offering and how they reach their target audience. Alternatively, you can also find ways to reach out to potential customers and prepare questions to get a better idea of customer expectations. The last piece of outreach, though take this with a grain of salt, would be getting feedback from friends and family.
This may sound simple enough but you would be surprised how many businesses try to begin selling products or services without;
- Finding out what other businesses in your industry are offering.
- Not listening/asking what customers really want.
This second point may not have been emphasized as much in the past, cue Henry Ford “If I had asked people what they wanted, they would have said faster horses.” However personalization is playing a huge impact in winning over customers in today’s business ecosystem.
Writing down your business plan is important for a number of reasons. It will keep you focused on what’s important, it can help you acquire financing (if needed), and writing the game-plan down can help keep it fresh in your mind (it’s helpful to know what you’re talking about when discussing with potential customers, employees, or financial institutions).
Now that you have a business plan, it’s time to put all the pieces together. Start with figuring out the logistics of your business launch, how you’ll find customers, and what delivery will look like for the products/services that you offer.
4. Business Operations: Proving Your Concept
Now we’re getting to the exciting part, getting your first sale. There are plenty of ways to get there and no two businesses are the exact same when looking at how they generate sales. Regardless, once you do get that glorious first sale, you’re officially in the operations stage of your business.
This can usually be a make or break point for most small businesses. Operations will truly put your business plan to the test and it’s normal to have to make adjustments on the fly. This is where you begin to ask questions like; Is our revenue enough to profit? Are we delivering up to customer expectations? How do we stack up against competition from a customer perspective? Is this business model sustainable? Can we afford/do we need employees?
5. Business Growth
Congratulations if you’ve made it this far! Months/years of long work days and plenty of fires have been put out. Growth can be a confusing and trying period for companies, it can be very easy to run into roadblocks when expanding a business. You don’t want to expand too quickly and over-exert resources, but you also don’t want to be stagnant and lose customers to competition innovation.
At this point there are really too many variables to offer recommendations for small businesses to effectively grow. Investing further in your website and exploring additional avenues of digital marketing, hiring specialists to take your offering to the next level, or moving into a larger office/warehouse space; these are all potential directions to look in when talking about growth but at this stage but it really depends on your competitive gap with leaders in your industry. Here are some questions to ask yourself in the growth phase; What are measurable goals to achieve in 1 year? 5 years? Will we need to hire? Do we need a larger space? How much budget do we have to invest in growth? What would our operations look like if we doubled or tripled revenue?
The right answer usually won’t be obvious, you may need to do some digging to find the best direction to move in. This type of analysis though should be good practice to get you in a continual improvement mindset. You’ve made it this far, what are you going to do to get to your finish line?
What Do We Know About Starting Businesses?
Now where does ReadySpaces fit into this process of starting a new business? ReadySpaces supplies the next generation of turnkey coworking industrial space designed to provide companies with the infrastructure to meet the dynamic needs of their unique businesses.
We’ve worked with hundreds, maybe even thousands at this point, of small businesses and had the pleasure of watching them grow and execute their business plans. We never like to lose customers but getting to see them outgrow our facilities and become leaders in their industry is always an inspiring transformation to watch.
With locations throughout the U.S. and in Canada, we provide a collaborative work environment with a combination of office, warehouse/production, and storage space. Customers enjoy amenities and equipment such as forklifts, loading docks, WiFi and conference rooms, as well as flexible terms – giving them unparalleled flexibility and ability to grow.