Guide On How To Turn Your Idea Into A Business

Have you ever had that eureka moment for a product or service and gave up because it takes too much time and hard work? Or you have a bright concept but don’t know where to start. Bringing your idea to life isn’t easy. You must be passionate, patient, and capable of executing.

The critical thing to get in motion is to go beyond the idea stage and create a lucrative business. To do so, you must follow some clear guidelines and have a long-term vision in mind. Below are the essential steps to help you transform your bright idea into a profitable business.

Steps To Start A Business From Scratch

When setting up a business, it’s of essence to remember that no perfect template exists. As a result, the order in which you can take the suggested steps below may differ. Often, you’ll have to abort plans and start over from another angle to get to the ultimate goal. Or it may make sense and prove more efficient to start at number three.

Whatever the order, you will need to address each step in your long journey as an entrepreneur. The sooner you act, the stronger your chances of becoming a successful businessperson.

Step 1: Choose An Idea For Your Business

Top-notch businesses solve a problem. They survive in the long run by decreasing pain and increasing pleasure. So, before you develop your idea, be clear about the barrier you’re overcoming, its reach, and prior attempts to face the same challenge.

Sharp observation will be your best ally when searching for unique ideas. The best approach is first to assess what you are good at and enjoy doing. It’s way safer to wander into familiar territory and use your existing strengths. For example, if you have a language degree, you can branch out into translation, teaching, or even writing.

Here are some helpful hints to keep in mind when selecting the nucleus of your company:

• Focus on what you’re passionate about in life. Be enthusiastic and choose ideas that enable you to act now. Then, you need to be proactive swiftly before your idea fizzles.
• Have specific business goals. For example, you have a particular product or service and want to reach a specific market.
• Watch out for the franchise market.
• Check if there are any windows of opportunity available, such as taking over a family business.

To ensure you remember any ingenious idea that ever came to you, keep a log of top ideas. Read business magazines and articles and get information on growth areas. For example, the rapidly changing IT sector, fueled by the explosion of digitalization, provides endless business opportunities.

Finally, while you might be sitting on a great invention, never make up your mind without a second or third opinion. It’s crucial to get feedback from close people and experts in the field to refine your idea.

Step 2: Do Market Research

With markets so vast and varied, customers today have a myriad of options for their money. So it’s your job to make them notice your product or service right away. Before anything, it must fulfill customers’ needs faster than the competition. Your target is to make things different but better than the rest.

Hence, your concept will never get off the ground if there’s no viable market for it. On top of that, you’ll probably find that your idea isn’t novel at all. Don’t abort your plans at this point because someone else has thought of a similar business. Don’t be intimidated by competition; their experience will teach you how to beat them.

Moreover, build a solid foundation for your business by exploring your target audience. Picture your ideal users to figure out where your idea fits into a sea of potential consumers. In most cases, you’ll come across different habits and needs facing the same problem. Figure out where your solution can fit into the lives of people and highlight that.

One of the most crucial mistakes startups make is not getting people to understand and want the product or service. If you fail to sell your concept to your audience, don’t blame the market. Instead, focus on getting them to want an improved alternative to what they already have. You might have a solution, but it needs to be before the eyes of the right people to get noticed.

Step 3: Create A Viable Business Plan

Ultimate success breaks down into several significant components. Hence, a solid business plan will put all the concepts running through your head in a single hard-copy document. This way, you can narrow down critical millstones for at least the first years. Plus, most investors and partners need to see a business plan to put trust in your vision.

The key segments of each project consist of:

• Executive summary
• Market analysis
• Product or service information
• Execution path
• Financial plan
• Company and team information

Once again, it’s a must to put creative thinking on paper. A robust business plan is your tool to sell your concept to shareholders, too. The product roadmap and chart must provide a straightforward but feasible way to bring each business phase to fruition.

If you can’t do every bit of the plan on your own, seek the help of an expert in the target market. You don’t want your roadmap to be ambiguous and contain insufficient information. Often, the absence of a strategic orientation is what most business plans lack.

You can’t do anything without a proper business plan. This document will establish whether you have a reliable idea, and every potential investor will ask for it.

Step 4: Location Or Online Based Business

Some companies can in no way operate virtually, such as towing services. Conversely, others can run their business at various sites. By offering multiple ways for people to buy products and services, these companies can meet the needs of a broader audience. For instance, many restaurants and supermarkets today operate both online and offline. Clothing shops often have brick-and-mortar locations and websites to attract customers who shop in person and online.

