How to Start a Profitable Business: 10 Smart steps to follow

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How to Start A Profitable Business: 10 Smart Steps To Follow

So you’re now convinced that it’s totally meaningless waiting endlessly for the Oil company or Bank job. So you’re willing to start a profitable business?

Or do you have some cash with you and you’re thinking of how to start a business with it?

In any case, the decision to start your own business is a very noble one. Indeed, when you look back years from now, you’d be happy you took this decision.

So now, let’s discuss

How to Start a Profitable business in 2019

Here’s what to do to get your business up and running

1. Identify a problem or a need

Businesses are not just businesses. They are solutions to problems that generate revenue. Remember what they say: if your solution solves a problem, then you’re in business.

So, first, you must identify a need that you can satisfy if possible in a unique way.

You don’t have to invent the wheel! You could just look out for a gap in the existing solutions which you can fill.

Once you’ve identified a need, the solution to which people are willing to pay for, then you’re well on your way to starting your own business.

Let’s say you’re a student. You know that young people always want to be online. For this, they need data which might be quite expensive for most of them.

That’s a problem! There’s need for cheap data services. How can you solve this?

Or let’s say you’re living in a neighborhood where residents go out to barb or style their hair, fix their cars, sew their clothes etc.

These are all constant needs that people would be willing to pay for. Can you offer these services?

2. Develop a unique solution

So you’ve realized your fellow students desire access to cheap data services that are reliable.

How can you solve this problem?

Can you buy the data in bulk from the service providers and resell it to these students? That way, it comes at a cheaper rate to these students while you also make some money.

What about starting a barbing or hairstyling salon, an automobile repair workshop or tailoring service in the area?

You may also like 3 Proven Ways to make your business disruptive

3. Ask for Opinions About the solution

Try to find out what people think about the solution. You never could tell, maybe that’s what they’ve been yearning for.

A friend of mine, John, once told me about how visitors to residents of an estate he lived in would bang the gates just to get the attention of the residents.

Sometimes, the bang would be so loud, you might think it’s some armed robbers trying to gain access.

While we laughed about it, it struck me that an electric bell might save them from the embarrassment.

I told John to approach those residents with the idea of having an electric bell fixed at their gates.

The idea was so welcome and just in a breather, he had over 50 orders. He then hired someone who was skilled in fixing electric door bells and the business was done.

From then on, he got tons of referrals and just like that, he’d landed a well paying business.

4. Develop a Unique Selling Point for your solution

Yes, you could offer a barbing or hairstyling service but you don’t get the patronage that you initially anticipated.

This you’ll agree with me can be very frustrating.

The reason?

You’re not offering any value that’s unique enough to encourage residents of the area to abandon their current hairstylists in favor of your services.

If you’re fixing automobiles, you should do more than just fixing cars.

Why not offer free car wash service and free home delivery service?

Why not offer the highest level of convenience to your customers. Everyone likes convenience and most likely, they might not be getting this from their current repairers. So you get an edge.

Note that 9 out of 10 times, the business you’re starting is already in existence. So, you must expect competition which isn’t any good news for a starter.

Your only saving grace is your unique selling point. That’s your competitive advantage.

You don’t have it? You’ve got no business doing business.

Read Also 10 Things You must do to succeed as an entrepreneur

5. Test your unique solution

For most people, once a solution has been identified, the next on the agenda is to look for funding to implement the solution.

The bad news is that that’s a recipe for failure.

Test your solution to see if it really has a market value.

Sometimes, we get so excited about a solution we’ve developed that we fail to understand that not all solutions have market value.

Sometimes the market value might be geographically influenced.

For instance, the cheap data services we mentioned earlier is a smart solution. However, it has no market value in rural communities where access to internet-enabled mobile devices is highly restricted.

So, you’ve got a solution? Use whatever resources you have at your disposal to test the solution on a small scale.

Let’s say, the full implementation of the solution requires about $500. If what you have with you is about $50, start with that.

