Knowing how to start a business can be confusing. In fact, just this week I have been working with an entrepreneur from Bulgaria. Our work together has identified that there is virtually no one (never say 100% no one) doing exactly what his business model intends to do. There are some companies doing pieces of his business model who I consider indirect competitors. Which means that he will need to scale quickly in order to keep those competitors at bay.
After finishing our first project together, a feasibility study, he admitted to me that he wasn’t entirely sure what steps to do next. He had a few steps in mind but just wasn’t completely sure about the order he should follow.
This is a pretty common question that new entrepreneurs have. They just aren’t sure the steps to follow in starting a business. So, I thought I would lay out the process we follow here at SouthFound with our ideation-stage clients.
How to Start a Business — the SouthFound Steps to Start
Depending on the phase of growth your startup is at the order of steps may vary. Below is the order I recommend for new entrepreneurs with new business ideas.
- Complete the SouthFound Startup Business Model Planner — I have typically recommended that entrepreneurs first start with either a Business Model or Lean Model Canvas as their first step. However, when completing them in the past for my own startups or with clients I have always felt like they missed some key things to consider. So, I developed the SouthFound Startup Business Model Planner which is a precursor to the Business Model and Lean Model Canvas.
- Complete a Business Model or Lean Model Canvas — these documents are designed to help you succinctly think through all the key aspects of your business model by documenting your assumptions around marketing, customer segments, and more.
- Affirm or debunk your assumptions — now that you have documented the assumptions that you are making it is time to do some light research that will either affirm or debunk those assumptions. One place many entrepreneurs go wrong is that they don’t spend enough time in researching the market, their competitors, etc.
- Have a Feasibility Study done — in step #3 you perform some of your own research. If that went well and you are still wanting to proceed then I recommend having a third-party perform a full-blown feasibility study for you. The problem with relying on your own research is that bias tends to creep into your work. No matter how honest you try to be.
- Design/Develop an MVP (Minimum Viable Product) — if all goes well you will exit step #4 feeling more confident about the viability of your idea. From there it is time to start design your product or service. In some cases you might call that a prototype. Whether you are building the next greatest social media app, a new type of electric motor, or some other solution building an MVP allows you to put your solution out into the market and then, as any good product owner would tell you, begin getting customer feedback through the product feedback loop.
- Scale — once you have an MVP out in the marketplace it is time to scale. This step is part growth and part customer feedback so that you can make further enhancements to the product or service
- Raise funding — some business models don’t require outside capital. While others do. Keep in mind that if you plan to raise capital from investors you need to get prepared well in advance of when you could actually use the money.
In the queue
Next up I will be sharing with you four key steps to use in building your online brand.