Someone would have to be pretty deluded to launch a new business in 2021, right? The pandemic devastated entire economic sectors. Businesses reliant on tourism and hospitality failed as did local bars and restaurants. Retail and movie theater chains went bankrupt while millions more people are unemployed today than were in early 2020.
Except one secret about successful businesses is that many were started during the worst times in U.S. history. Trader Joes, MTV, Netflix and many others all began during recessions. Disney was founded in 1929 –– the same year the stock market crash sent the economy plummeting into a Great Depression. It makes sense. It’s easy to risk everything when you don’t have much to lose. Besides, right now the stock market is breaking records as are home sales. When the country inevitably reopens, plenty of folks will be looking to spend money. So your timing could be perfect –- so long as you follow these four steps to launching a business.
1. What It Is
This is your primary consideration. What are you hoping to sell and why do you hope to sell it? Perhaps you plan to offer a product or service. You don’t need to know every bit of minutiae –– few succeed without adapting –– but you should have a focused vision. Your business should align with your values and your passion.
Think about how you will differentiate your product or service from what’s currently available. MySpace and Friendster were successful social media platforms when Mark Zuckerberg launched Facebook. Yet for better or worse, his idea of merging people’s real-life identity with their online persona to better target advertising made it one of the most successful companies of all time. Although you need not aspire to that level of achievement, there’s plenty to be learned from the precise way he launched his business.
2. Know Your Market
The Internet has simplified market research. You need to understand your potential competitors and the people who might buy your product. Take the time to browse the web. If there’s a near identical product out there, it could mean a return to the drawing board. Perhaps you can offer something at a lower price point or of higher quality. Maybe the personalized service you provide will make the difference.
Online research can help you determine demand for your product, market size, and where your customers reside. You might consider hiring a firm to do more in-depth research along with competitive analysis which will examine other businesses offering your product or service.
Besides examining potential competitors and customers, the Internet also lets you do test marketing. If you’re making a product you could sell it on Etsy or start a Kickstarter campaign. If you’re providing a service, you may want to offer your talents on Craig’s List. Sometimes you can learn a lot with minimal investment.
3. Have a Business Plan
For some of us, this is one of the most boring steps to launching a business. It is also the most important. Cliches are often true. The one about not planning to fail but failing to plan applies here. Businesses that aren’t well thought out are often doomed. You should start by writing down your idea, the market, and how you will sell it to customers. Figure out your expenses and organize how you will meet them. Think about not only how you will make money but how you will exit gracefully if the business fails. Going bankrupt shouldn’t be your only option.
By committing your vision to a tangible form, the business plan shifts your idea from fantasy to reality. Developing a motto or corporate vision can help as well. What do you want to do and why? Your story might inform the company’s story –– differentiating you from the competitors. In the beginning, develop the business plan alone or with a trusted partner. When you have a rough draft, it may be time to bring in a professional. The U.S. Small Business Administration offers free counseling from a large cohort of professionals.
4. Every Team Needs a Coach
Selling my car to hire my first business coach was one of the hardest things I ever had to do. It was more than the first major step towards pursuing my true passion. It was the best investment I ever made. No one succeeds alone. Bringing in someone to provide professional guidance is worth the money. A mentor can lead you to other pros who can advise you on the legal structure your company should have (Sole Proprietorship, Partnership, LLC. etc). If your business needs a location, a coach can help. Mostly, they will serve as a guiding light –– someone who faced the same challenges you’re facing and overcame them. By believing in yourself and taking the time to follow the steps to launching a business, you could join a long list of successful entrepreneurs.