Launching a business is one of the most exciting steps of your business journey. From nailing down your niche to calculating your profits, we cover how you can turn your business idea into reality in 10 simple steps.
1. Ask yourself are you ready
Everyone wants to start a business. It’s always fun and exciting to dream up ideas and a future where you are your own boss, and you manage your very own successful business, giving you the lifestyle that you’ve always dreamed of.
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But business isn’t always like this.
Especially during the early days.
It’s hard. The path isn’t clear. It’s a grind. For years.
Really prepare yourself to push through the first through years of the journey, so you can reap the fruits of your labour afterwards.
2. Determine what business to start
Now that you’ve decided that you really want to start a business, there are millions of types of businesses you can start. Ranging from the industry you want to be in, to the products or services you offer, to the business model.
Let me explain.
This is the overall sector where you want your business to operate. My recommendation is to always choose an industry where you have a personal interest. Doesn’t have to be your hobby, but as long as you enjoy learning aspects of the industry or if you have existing connections, then that always helps in the future.
An example is if you love fitness, then that could potentially be the industry you start the business in. There are still a million directions you can take a fitness business in. From simply a personal training class to creating an app.
3. Your Offering
Now that you have an idea of the industry you want to be in, you need to decide on your offering. This is either a service or a product. A service is quite straightforward, you’re usually trading time for money, usually in the form of your own time, but later down the track, you can always hire others to do the service.
A product is when you trade an asset, which could be physical or digital in return for money. If you’re looking to sell a physical product, there are many places you can source your supplier. From sites such as Alibaba if you want to buy from China, or there are always local supplier options available.
Digital products are always a popular product too, unlike physical products, they have much higher margins, and you don’t need to worry about the troubles of dealing with logistics. But, that doesn’t always make it an easy win. Digital products are usually very competitive, and if you’re not leveraging off an existing community to sell to, then customer acquisition costs can be very high.
4. Project your earnings
How do you know when to actually go ahead and start a business? Well, when it can make money. There’s no point starting something when you can’t even generate enough to pay yourself a salary. In the early days, you might need to work with no pay, to get things up and running, but eventually, you want to be able to take out a salary from the business.
Based on the type of business you’re starting, there are many variations of modelling out your future earnings. But here’s an overview.
For sales projections, you need to find out the size of your Total Addressable Market (TAM). There are plenty of government surveys available to give you data, but simply looking at a market’s size, and saying 100% of it could be my future customers, can be a bit misleading.
Because let’s say you want to create a fitness product, let’s do yoga pants and sell them in Australia. Are you simply going to Google: Women That Exercise in Australia? Find that survey data, that shows a number like 1 million. You can’t really just take that number and say I can sell yoga pants to 1 million women and project your earnings like that.
A more accurate measure is to base your earnings off live customer demand, with data from Google search. Here’s my 3-step process:
Look at Search Volume
You can look at the volume of searches your product or service receives each month. A tool like Uber Suggest can give you those numbers.
Here, we can see the search volume is 12,100 a month.
Does that mean 12,100 will buy from you?
Does that mean 12,100 people will visit your site?
But just take a fraction of that, let’s say you use Google Ads to get your website to position 1, and can get roughly half of those visitors.
That’s around 6,000 visitors to your site each month.
Let’s take a low e-commerce conversion rate of 1%.
So you will make 60 sales a month.
Let’s say your yoga pants sell for $100, with a margin of 50%.
Your revenue from 60 sales a month = $6,000.
Your profit will be $3,000.
However, you needed to pay for those visitors. In Ubersuggest, they show you the Cost Per Click, the dollar amount you need to pay for each click.
In this case, it’s $1.39.
We estimated that you will get around 6,000 visitors to your site each month.
So your marketing costs will be 6,000 x $1.39 = $8340.
Yikes! Your marketing adspend is more than double your profit.
So how can you make this profitable?
Can you sell more than 1 yoga pant to a customer every sale? Can you upsell them to purchase a shirt or a sports bra?
We used a conversion rate of 1%. What happens if you build a nice looking site and optimise it well, giving you a 2% conversion rate?
Build this out on Excel and play with your numbers.
5. Market research
Market research is where you see who you’re up against in competition. Ideally, unless you have a lot of money to spend to get your business up and running, you want to start off in a low competitive field. Where you don’t have to spend too much to get your product or service in front of customers.
