Starting a business from the ground requires a lot of work and dedication. Be it meeting the legal requirements, having the proper documentation and strategies. All these can be overwhelming, but you can get started with the right attitude and discipline. Yet, it will take time, effort, and a few setbacks here and there for you to break even.
This article will take you through how to start a business in 2022 with a step-by-step guide.
How to start a business
If you are going to start a business, kick out your fear and what-ifs. Put your foot on the ground, and let get started. You’ll need to prepare a business plan, decide, and do market research. At some point, you’ll read books and enroll in courses to learn more about your industry.
We prepared this guide to help you set your foot in the entrepreneurship world. These steps will help you organize your thoughts and figure out how to begin. They will also answer most of your questions before launching your fantastic business. So let’s dive in and find out.
- Ask yourself if you are ready
Before diving in, it is best to understand why you want the business. Are you chasing financial freedom or flexibility? What skills do you have? Do you have knowledge of various industries? Is the business a full-time or part-time venture? How much money are you willing to risk?
Answering these questions helps you narrow down your focus and check if you are ready. This step is not supposed to scare you. Instead, it is here to get you thinking and planning.
- Determine what type of business you want to start
The next step is finding and developing your business ideas. As an entrepreneur, you already know what type of business you’d like to start. If not, it is time to start brainstorming. Think of things you are passionate about. Are they clothes, traveling, food, education, or healthcare? What hobby can you quickly turn into a business?
Suppose you can’t come up with a solid idea check entrepreneur to explore different ideas. After getting an idea, it is good to confirm if there is a need. You also need to check whether the idea is sustainable or not.
- Do market research
This brings us to our third step, doing market research. Here you evaluate your market idea. Find out who your potential buyers will be. This step helps you address your business opportunity, value, market size, and competition. Here are tricks to conduct your market research.
- Perform general Google searches. Find out if people are looking for your product or service.
- Join social media platforms and groups in your industry. Look out for people’s pain points and problems.
- Speak to local people. Find out if they require services or products you’ll be providing.
- Speak with people already working in your industry. You aim to find gaps in services or products they’re offering to customers.
- Read books by people in your industry. You aim to build knowledge in this particular niche.
- Join two or three courses in your industry if you can.
Understand your target audience
At this point, you have a glimpse of problems you want to solve. Now you need to understand your target audience. And to do this, be part of your target audience. Understand their problems. Second, and your product or service is going to help. Then conduct a market analysis. This guide will further help you to determine your target audience;
- Check the market size. Are there people already paying for the product or service you’ll be offering.
- Customer acquisition. How difficult is it for you to keep and get new customers?
- Market availability. Are people urgently looking for the product or service you’ll be offering?
- Breaking into the market. How long will it take to break into the market?
- Business relevancy. How long will the business remain relevant?
- Upfront. How much upfront will you need before starting the business?
Research your competition
At this point, you fully understand your target audience. But to start your business on the right track, you need to research your competition. Follow these simple steps;
- Check whether your competitors meet customers’ needs.
- Look for those needs your competitors don’t meet and capitalize on them.
- Learn how your competitors attract attention. Do they run ads, promotions or do they have websites.
- Find out how they make their customers happy.
If you figure out what is missing before you even get started, chances are your business will succeed.
Validate your idea
Lastly, you need to test your idea, product, or service. Here, you need to speak with your potential customer. Let them know you intend to launch a product or service that will help them. If possible, select a few potential buyers and give them free products or services. Then let them review the products or services. Use these reviews to improve your product or services. Again you don’t need to do all this process in person. You can
- run ads
- send out surveys
- run a question and answer session on social media
- sell pre-orders
- join forums and social media, groups
Market research is the most crucial step because it is the mainstream of your business. So you’ll spend most of your time on this to get everything right. If you don’t do it right, chances are your business will fail.