Brick And Mortar

Brick-and-mortar stores provide face-to-face customer service in a physical location. This way, you can benefit from creating personalized connections with buyers. The downside of this business type lies in the costs necessary to operate a physical site, such as rent and utilities. Examples of on-site businesses include hotels, spas, and childcare.

Business On The Go

Mobile companies offer products and services on the go. The benefit of flexible businesses is that they can operate from any location. Flexibility also leads to low overhead costs and convenient customer service. A possible disadvantage is limited offerings if the company is selling products. Examples of mobile businesses include housekeeping services, food and coffee trucks, and tour guides.

Online Business

Virtual enterprises operate on a remote basis and have no physical location. Employees work from different states or countries and complete all the work online. Companies in the cloud benefit from this business model by hiring top talent without the barrier of location. Plus, operating costs are lower and allow for higher profits in the case of home-based business ideas. A significant downside is the lack of personal connection and loyalty created by working face-to-face with customers. Examples of virtual businesses include web design, translation, and online education.

Step 5: Network With The Local Business Community

After choosing a location for your business, you need to find your place in the community. It’s also vital to know where to turn for resources when you need them. Consider the organizations below to branch out faster.

Chambers Of Commerce

The US Chamber of Commerce is not a government agency but a prominent business lobbying association. Such chambers exist in most local areas, and memberships cost about $100. Some of the perks include marketing and business tools, networking events, industry reports and statistics.

American Advertising Federation

AAF is a nonprofit membership organization that offers assistance to young entrepreneurs. Some of the benefits include workshops, continuous education, networking events, discounts and access to industry reports. There’s also a club for young advertising professionals.

Score

Score is another crucial resource for small businesses. This nonprofit has over 320 local units in every state and hosts events, conferences, workshops, and mentoring programs. Plus, their national website offers free or low-cost webinars and e-courses. Score’s business mentors are volunteer experts who provide invaluable, free advice to entrepreneurs.

Small Business Administration

SBA is a government organization that assists small businesses in the US. Help comes through free counseling, e-courses, small business loans, and open data. SBA also ensures access to guidance and mentoring in most regions of the country.

Small Business Development Center

SBDC partners with universities, private firms, and government agencies to provide free consulting and e-courses. Local centers organize networking events and low-cost workshops, and the national center hosts trade shows and annual conferences.

Step 6: Funding Your Business

Eager entrepreneurs don’t launch their businesses for the money only. Yet, money is essential to get the company up and running. The possible funding sources include self-funding, money from relatives and friends or loans. Depending on the needed amount, a more useful source can be venture capitalists and angel investors. These sponsors will back any promising idea for a portion of the profits and room for decision-making.

Whatever funding stream you aim for, remember that each one has inherent rewards and risks. The final decision will depend on the cash you need upfront and your future goals.

Starting A Business With No Money

Business starters without cash aside shouldn’t despair as there are several ways to access it. The obvious choice is to take a business loan. However, try to keep purchases on credit to a minimum to avoid getting into debt.

Second, consider crowdfunding platforms like Crowdfunder and Kickstarter. These platforms allow people to invest small amounts in a product they believe might work and get a reward. Plus, you may boost your clientele base and take pre-orders.

In addition, those who have no money to start should focus on a service-oriented business. Earning from a service people need is way easier since investment expenses are low. You can then multiply these funds and redirect them to a product-based company.

Experts suggest marketing your business for free. So, inform friends, relatives, business contacts and past colleagues about your startup. Use social media to promote your startup without spending money. Join LinkedIn, sign up for Twitter, and open a Facebook page to advertise yourself online.

Last, replace fixed costs with variables. In short, link your expenses with your sales. For example, hire staff by the day or meeting rooms by the hour. This way, you can control all costs and adjust them to meet the demands of your business.

Step 7: Selecting Your Business Entity Structure

Your company structure affects how much taxes you pay, your ability to earn, the paperwork you file, and your liability. Hence, before you register with the state, you must choose a business structure. Most companies will also need to obtain a tax ID number and possess the required licenses and permits.

While you may alter the business type in the future, there may be restrictions. At this point, consulting with business counselors and accountants can prove helpful. Compare the general traits of all business structures, but remember that ownership rules, liability, taxes, and filing requirements vary by state.

You will need to know all the pros, cons, expenses, and possible revenues to get a clear picture of whether your idea can be profitable. Keep an open mind and stay as realistic as possible when doing these essential calculations.

