Got an awesome business idea but don’t know how to start a business from scratch? Make your concept a reality. Read on to learn more.
FUN FACT: Did you know that over 61% of Americans have had some sort of a business idea, but over 91% of them have never followed through with it?
When asked what’s holding them back, the answer is simple – they just didn’t know where and how to start a business from scratch!
So if you’re looking to get started on a business idea…but don’t know exactly how… then stick around. In this post, I’m going to cover how to start a business from scratch in 2022. From settling on an idea to making your first sale, this guide will help you every step of the way.
Let’s dive right in.
Building a business is like building a house.
In many ways, building a business is like building a house. First, you need to have an idea. Then, you need to transform it into a plan that you can execute, and finally build out the structure of the house itself.
When building, you need to start working on the right elements first, or risk having to tear down the whole thing later.
To avoid this situation, you need to be smart about which parts of your business to focus on. That’s why you need to build your business on a solid foundation first.
Step 1: Building your foundation.
The foundation is essential in the process because it sets the stage for everything else you’re building. In other words, it should be strong enough to support the rest of your structure. It needs to be solid, stable, and sturdy.
Without it, your house (or business) will not last for long.
Before we jump into the nitty-gritty details of starting a business, let’s try to understand which elements make up a good foundation.
1. Mindset and Habits
Your mindset and habits are two of the most critical aspects of your life. They determine how you think, act, and behave. And when it comes to starting a business, they’ll determine whether you succeed or fail.
Here’s the truth: business ventures without the foundation of an entrepreneurial mindset are doomed to fail. I know it sounds harsh, but it’s true.
Think about all the successful entrepreneurs you know and identify their common traits. I’m sure you’ll notice that they all share certain characteristics.
Successful entrepreneurs are willing to put in the hard work to achieve even more. They’re disciplined, focused, persistent, goal-oriented, and determined. Most importantly, they are, in essence, professional failures.
They failed so many times up until the point they reached success. Regardless, they maintained that level of discipline and focus by continuing to grow and learn from their mistakes.
Mindset is such a crucial part of building a business that the number one reason why the 91% couldn’t act on their business ideas was because of the fear of failure.
If you want to become one of those successful people, you must adopt an entrepreneurial mindset and habits. You must understand that habits and continued actions — no matter how small they may be — will help set a solid foundation for your business.
Curious if you have a natural entrepreneurial mindset? Click here and take my free quiz to find out.
Once you’ve built your mindset and habits, you need to decide on your monetization strategy. This means determining how you intend to generate revenue from your product/service.
In other words, you need to figure out how you’re going to turn your idea into a marketable and profitable service. But first, you need to know exactly what you’ll be offering to others. You have to be clear on what that is. Because the truth is, if you’re solving a problem that no one is paying money for, then that same idea might not be worth pursuing at all.
So having clarity on the following are essential:
1) What you’re offering,
2) Who out there wants to buy it,
3) Who needs the problem solved, and
4) Why you’re in business in the first place.
3. Market research
Now that you’ve figured out what you’re selling and who you’re selling it to, you can now go to the next step. That is, validating your idea by researching the market.
This is a super important step, yet so many entrepreneurs skip right over it. The reason? It’s a lot of work, but I can assure you that it’s well worth the effort.
You need to do thorough market research to ensure that your service is something people want to spend money on. There are several different types of market research, but the easiest ones will help you answer the following questions:
- Are there other businesses offering the same services as you?
- How much are they charging for those services?
- Who are buying from them?
So market research is key to ensuring that your product or service will sell.
Step 2: Building your building.
Now that the foundation is set, the next thing you need to do is to build your structure.
To do that, you need to establish the pillars that will hold your business together. When it comes to building a business, we need to focus on four pillars, and these are:
1. Your offers
At this point, you need to start establishing what your offer is going to be based on the results you gathered prior to taking this step. By now, you should also have a clear understanding of the following questions:
- What problem can your business solve?
- What solution are you offering to the market to solve that specific problem?
- How much will you be charging for your services?
- How are you going to package and deliver your services?
Clarify your offers to ensure you can earn revenue from the value that you’re offering to your clients.
2. Your operating systems
It’s easy to get sidetracked when you’re running a business. After all, there are so many things to do and so many hats to wear!
But one of the things that will keep you sane is to build a solid operating system. This means that you need to lay down the rules of engagement before you even think about starting anything, like jumping right into marketing or lead gen. Though, there’s nothing entirely wrong with starting with marketing or lead gen right away.
If you don’t have any rules of engagement, chances are that you won’t last very long. You need to create a structure that allows you to operate efficiently and effectively.
Your operating system is the blueprint for your business. The basis of it all comes from the foundation you established early in the process. In short, your business’s operating system, including the rules of engagement, outlines everything you need to do every day from managing conversations with potential customers to processing and tracking payments. Doing so will help you get the essentials covered without getting distracted by other stuff.
Now that you’ve successfully built the foundation and its first two pillars, it’s high time to let people know about your business!
And this is where your marketing plan comes in.
Think of marketing as a way to communicate with your audience. It could include everything from advertising to social media posts. The goal of marketing is to increase awareness of your brand and generate leads.
To achieve this, you need to go out there and spread the word – be it online or offline.
Once you’ve got leads coming in, it’s time to convert them into paying clients.
This step is crucial because you won’t be making any money if you fail to convert leads into paying clients.
So, this is the perfect time to double down on both marketing and lead generation to ensure that you’re generating enough sales to make your business sustainable and scalable. The key factor here is for you to effectively convert those leads you’re generating into revenue by having effective sales conversations.
Other sequential steps you need to take.
Of course, your house won’t be complete with just the foundation and its pillars. You need to add some walls and a few other elements to build your structure higher.
But before you can do that, you need to make sure that your structure – aka your business – can stand the test of time and won’t topple over once you’ve added a few more floors.
After all, you can’t build a skyscraper with weak structural components (i.e., foundation and pillars), can you?
So, before you can start scaling your business, you need to validate it even further to ensure that everything is strong enough to withstand the weight of growth. The goal of validation is to validate your concept and everything you’ve built.
Now, validation could come in a variety of forms. But when you’ve just started – and don’t even technically have a business yet – landing your first paid client in my opinion is the best way to validate it.
From there, you need to prove that you can do it again, then again, then again. And when you’re finally able to replicate your successes, then you’ve got an official business!
Should you legalize your business right away?
This is a hot topic among those who want to run their own business but still feel compelled to comply with the law.
I didn’t mention this in any of the steps above because when you’re still in the validation phase of your business, your business is still, technically, a hobby. So, there’s no point in legalizing it and formalizing it until you are actually generating revenue.
How to Start a Business from Scratch: In Conclusion
I hope that this article has helped you understand how to start a business from scratch in 2022.
If you’re ready to dive into more in-depth training, where I will walk you through details of the entire 3-phase strategy I mentioned above, click here to register for my free 60-minute masterclass.
Thanks for reading, and good luck building your dream!