Testing your solution will help you in 5 ways.

  • It will give you a first hand market experience.
  • It will enable you understand the challenges in the business, hence, help you prepare adequately for full implementation.
  • It will save you from incurring losses in the event that the solution has no market value.
  • It will inform you of the exact areas that need funding. This way, you can accurately determine the exact funds you need.
  • It will enable you build that critical initial clientele for the full business start up.

6. Write a business plan

For most entrepreneurs, this should come first. But the fact is, without the previous steps mentioned, your business plan will be at the very best, a bunch of fiction.

With the information gathered through the market test, you can write a business plan. This will give your business direction and ensure you stay focused.

There are tons of business plan templates available online. You can check out this one to guide you on writing your business plan.

Note that when writing your business plan, you have to be as factual as possible. You can’t afford to base your business fortune on false premises. That again is a recipe for failure.

7. Seek for business funding

If you lack sufficient resources to fully implement your solution, you might consider approaching friends and family members for support.

If that fails to yield the desired result, then, you might want to approach a financial institution or a venture capitalist.

Note however that financial institutions are not too eager to invest in startups. You must show verifiable evidence that you’ve done sufficient market test to increase your odds of landing some funding.

Again, if approaching a venture capitalist, bear in mind that you might have to part with a share of the business in exchange for the investment required. Some might want a return on investment rather than equity.

Whichever funding option you decide to explore, ensure that you study the terms and conditions very thoroughly. That way, you know exactly how to follow each accordingly.

By the way, there are tons of business funding opportunities especially for African entrepreneurs. These are published regularly on Entrepreneurs’ Square

One of such opportunities is the Tony Elumelu Foundation Entrepreneurship Program.

If you can secure a Tony Elumelu grant, that will be great. Great most importantly because, as a grant, you’re not obliged to pay back.

Therefore, you’re not under any timebound repayment obligation that might drive you into making hasty business decisions.

Read Also 7 Reason why you can’t secure funding for your business

8. Start A Profitable Business

Having secured funding for your business, it’s time to take a plunge and start a profitable business.

Launch your solution fully and hone your unique selling point.

You don’t have enough, so, apply resources only where they’re necessary.

Follow your business plan as much as you can, but be flexible and responsive to market realities.

Use technology as much as possible to reduce your overheads.

Keep an eye on what your competitors are doing so you can compete effectively.

Ensure you’re quality conscious. There’s never a second chance to give a first impression. By the way, first impression almost never gets eroded.

9. Build your skills

You don’t need to be told that when starting out, you don’t have the resources to hire many people.

Most times, you’re the finance guy, the admin guy, the technical guy, everything at once.

What that means is that you must build skills across these areas, so, your business does not suffer.

Thanks to the internet, you can now acquire almost any skill you wish to have completely online. Even if you wish to learn how to pilot an Airbus A380, you can.

So, get online, enroll for courses in financial management, marketing management, operations, Human Resources etc.

Go ahead and implement the skills acquired in managing your business.

10. Network with mentors and peers

Remember: if you want to move fast, move alone, but if you want to go far, move in groups.

I bet you that moving far is more important to you than necessarily moving fast.

So, ensure you network with those who have been in the business before you. This way, you can leverage their experiences and avoid their pitfalls.

Same goes with having a mentor. It’s extremely important!

A mentor will guide you especially when you’re confused and have difficulty taking some very critical business decisions.

Choose a mentor, preferably in the business you’re currently involved in. A plurality of mentors is also advised, so you have a range of choices to make.

Having chosen a mentor, ensure that you’re truthful about the challenges you’re facing in your business. This will enable them give you workable advice.

Networking with peers and mentors will enable you understand trends, and adjust your business priorities accordingly.

You may also like 8 Smart ways of raising capital to start your business

Register for the Tony Elumelu Foundation Entrepreneurship Program Today and stand a chance of winning $5,000 to start or expand your business.

Good luck as you make a decision to start a profitable business today.

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