What Do I Need To Start A Business? (Answered!)

Like everything we do in life requires some essential things to do those things, starting business is no exception.

And this article is about highlighting those essential requirements in a way to make it absolutely clear to those who really want to start a new business.

This article is a must read esp. for those who are new (novices) to this whole “starting business thingy!”.

Now without further ado, let’s talk about those essential things. So that you go for business, right away!!! (winks!)

Things You Need To Start A Business

Money!

This one is kind of obvious one but the truth is most new entrepreneurs tend to neglect or underestimate its importance.

But the common business phrase “Return on Investment or ROI” says it all.

You need money to make money!

How much Money?

Coming to the how much part, then in that case it all depends on the following things

• Business model or business type
• Goals, objectives of that business
• Product/service type
• Skills you have/you don’t have

For instance if you want to go for online business with email marketing or affiliate marketing as your business model or type, where your goal is to sell some other online products or services by writing convincing SEO based quality content for specific niche.

And you are good at SEO based content writing (skill) but you are have no idea about php, html, css, web development (skills) etc to design, to manage your website, then in that situation you will need some money to buy or make a custom based SEO friendly website.

Plus you will need to pay like from $200-$500 per year to host your website with a personal top level domain name.

At the end of the day you may need like $250-$500 per year to effectively manage that kind of a business model, that’s all the money you may need to launch such a business.

One thing! If you are not hot in SEO based content writing (a very essential skill for such a business model) then forget about succeeding in it. 

So that is really essential skill to survive and thrive in such business.

Now the situation changes when you have different business model, like you want to get into bricks & mortars retailing for instance, there you may need money to pay for building rent, pay for supplies (products/service), pay for salesmen, pay for other fixed & variable costs like utility bills, store maintenance, decoration, layout, advertising etc etc

Products/services type in retail business also need money, like if you are dealing in a specific niche and high end products like high end smart phones for instance, then you will need to pay for those products along with the services they may have, to their respective dealers/brands.

Those brands may make it imperative for you to buy products/services of certain $ value, that means you will need money.

In retailing if your business goals or objectives are to achieve maximum sales then you may need to pay to experienced salesmen, to pay for high quality advertising, marketing, in case you don’t have the skills to make a marketing plan or to manage the accounting or financial side of your retail business then in that case again you will have to pay to get the job done.

At the end of the day, it is not necessary for instance if an individual start an x type of business with for instance $10k investment and  you think you will also need that much to do the same, no, no that’s wrong.
  

For instance you may start the same business in $2k due to your skills, capacity, experience, out of the box thinking, relationships in the niche/industry, the bottom line is, you will always need money, to run any type of business model efficiently & effectively.

Now if you want to go for like wholesaling business model type then in that situation you definitely need either huge amount of money or superb relationships + skills.

Let me tell you how!

Things You Need To Start a Wholesale Business

When you want to get into wholesale, almost every wholesale business requires huge investment unless you have been in the industry for years like decades (thus having superb skills/experience) and people/brands who are key to success of your wholesale business, knows you personally, have a rich long term relationship (relationship marketing) with you.

So to start a wholesale business the following things may need money

• Wholesale point or store/warehouse to safely store the items (products/services)
• Delivery vehicles or transportation to make bulk deliveries to big/small retailers
• Sales staff to make on schedule delivery of products/services to target businesses, to make relationships etc.
• Managing financial/marketing/management side due to lack of skills on your part or due to your unavailability for one reason or another.
• Getting supplies of products/service
• Fixed costs/variable costs
• Rules & regulations like buying license, buying distribution rights etc etc

Typically these are the things where money is needed but the main thing that can bring/cut down the whole required investment in such a business model is 1. Skills you have 2. Relationships you have, in other words how good you are at relationship marketing.

For instance if you have great relationships with delivery/transportation vehicle provider/manufacturer/brand, then in that case you may get the transportation vehicles on easy terms and conditions that means paying less for acquiring delivery vehicles.

Similarly for instance you have great skill in managing the overall affairs of your business, such skills in return will cut down the costs, likewise if you have great relationships with suppliers/brands/manufacturers you will get stuff easily with far lesser investment compared to the one who is totally novice.

