steps to starting a new business

Starting a business can be a thrilling and rewarding experience, but it can also be challenging and overwhelming. It requires careful planning, a solid strategy, and a passionate team to turn your ideas into reality. Whether you're starting a small or large business, the basic steps involved in starting a business are the same. we will explore those steps and provide you with tips on how to turn your dream into a successful business venture. From creating a business plan to choosing a team, we'll guide you through the process of starting a business. 

Research

As a startup, you need to figure out who is going to buy your goods and services (customers/clients.  By understanding your customers, you can build better products and services, and you can learn how people make purchase decisions.

Who are the people who are already selling the same or similar products and services (competitors)? By understanding your competitors, you can copy what they do well, and you can work out what you can do better.

There are a few proven market research methods to try:

•  Search the internet: Search for public studies into your customer group. And follow what those people say on social media and community groups.
• Have conversations with people: Ask open-ended questions regarding what problems they have, and what products and services they think they need to solve those problems. Ask them who their current service providers are, then let them do the talking. Listen and take notes.
• Host workshops or focus groups: Ask questions to a whole group of customers at once. You’ll get deeper answers because people will spark off each other.
• Run surveys: Ask tons of people the exact same questions to generate really solid ideas and valuable information. You can use Facebook, Twitter and other social media platforms
• Get feedback: If you have already started selling products and services on an informal basis, get feedback from your customers about your products and what you can do better. Additionally, ask your customers who else they buy the exact same or similar products.
• Introspect:  Measure your strengths and weaknesses against your competitors and figure out where you can give them a run for their money. 

You don’t need a big budget to go do some market research. Asking a few key questions of a few target customers and doing some competitor analysis can give you the required intelligence to build a winning business. 

The Business Plan

Writing a business plan will help bed down your idea and give you a roadmap for executing it. The business plan does not have to complicated document. Keep it simple and to the point. Writing it down is an important step as it will be a reference point you can return to often. You will especially need a written business plan if you require funding from another party or lender. 

A business plan describes your product or service, identifies who the customer is, explains why they need your product or service, and shows how you’ll make money from that opportunity. 

The business plan will also include a summary of the budget of your business. A budget predicts how much money will come and go from your business over a period of time. Budgeting and forecasting help you to see if they can afford to start a business and whether the business will repay you for all their hard work with a return on your effort and the risks you have taken. 

The most important thing is that the business plan must not be a stumbling block to you starting your business. The business plan does not need to be written in full before you launch the business. You can write the business plan as you go along. But at the least, have at least a one-page document that describes the problem you are trying to solve, your product or service that solves that problem, your customers, competitors, and a summary of your budget. 

Register the business

The business structure you will uses can affect how you are protected from a legal standpoint, how much tax you have to pay, and how you are generally treated by the law.  The main types of business structures around the world are sole trader, partnership, and company, each with its own implications. 

Our advice is that the best structure that provides the best protection in terms of limitations of liabilities, the lowest effective tax rate, and gives your business a professional image which is important in today's world. A company is legally separate from its owner (or owners), which means you are less exposed to legal or financial issues. A company can be owned by one person or many. Furthermore, you can also sell shares in your company in order to raise capital. 

The main disadvantage of being a sole trader or forming a partnership is that the business does not have a special legal status, which means the owner(s) is personally responsible for what the business does.  If the business gets into debt or legal trouble, so does the owner. Furthermore, in a partnership, one partner could also get into difficulty if one of the other partners does something wrong. 

Once you've chosen your business structure, you need to register your business with the Companies and Intellectual Property Commission (CIPC) (We provide a step-by-step guide on how to register your company on Bizportal). This includes obtaining any business licenses required for the industry in which you operate, and getting any necessary permits and certifications. Failure to properly register your business can result in legal problems and fines. 

The nice thing about registering with CIPC is that your business will automatically be registered with SARS when registering a company. But if you don’t register your business with CIPC, it is very important that you register with SARS. It is best to speak to a tax practitioner who can guide you through the correct steps. Make sure that your tax affairs re in order. You do not want all your hard work of building up your company to be destroyed as a result of not complying with the taxman.

Shareholders Agreement

Are you setting up a company with more than 1 shareholders? Then you need a shareholders agreement.

A shareholders’ agreement is a private written agreement between all of the company’s shareholders helping to define their roles and how they will reach certain decisions. 

Without a shareholders’ agreement, in the event of a dispute or a breakdown in trust between the shareholders, there will be no agreement in place on how to resolve the dispute or agree a way to terminate the relationship of the shareholders. No matter how good your relationship is with your business partners at the commencement of your company, you cannot guarantee the future.  Consult a legal advisor for this purpose if you need assistance in drafting the document.

Opening Up a Business Bank Account

It is crucial when starting up a new business to open a separate business account. Try not use your personal bank account for business transactions. In this way, it is easier to keep track of what your company has spent and earned. If you do not do this, it will be extremely challenging to track which transactions were for personal use and which were incurred by your company.

Additionally, when you come to file a tax return, it’s going to be difficult to claim tax deductions without having proof of business transactions. If you need to add personal funds to your business then regard it as a short-term loan that will need to be repaid to you.

Get Business Insurance (Optional)

If your business has a sizeable asset base, strongly consider getting business insurance.  

This can often get overlooked by first time business owners, but protecting yourself with business insurance can be very important. Look into getting insurance that covers basic things such as natural disasters, theft and fire. Also, make sure that the policy includes legal liability.

Business insurance helps protect you in case someone sues you or your business. Take a look into some policies that also cover both product liability and public liability as this can protect you even more.

Obtain Funding 

Depending on the type of business you are starting up, starting a business can require some form of funding upfront. You need to secure funding to cover startup costs, including inventory, equipment, marketing, and payroll. There are several options for funding, including your own personal savings, borrowings from family, friends, and fools (so-called "Triple Fs"), loans from funding institutions, grants from the government other NGOs, and equity investors. Make sure you have a solid business plan and projections to attract investors and lenders. 

Launch Your Business

Now that you have all the essential steps and tips on how to start a business, it's time to take action and turn your dreams into reality. Don't let fear hold you back or doubt cloud your vision. Believe in yourself, your team, and your business idea. Take that leap of faith, and launch your business with confidence and passion. Remember, success comes to those who take action and never give up on their dreams. So, what are you waiting for? It's time to launch your business and start building the life you've always wanted. 

Now, go out there and WIN!!