- Consider your finances
Before starting a business, determine how you will cover the costs. Are you going to take loans? Are you planning to fund it as a startup? Are you planning to quit your job to focus on business? Do you have enough money to support your business until you make the first profit? If not, you can fund your business through:
- Crowdfunding. It involves raising small amounts of money by many people to start a new business or project. You can launch crowdfunding campaigns on platforms such as M-changa and Pesa Pesa for your business.
- Business loans. You can take a commercial loan through a bank if you’re starting. If you are not eligible for bank loans, you can apply for small loans through SACCOS.
- Business grants. It is money awarded to businesses in need. Unlike loans, you don’t need to pay back the grant because you’re not borrowing the money. The only disadvantage is that grants are very competitive. So it would help if you are looking for those specific to your business.
- Investors. Another option is looking for investors. Investors can provide millions of dollars to fund your business. But keep in mind these investors have a say in your business.
- Create a business plan
A business plan is necessary, especially if you’re planning outside finance. Even so, you still need a business plan even if you’re going to finance the business yourself. A good business plan helps you strategize your business. For instance, you’ll know the amount of money you need to start. How long it will take you to make your first profit. What you need to do and where your business is heading. You can also use your business plan to pitch banks and potential investors. A good business plan should be SMART (Specific, Measurable, Achievable, Realistic, and Timely). Ensure to include the following in your business plan;
- problem your business solve
- a list of your target audience
- SWOT analysis(Strength, Weakness, Opportunities, and Threat to your business)
- marketing plan
- financial projections for each quarter.
If you wish to create a formal business plan, follow these steps.
- Determine your business legal structure
Before registering your business, decide what kind of entity it is. The type of business structure you’ll choose affects your taxes and personal liability. Here are the primary business entities in Kenya.
- Sole proprietorship. You own the business by yourself. And you’re responsible for taxes, debts, and legal obligations.
- Partnership. It means two or more people own the business, and they are liable to its legal obligations.
- Corporation. This legal structure makes a business a separate entity from its owners. So the corporation assumes all the legal obligations and liabilities. It is handles taxes, contracts among others.
- Limited liability Company. This legal structure is most common among small businesses. The firm has legal protections here, but the partnership enjoys the tax benefits.
So it is up to you to decide on the type of entity you want. But be sure to check your current needs and future business goals. It would be best to learn about the pros and cons of these legal structures before settling for one. If you are struggling with all these, reach out to your legal or tax advisor.
- Make your business legal
You have done all the required work. It is time to make your business legal. You need to get a variety of business licenses from the county and national government. There are different documents you must prepare before registering, and they include;
- Registering your company with KRA or Citizen. Your attorney can help you through the name search, reservation, and registration. After registration, you’ll get a certificate of incorporation in 2 weeks. Also, ensure to register with KRA to ensure you’re tax compliant. Your tax consultant will help you understand KRA requirements and the taxes involved.
- Getting a business permit or license. You also need to get authorization from your city council. The cost of a permit will depend on the nature and size of your business. If you’re planning to open a physical location, you’ll need a license too.
- Getting a fire safety certificate. Before starting, you’ll need a fire safety certificate. It is also essential for your business to have fire equipment that meets appropriate fire safety standards.
- Prepare for growth
At this point, you can launch your business and start selling your products or services. But prepare for setbacks along the way. Whether it is your first or tenth business, chances are you’ll make mistakes. But the faster you’ll learn from these mistakes, the better decisions you’ll make. So don’t get demoralized and unmotivated.
You also need to understand that it will take time to make your first profit. You need to stay consistent and grow your business steadily. The truth is, it is going to take time and effort, but eventually, your effort will pay off. Here are tricks to growing your business fast.
- Collaborate with other established brands in your industry. You exchange your product or services for free by reaching out to companies. In return, they help you advertise it to their customers.
- Partner up with charity organizations to help you get your brand out there.
- Advertise your business with influencers in your industry through social media platforms.
While these tips will help launch your business and get you set to grow, there’s never a perfect plan. You can test many strategies through trial and error until you find out what works for you. You need to prepare thoroughly and ensure you can handle anything thrown at you. Besides, to run a successful business, you need to adapt to changing situations.
