How to Start a Business for Beginners: A Complete Guide to Building a Successful & Profitable Business

How to Start a Business for Beginners: A Complete Guide to Building a Successful & Profitable Business

Richard Foreman

PUBLISHED BY:

Richard Foreman

Copyright © 2017

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All rights reserved.

No part of this publication may be copied, reproduced in any format, by any means, electronic or otherwise, without prior consent from the copyright owner and publisher of this book.

Disclaimer

The information contained in this ebook is for general information purposes only. The information is provided by the authors and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the ebook or the information, products, services, or related graphics contained in the ebook for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

Table of Contents

Introduction

Chapter 1: Do You Have What It Takes To Be An Entrepreneur?

Characteristics And Skills Of A Successful Entrepreneur

Mantra—The Simple Statement of What Your Business Will Actually Do

Chapter 2: Creating The Business Plan

Executive Summary

The 6 Critical Sections of an Executive Summary

Chapter 3: Choosing The Business Structure

Sole Proprietorship

Limited Liability

Cooperative

Corporation

Partnership

S Corporation

Chapter 4: Registering A Business

Chapter 5: Obtaining Business Permits And Licenses

Chapter 6: Learning About Business Laws And Regulations

CASH IS KING- MANAGING YOUR CASH FLOW

Define Your Supply Chain

Negotiating Vendor Agreements

Selecting Your Key Vendors

Chapter 7: Financing The Business

Understanding Financial Statements

Types Of Business Financing

Providing Proof About Ability To Repay A Loan

Chapter 8: Paying Taxes For The Business

Chapter 9: Choosing Equipment And Location

How To Choose An Equipment

How To Choose A Business Location

Leasing An Office Space

Chapter 10: Hiring And Retaining Employees

Hiring Employees

Outsourcing

Contract Workers

The Difference Between An Employee And An Independent Contractor

Processing Payroll and Determining Payroll Taxes

Chapter 11

Some Business Ideas To Start With

Conclusion

Introduction

A lot of people are afraid of failure. Although they know that they can gain financial independence from starting and growing a business, they don’t want to try because they know some people who failed in their businesses. They fear that their fate will also happen to them. What they don’t realize is that each person is unique. The experience of others may not necessarily be his experience also. His success may not be the success of others.

Those individuals who succeed in their business have also experienced failures in their quest for business success but they don’t let their past failures rule them. They try again and again. Life is a learning process. For each failure, people learn. Furthermore, people learn from reading also. Thus, this book was written to serve the needs of budding entrepreneurs who want to become successful businessmen but don’t know how to start. All chapters of this book are easy to read and understand. Business concepts are cited in a clear and concise manner. Ultimately, the aim of this book is to encourage every reader to be an entrepreneur, start a business and succeed.

Chapter 1: Do You Have What It Takes To Be An Entrepreneur? 

A person who wants to start his own business thinks that it is both rewarding and exciting. He can earn from the thing that he enjoys doing. He makes his own schedule. He is his own boss. However, to be successful in business will require him to work hard, be creative, and plan.

Characteristics And Skills Of A Successful Entrepreneur

A successful entrepreneur must possess the necessary skills and characteristics. He must be ready to take risks. Although being his own boss may be exciting, it also means that he has to make difficult decisions. Owning a business doesn’t guarantee that he can make his dreams happen. If he understands uncertainty and is willing to take calculated risks, he can be an entrepreneur. A budding entrepreneur must be prepared to make many decisions independently. He mustn’t be afraid to be rejected. He can also trust his instincts.

A business owner is very persuasive. He can convince partners, potential creditors, employees, and customers with his ideas. He is a person who enjoys speaking with different types of people. He engages other individuals easily. His arguments are grounded in facts. He is also somebody who knows how to negotiate. A small business owner must have good negotiating skills because he needs to close a deal every time. He has to ensure that his business runs smoothly and that he saves money. An entrepreneur is also someone who is creative with his ideas. He has to find ways to solve problems of an ordinary citizen. He must be able to think creatively in order to see new opportunities. Before starting a business, a person must ensure that he has a strong support system. He needs to make important decisions so he needs a support network to help him. He can find a business mentor who can offer guidance and advice.

Know The Market

For the business to be successful, the entrepreneur must know the industry his business is in, his competitors, and his customers. It is necessary to conduct market research in order to understand the products and services which are currently in demand so that he can plan how he can compete in his chosen market. Market research reduces business risks, determines opportunities, and identifies possible and present problems affecting the industry.

The entrepreneur must know how to conduct market research properly. The first thing he must do is to know which government offices offer industry and market data. These government agencies can provide official information and data with regards to the current conditions of the economy, industries, and businesses. The entrepreneur can use these records in his market research. He can also source his information from academic institutions, business magazines, trade groups, and other organizations which gather and analyze data about businesses. The internet can also offer a wealth of information. Lastly, he needs to understand the international trade scene. Because of globalization, the entrepreneur must know international factors which can affect his business. Furthermore, he needs to know possible international markets for his business.

Testing Your Assumptions 

Every business idea is based on a set of assumptions. A business assumption is something that you think is true about your business based upon your experiences thus far, but something for which you do not have solid proof as to it's validity. A business assumption can involve any part of your business plan, from market conditions, to internal expectations, to anticipated resources.