And the same thing applies to launching a new brand/company where you want to take wholesale business to a new level aka becoming a manufacturer/producer of a given product/service.

Things You Need to Start a Brand/Company

So if you want to take wholesaling to the next level like starting a company then along with all these costs (mentioned in wholesale business model type) and conditions you may need to go a bit further like buying machinery to produce items, company/brand registration, license cost, sales staff costs, delivery or supply vehicles, buying raw materials, marketing, branding costs, financial management systems costs etc etc.

Again like a I said, things that make huge difference in cutting down investment costs in all these contexts are (will mention it again to highlight its importance)

1. Skills/Experience you have
2. Relationships you have or relationship marketing

If you have great skills plus great relationships then the money or costs involved will be minimum and vice versa.

Okay that sums up the money part, so now I will focus on things you may need in case you are zero in those two things (skills + relationships).

Other Things You will Need Beside Money to Start Any Type of Business!

So if you lack skills and don’t have relationships then in bricks & mortars type of retail business which is kind of the most reasonable business to start in such situation (situation where you lack skills + relationships), you will need the following things.

1. Getting supplies (products/services)
2. Having couple of sales guys to help you in managing in store activities
3. Marketing and advertising of your retail outlet
4. Branding of your outlet, to make your outlet stand out in the crowd
5. Paying for fixed/variable costs.
6. Having a simple digital system in place that let you know about the in store supplies or available stock in real time along with expiry dates, prices etc
7. Having contacts with the best suppliers, brands to get the best stuff, stuff having demand/market at best terms and conditions.
8. Managing accounting side effectively to know your business overall health, ROI etc.
9. Any other essential skills like for instance in baking industry you need to have extensive knowledge and skills in baking to make the best baking items or you would need to hire experienced people to get the job done effectively.

These are the essential things you need, to start a retail business and if you are looking for like single person business model then as I mentioned affiliate marketing/email marketing in the beginning that business model is the best way to launch your career as an Entrepreneur.

My Suggestion for Starting a Business

My suggestion would be even if you have good amount of money, at least try to learn the practical stuff from a2z, learn the essential things about a business model that you want to invest in or else it is more likely that you will regret it.

Learning things in practical manner about any business model can take from anywhere between 3 to 9 months.

Learning means making relationship with the Guru in your niche and spending time with him/her to learn all the practical tricks of the trade!

Starting business is easy but running a business effectively & efficiently is a whole different story, it’s not like it is not possible or really hard but to run the whole thing you need to have at least some practical idea about the whole thing.

Facts about Starting a Small Business

It takes just 6 days to start a business in the US, compared to a whopping 38 days in China

Here's how long it takes in some other countries around the world [1]:

New Zealand -- 1 day
Singapore -- 3 days
Saudi Arabia -- 5 days
US -- 6 days
UK & Ireland -- 13 days
India -- 30 days
China -- 38 days

Starting a new business is incredibly risky. According to the Small Business Administration (SBA), over 50% of small businesses fail within the first five years, and of those that make it, another 50% fail in the next few years.[2]

For more facts related to small business in U.S. check this article 21 interesting facts about small business in U.S.

The Bottom Line!

That’s why if you are Novice (considering the huge failure rate of small business mentioned above), I recommend you to start either online (with minimum cash) or start offline and by offline I mean don’t go any further than retail business, once you learn how to do the whole retail thing efficiently & effectively then go for wholesale or your own brand/company.

By knowing the whole thing practically I mean becoming Expert in retail and that requires at least 10K hours according to a research [3].

Lastly to be honest with you, you don’t need that business plan thingy on this level so don’t worry about that, if you can afford the things I mentioned above then go for it and worry not!

Over to you guys!

DON’T FORGET TO SUBSCRIBE for more actionable, handy tips!

You may like The DREAM! of Businesses: How to make a Super Product ?

References:

1. http://www.getbusymedia.com/small-business-stats/

2. www.sba.gov/sites/default/files/sbfaq.pdf

3. http://gladwell.com/outliers/