Sole proprietorship

A sole proprietorship grants complete control of your business and is the easiest to establish. This structure isn’t a separate business entity, but your business and personal assets and liabilities are the same. Meaning, you’ll be held liable for the debts and obligations of the business. Sole proprietorships are ideal for low-risk companies when you want to test the business idea before diving into more formal establishments.

Partnership

Partnerships refer to a structure when two or more people own a business together. Partnerships can be a good choice for companies with multiple owners and professional groups.

Limited Liability Company

An LLC is a mix of corporation and partnership business structures. Here, personal assets and savings accounts won’t be at risk if the company faces bankruptcy.

Profits and losses can reach your income without being subject to corporate taxes. However, LLC members are self-employed and must pay tax contributions towards Medicare and Social Security. LLCs are perfect for medium- or higher-risk businesses. Also, owners with significant personal assets or individuals who wish to pay a lower tax rate go for LLCs.

C Corp

C corps are legal entities separate from the owners that generate profit, pay taxes, and are legally liable. The owner’s assets have the most robust protection, but the cost is higher than other structures. Moreover, corporations require more extensive record-keeping, reporting, and operational processes. The upside of C corps is raising capital through a stock sale and is ideal for medium- or high-risk startups.

S Corp

S corporations get established to avoid the double taxation of regular C corps. Meaning, profits and some losses can get passed directly to owners’ income without being subject to corporate tax rates. Plus, when a shareholder leaves the company or sells shares, it can continue operating undisturbed.

B Corp

Benefit Corps are for-profit corporations with a different purpose and transparency from C corps but similar in tax. Shareholders that hold B companies are accountable to contribute to public benefit besides financial gain.

Close Corporation

Close corporations have a less traditional corporate structure and resemble smaller companies. Their shares are usually not subject to public trading. Plus, close corporations can get controlled by a small group of shareholders.

Nonprofit Corporation

Nonprofits do charity, education, scientific, religious, or literary work. Their work benefits the public, so nonprofits have tax-exempt status and don’t pay state or federal income taxes on the profit. Nonprofits also follow special rules about the profits they earn. For example, they can’t distribute profits to political campaigns or members.

Cooperative

Cooperatives are businesses owned by and operated to benefit those using their services. Generated profits and earnings get distributed among the members. Members can participate in the cooperative by purchasing shares, though their shares do not affect the weight of votes.

Step 8: Carefully Choose Your Brand Name, Logo, And Colors

Understanding the impact of names, logos, and colors on consumer behavior will help your brand succeed. Here are a few aspects you should be aware of when picking.

Brand Name

When choosing a brand name, brainstorm all ideas and jot them down. It’s best to go with a short phrase that is easy to remember and write. Your customers may find it challenging to locate your business online or in phone directories if the name is long and complicated.

The name you select should be memorable to make your business stand out. To this end, avoid puns that may be offensive or become annoying years from now. For example, if you want to inspire loyalty, choose a name that provokes a homey image.

Or, if you may want to inspire images of luxury or relaxation, choose an exotic name. The name should be apparent in most cases, so your potential customers won’t have to guess what you’re selling. Finally, do a trademark search to ensure the business name isn’t already in use.

Company Logo

When selecting a company logo, check the ones of your competitors to avoid similarities. Then, decide what image you want the logo to convey and imprint it in the minds of your customers.

Start by creating a few logos, or hire a logo designer to do so. This way, you can compare the options and choose the one that best represents your business goals. The logo should be compact enough to fit on business cards, letterhead, and websites.

Company Colors

As for brand colors, there’s a theory behind the whole thing. First, color can communicate a message of your brand’s promise to consumers. Second, it can convey emotions and mold consumer perceptions of your brand. Last, color can make your brand stand out or blend in depending on the business strategy and your customers’ wants and needs.

Think about your customers’ perception of color and match the colors used in your logo with the image you hope to portray. For example, if you plan to establish a company that caters to children, you should avoid dark, somber colors. Or, if you want to demonstrate sustainability and align with prestige and wealth, go with green.

Step 9: Create Your Social Media Presence And Website

Regardless of your company type, a solid online presence will boost your clientele pool and profits. Hence, it’s essential to have a website to complement your business. It’s up to you to decide whether it will serve as a marketplace, shop window or brand identity creator.

Second, dedicate some time to handling social media. Having the startup on all social media platforms makes it easier to interact with customers. Hence, open accounts on Instagram, Facebook, Twitter, and LinkedIn and update content and photos regularly.

As for domain names, these will cost you some money. Sometimes you can find domains for as little as $2.99 for the first year. If unavailable, you will need to spend more money to buy the name from the owner.

