Steps to Starting a Business: Going from Idea to Execution

Steps to Starting a Business: Going from Idea to Execution

Following through on a business idea can require business capital and counseling.

Some entrepreneurs never seem to run out of ideas for starting a business. But as many business owners know, coming up with the idea is usually the easy part. Seeing the business to fruition and profitability are the challenges.

Eighty percent of startup businesses survive the first year, according to the Small Business Administration, and about half of new businesses survive five years or more.1

“Small businesses struggle, and there is a lot of turnover,” says Michelle McCullough, a nationally known speaker, strategist, and business consultant who founded her first business at 19. “But serial entrepreneurs try again and again.” If you have an idea for a business, here’s how you can help increase your potential for success.

Create a Business Plan

McCullough recommends a plan of action for any idea you pursue. Research the idea and write a business plan. “By writing a business plan, one of the things you’re looking for is viability. A lot of people don’t want to write a plan, but I call it a four-letter word for success,” she says.

McCullough shares the story of a woman who had a side job making hair bows and selling them to boutiques. She wanted to earn $5,000 a month. After careful research she realized she would have to make 10,000 bows a month — an unwieldy number — to achieve her goal.

“People get excited about the idea, and they forget to research the feasibility. That can make all the difference in the world,” McCullough says.

Next, consult with professionals, such as a business leader you admire or a small business consultant, who can evaluate your plan and offer feedback. Look for someone who provides insight and constructive feedback.

“We do a lot of work with women entrepreneurs, and one experience I love is that women want to share advice and they want to help when asked,” she says. “They have some of the greatest connections and are quite resourceful.”

Search for Potential Partners

“Part of being business savvy means knowing you may need help with accounting, business strategy, and operations,” McCullough says. But it can be difficult to understand the difference between who people say they are and who they really are in business situations.

One strategy that has worked for McCullough is bringing on individuals for specific projects on a trial basis. Once the project is complete, you can evaluate whether that person is someone you can work with long term.

“There were times when I’ve done this, and I thanked the individuals, paid them, and wished them well. There were no strings attached, and no bait and switch,” says McCullough, a former corporate sales trainer. “It is good to have that option.”

Determine Business Financing Options

Finally, financing the business is critical. One way is to self-fund from your savings or with the help of family members and friends.

“I’ve funded all of my ventures this way. While it has some disadvantages, I own my own companies and wasn't beholden to monthly loan payments,” says McCullough, who currently operates three companies.

Taking on a business loan from a financial institution is an alternative for owners who want some initial cash and will pay it back with interest. This option can be good for those who meet credit criteria and have assets that can be used for collateral.

A third way to fund a business is through private equity where investors offer capital in exchange for a percentage of the company. There are firms whose primary job is to review business plans and match investors with startups.

Of course, seven out of 10 businesses don’t succeed after three years2, and if you end up being one of them, you can take what you’ve learned and apply it to your next venture.

“I often say I wish I would have failed faster because every time I failed I learned so many things along the way,” McCullough says.

Calculate how much it costs to start a business.

1. U.S. Small Business Administration, Frequently Asked Questions, 2016
2. Bureau of Labor Statistics, Entrepreneurship and the U.S. Economy, 2015

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