Do as much research as you can to eliminate assumptions and make them known variables. After eliminating as many assumptions as possible, you will still find that some assumptions persist. There is simply no way to define all the variables in your new business until you actually begin doing business. 

Keep in mind that assumptions are somewhat dynamic, and they generally evolve and change as you gather more information and as you continue through the startup process. Do not be alarmed if some of your primary assumptions change. Changes to your assumptions can be a good thing because those changes demonstrate that you are observing and listening to the data and feedback from your initial customers. 

Be bold in your initial assumptions and listen to your gut, but also pay careful attention to the evidence and data you will see as you progress. Most importantly, don’t be afraid to adjust your assumptions when you need to. 

Take a few minutes now to list each of your critical assumptions. 

Based on what you know so far, list what you consider to be your top five assumptions:

1. __________________________________________________________________________

2. __________________________________________________________________________

3. __________________________________________________________________________

4. __________________________________________________________________________

5. __________________________________________________________________________

[Examples of business assumptions: We can gain 5% market share. Our target market will recognize our solution once they see it. We can outperform a competitor in some way or in some niche. Our revenues will grow at a certain rate. We can achieve our per unit profit projections.  Aspiring entrepreneurs are interested in step by step business start up guides.]

Common Excuses 

Every worthwhile endeavor in life has barriers and obstacles that must be overcome. Think of barriers like an entrance fee or a tax that must be paid in order to participate. The following sections illustrate some of the common barriers people just like you experience and overcome as they launch their business. We will discuss the solutions to these obstacles later in this guidebook. 

Launching a New Business is Too Difficult 

If it were easy, everyone would be doing it. Launching and operating a business is challenging, and yet, when done correctly, it is amazing and fulfilling work. If you are the type of person who thrives on excellence, meaningful work, getting things accomplished, serving customers, and helping those you work with, then business ownership is probably for you. Business ownership is not for those looking for the smooth and easy path. Entrepreneurship is all about recognizing and overcoming problems, and then creating solutions to those problems by using your native genius and the unique set of skills and experiences you already possess.

Though starting a business is a challenge, there is guidance and resources available that will simplify those challenges and make the process of starting a business more rewarding. 

I Need Funding for My Business 

How much money will it take to launch your business? For many, they envision entering the marketplace in a big way, with everything polished and perfected the way a fortune 500 company might launch a new product or service. Who wouldn’t want to launch a new company like Bill Gates or Mark Zuckerberg could, with tons of resources at their disposal? In reality, however, when you launch with fewer resources, you become more deliberate and focused on using those resources most effectively. You become more focused on outcomes, making sure your assumptions are correct, and quickly making adjustments when they are not. Starting small allows you closer contact with your customers so you can better satisfy their needs. The bottom line is, you need a lot less money than you think to launch a successful new business. If you spend less in the beginning to create your initial products and services and require that those products and services begin to create a revenue flow to keep your business afloat, you will be forced to better understand the desires and frustrations of your customer in order to sell to them successfully. This creates a stronger platform from which to grow. 

Most importantly, it is significantly better to launch now, as a smaller, leaner company, than to wait until you have assembled a war chest. Time is every business's most valuable resource. Don’t waste your time waiting for better circumstances or more funding. It is important to get launched as soon as you possibly can. 

What if My Business Fails? 

There are varying levels of uncertainty in everything we do, even in your current or previous career. In fact, many would argue that there is actually more uncertainty in having a traditional job. A boss from hell, a downturn in the economy, outsourcing to other countries, technology advances, and even a change in government policy can all lead to layoffs and even the loss of positions that most would otherwise consider very stable or low-risk. 

One noteworthy benefit of owning your own company is that you get to make decisions that are in the best of interest of your employees, your customers, your business partners, and yourself. If a layoff is required, the last people who will lose their jobs are the owners. That’s right, you! It is better to be in control and be the master of your own destiny than to be at the mercy of someone else’s business decisions. It’s better to be in a position to act rather than be acted upon.

There is risk in starting your own business, but have you considered if that risk is any greater than the risk you take by working for someone else? As a business owner you can mitigate risks through your decisions, preparation, course adjustments, and through building a strong team that can find a way to succeed in face of any challenge. 

A Perfect Product is Too Difficult and Costly to Develop 

You don’t need a perfect product to launch, just a product that does what you claim it will do. While developing a product or service is important, there is a balance between developing too much and never making it to market versus not developing enough and having your product or service fall flat. To reach that perfect balance, the product should be able to solve the problem the customer is facing a vast majority of the time with few instances of failure or disappointment. Notice we didn’t say no incidences of failure or disappointment. If your product or service can accomplish those types of results, then you are ready to launch even if there is still some tweaking that could be done to make the product better. 

Think about any major company or brand of product. One year they release a product that does something wonderful. The next year they release that same product but with a few new improvements. The next year, the product may be re-released with changes in the scope of what it can do. A company that employs this type of product development strategy is following the minimal viable product model, a concept popularized by Eric Ries. The basic concept is to develop a product that delivers the results it promises and nothing more, then get that product out in the marketplace, then improve the product based upon the feedback you receive from the market. As a result, you spend less time and money developing the product or service before it’s first release, and you are more quickly able to determine how well that product or service will perform in the market. 

How do you know if you have a minimally viable product or service? The first step is to build a prototype. A prototype is a preliminary model of your product or service that can be tested. If the prototype is able to produce the intended outcomes, then the prototype can be copied. If the prototype fails to produce the intended