Finally, your marketing plan should strive to build your audience. You can’t open a website one day and expect the money to come pouring in. You need to develop an audience of prospective clients who need and value what you can provide. Though this may sound simple, getting consumers to buy from you might take months, if not years.

When your website and social media accounts are ready, post content to connect with your community. We recommend sticking with the 80/20 rule, with 80% of posts providing value to your followers, and only 20% are promotional. As a result, you can earn a decent passive income as time passes.

Naturally, the last step is to take the leap of faith and register your company. Even if you fail, you will have lots of experience for the next idea you’ll have!

Step 10: Officially Register Your Business With The Government

Your location and business structure will impact your startup entry. For small companies, registering includes listing your business name with state and local governments.

When you run a business as yourself using your legal name, you don’t need to register at all. Still, those who fail to file for registration might miss out on personal liability protection, legal and tax benefits.

Some companies can skip registering with the federal government but only file to get a federal tax ID. As for trademark protection or tax-exempt status, you must file with the federal government.

Register With State Agencies

If your startup is a corporation, LLC, partnership, or nonprofit, you’ll have to register with the state where you operate. Bear the following cases in mind:

• Your company is physically present in the state.
• A significant part of your revenue comes from the state.
• You hold in-person meetings with clients in the state.
• Your employees work in the state.

Sometimes you can register online, and other times you’ll have to file paper documents in person or through the mail. You will also need to file with the Secretary of State’s office, a Business Agency, or a Business Bureau.

You won’t spend more than $300 to register a company in most cases, but the cost will depend on your state and business structure. The documents you need to submit will also vary based on your location and organizational chart.

Register With Local Agencies

Companies usually don’t need to register with local governments. Yet, an LLC, corporation, partnership, or nonprofit might need to obtain some licenses and permits from the city. Local governments define registration, licensing, and permitting requirements, so visit their websites to learn what you need to do.

Helpful Tips To Remember During The Process

Having taken all the steps above will ensure your business has robust foundations. But before, always have these hacks in mind:

• Pursue what you enjoy doing. You can’t be successful and happy if you work for the money only. You need to be passionate about what you’re creating. Without that enthusiasm, it’s another mundane job you won’t want to continue.
• Consider how your concept will serve society. The world needs convenience, new solutions and relief from painful practices. Your brilliant idea can achieve great things for the community or even the nation.
• Keep an open mind. Seasoned business owners and competitors may criticize your idea or challenge it. Hence, focus on learning and trying new business strategies to stay true to your goals.
• Build strong relationships. Networking is a mighty tool to reach out to buyers. Social media groups and meetings make it easy to bond. Connect with other entrepreneurs to get an insight into how they are propelling their concept.
• Count on delayed gratification. Setting up a successful business will require sacrifice. You will work many hours with little return. Delaying your sleep, social life, and income is typical in the startup phase, but once the business takes off, you’ll reap your rewards.
• Growth comes in stages. As the business grows, you will get other ideas to expand your mind and the company. Scalable growth is essential to ensure your supply exceeds demand and your workforce does not outweigh your working capital. Check these business ideas for students in 2021.
• Don’t let challenges and fears hold you back. Often, you’ll face insurmountable barriers and failures. Don’t let fear overwhelm you. Look ahead with a plan and action backing your idea. Be optimistic and always ready for adjustments.

Bottom Line

If you have managed to breathe life into your business idea, it is your responsibility to keep it going. Follow our detailed advice and take one step at a time. Not anyone can set up a business, but if you come up with a unique idea, why not transform it into something spectacular?

What about your experience as an entrepreneur? Have you ever established a company that proved a huge success? We would love to hear the whole story behind the process. Share your thoughts in the comments below, and don’t forget to sign up for our newsletter.

FAQ

What are four common ways you can turn an idea into a business opportunity?

First, you must decide if you’re willing to follow your dreams. The next step is to research the market and your potential customers. Third, decide on a funding source, business structure, and location. Finally, advertise your products or services online and build a strong image behind your brand.

How do I turn my idea into reality?

Explore who will get affected by your concept. Don’t jump into promoting your idea without evaluating it and asking for validation. Take action only after you have studied your competitors, the clients, and your niche market. Have a long-term business strategy with tangible results in mind.

How can you turn your ideas into profit?

Ensure you thoroughly understand the problem you’re solving. It’s crucial to identify your market and craft a financial model. If you can’t do it alone, gather a team of mentors and supporters. Be specific about capital sources and business development stages. Last, build a proof of concept using feedback and testing.

Subscribe

business