Here’s what to look at:
Google is one of the main customer acquisition channels you can use. There are two ways to get your product seen on Google search: Paid & Organic.
A simple way to check how competitive organic search is by using a free tool like Ahrefs, which can show you the Domain Ranking of your competitions. It is a ranking from 0 to 100, where brand-new websites start at 0, and the large websites of the world (Facebook & YouTube) are at 100. If your competitors that take up the first page position are at 60 or 70 already, that will give you an idea of how hard you have to work to compete.
This is where you pay Google Ads to be on top. Clicks can range from less than $1 to over $100 a click depending on the industry you’re in. If you’re picking a niche to start, then sure you have the funds to play.
Google search trends are a handy way to get an idea on what’s hot at the moment. You can see the search data of specific keywords, and if you’re lucky, you can catch a niche that’s on the rise and ride the wave, before others join.
Facebook Ads Library
Facebook Ads Library lets you spy on your competitors and see what ads they’re running on social media.
Simply type in your competitor’s Facebook page to see all their current ads.
6. Find your unique angle
Once you have a good idea of whom you’re up against, start planning out your angle to run your business. Plan out your USP and UVP.
This is an essential step to nail, because if you don’t determine your unique angles to take your business in, you may end up building a mirror of what’s already on the market, putting you at a significant disadvantage, as you fight an uphill battle to get traction.
Your unique angle is that shapes your marketing message, your sales pitch and even how you develop your service or products to your customers.
USP (Unique Selling Proposition)
This will form your sales pitch. Is your product cheaper than the rest? Better quality? Better designed?
UVP (Unique value proposition)
This is the unique value that your customers will get from using your product or service. Will they save more time? Will they save money? Will they look better after wearing your special set of yoga pants?
7. Build an MVP
Your MVP (minimum viable product) will help you test how the market reacts to your business. If you’re selling a service, then package up what you can offer and start outreaching to your customers to see if they’re interested. If you’re selling a product or service, this is whatever you can hack together to deliver your product.
If you’re starting an e-commerce business, then an e-commerce platform such as Shopify or WIX can get you up and running in no time.
If you’re building a SaaS tool, then give white label platforms a try before you spend months building a custom solution.
What happens if you’re not technically skilled enough o build the MVP? That’s alright, there are always plenty of resources out there to help you with the development. If you want overseas talent to help out, a platform such as OnlineJobs.ph can help connect you with relatively affordable designers or developers in the Philippines.
8. Register your business
This is when it gets real! Register your domain name. Register your business name to get started. Handy tip: Most businesses will pivot and adjust over time. Just because you’re selling yoga pants on day 1 doesn’t mean you will continue selling them after 6 months. Maybe you will find your customers like your sports bra range better, and you focus your business on that instead. Choose a somewhat generic business name, so you don’t have to change later down the track.
After you select a name and get a good domain name as well, consider making it official by registering an LLC. This will protect you in many ways and it also makes your business look more legitimate.
9. Get your marketing plan ready
In the final steps, have a marketing plan ready. Decide which channels you’re targeting and plan out what you need to get set up. Running Facebook ads? Do you have your ad creative ready? Running Google Ads? Do you have your landing page ready? Do you have the budget required to properly run a 2-week campaign?
I recommend breaking down marketing tasks based on week to week actionable tasks. From setting up all your social media accounts on day one to setting a goal of bringing onboard 5 influencers to talk about your product on launch.
Noting down all your marketing tasks (and actually doing them) is the only way you can execute your launch properly, as things can start getting hectic after day 1.
10. Execution is everything
Execution is everything. Stick to what you’ve planned out. But don’t be afraid to make adjustments. If one channel isn’t working out, then don’t be afraid to try another.
The same is true for your development. Don’t be afraid to update the product or service over time, the features you thought would be useful at the start may not be as well-received by your customers, and you will need to pivot if you want to stay in the game.
If you plan on reaching out to 20 customers a day, then stay focused and don’t drop off after one week, even when the results don’t come.
Keep in mind, businesses take time to build.
Most businesses that get started fall off the track within the first year and never turn into anything meaningful. Keep grinding at it, and one day, you will see the light at the end of the tunnel.