How to Launch Your Own Small Business

Define your goals. Do you seek financial independence, aiming to eventually sell your company to the highest bidder? Or do you envision creating a small, sustainable company that you enjoy working for and earning a steady income from? These are the key questions to answer right from the start.

Choose an Idea. It could be a product you've always wanted to create or a service that you believe is essential for everyone. It may even be something that customers don’t yet realize they need because it hasn’t been invented yet!

• It’s helpful (and fun) to invite other smart and creative people to join the brainstorming process. Start with a simple question like: "What will we do?" The goal here is not to create a business plan but to generate ideas. Many ideas might be useless, some may be ordinary, but a few will have great potential.
• Consider your talents, experiences, and knowledge when choosing an idea. If you have specialized knowledge or a unique skill, consider how you could apply that to meet certain market needs. Combining your skills and knowledge with market demand increases the likelihood of a business idea's success.
• For example, you may have worked for an electronics company for many years and notice a specific need for an electronic product in your community. You can then combine your expertise with this market demand to attract customers.

Come up with a Name. You can do this even before you have a business idea, and if the name is good, it might help shape your business concept. As your plan develops and begins to take shape, the perfect name might come to you later, but don't let that hold you back in the early stages. Create a temporary name and don't be afraid to change it later.

• Always check if the name you have in mind is already taken by someone else before choosing it. Try to come up with a simple, easy-to-remember name.
• An example is the famous brand name "Apple". Names like this are not only simple and easy to pronounce but also memorable and stick in the minds of consumers.

Determine Your Team. Will you be working alone, or will you invite one or two friends to join? Collaborating with others often leads to great synergies because people tend to bounce ideas off each other. Two people working together can achieve results far greater than their individual contributions combined.

• Think of successful partnerships in history such as: John Lennon and Paul McCartney; Bill Gates and Paul Allen; Steve Jobs and Steve Wozniak; and Larry Page and Sergey Brin. In all these cases, collaboration led to the best outcomes for both parties, and they all became billionaires. Does a partnership guarantee that you’ll become a billionaire? No, but it certainly doesn’t hurt!
• Consider your own weaknesses or areas where you lack expertise. Look for a partner who complements your skills and personality—someone who can fill in the gaps in knowledge or abilities, ensuring your business has the resources needed for success.

Make Smart Choices. Be cautious when selecting a business partner. Even with your closest friends, your best friend might not always be the best business collaborator. Start with someone trustworthy. Consider the following when choosing a partner or collaborator:

• Does this person complement your weaknesses? Or do both of you have identical skills? If the answer is the latter, think carefully, as you’ll end up with too many chefs cooking the same dish and no one will be able to do the others’ job.
• Do you have a broad view of the bigger picture? While arguments over details are important and contribute to effective work, failing to see the bigger picture might cause the company’s main objectives to veer off track irreparably. Ensure your team members are as committed to the company's mission as you are.
• If interviewing others, learn how to recognize talent beyond academic degrees or certificates—or the lack thereof. Each person’s inherent talent may be different from the education they have (or have not) received. Finding "a perfect fit from the start" and recognizing hidden talents as well as qualifications is crucial.

Create a Business Plan. A business plan helps define everything you need to promote your company, whether big or small. It summarizes the purpose of your business in a single page and serves as an outline for investors, banks, and other parties to assess how they can best support you and determine whether your project is viable.

Write a Business Description. A business description goes into more detail about your business operations and explains how it fits into the market. If your company is a corporation, LLC, or sole proprietorship, explain why you chose that structure. Describe your product, its features, and why customers need it. Address the following questions:

• Who are your target customers? Once you understand who they are and what they want, you can build your marketing strategy.
• What price point will your customers be willing to pay for your products and services?
• Who are your competitors? Conduct a competitive analysis to identify your main competitors. Research who is doing something similar to you and how successful they are. Understanding why others failed is equally important.

Create an Operations Plan. This plan will describe how you will produce or distribute your products and services, along with any related costs.

• How will you create the product? Is it an existing service or something more complex like software, a physical product like toys or ovens? Whatever it is, how will it be made? Develop a process from raw materials to assembly, packaging, warehousing, and shipping. Do you need to hire more staff? Are unions involved? All these elements should be included in the plan.
• Who will lead, and who will follow? Define your company's organizational structure, from receptionists to CEOs, outlining each role and its responsibilities. Understanding the structure helps plan operational costs and adjust the necessary capital for smooth operations.
• Seek feedback. Friends and family are great sources to ask questions and gather insights. Don't hesitate to ask for opinions and listen to their suggestions.
• Consider the need to scale your business. This is more common than you might expect! Once your goods start piling up, you may need to store them in your living room, bedroom, or garden. Consider renting warehouse space if necessary.

Develop a Marketing Plan. While the operations plan describes how you will produce your product, the marketing plan outlines how you will sell it. When creating your marketing plan, try to answer the questions about how you will promote your product to potential customers.

• What types of marketing will you use, such as radio ads, mass media, promotions, billboards, networking events, or all of the above?
• Define your marketing message. In other words, what will you say to persuade customers to choose your product? This ties into identifying your Unique Selling Proposition (USP)—the one thing that sets your product apart and solves a customer’s problem. This could be a lower price, faster service, or higher quality than your competitors.

Build a Pricing Model. Start by researching your competitors’ pricing. You need to understand how much they charge for similar products. Can you add value to your product to make it stand out and offer a more attractive price?

• Competition is not just about products and services. It also involves social and environmental responsibility. Customers are increasingly concerned about whether your business is responsible toward workers and the environment. Certifications and awards from reputable organizations, such as rankings and ratings, can assure your customers that your product or service carries higher value compared to those without such credentials.

Calculate Financial Metrics. Financial reports translate your marketing and operational plans into numbers, profits, and cash flow. These reports help determine how much money you need and how much you can expect to earn. Since this part of your plan is the most variable and also the most critical for long-term stability, you should update it monthly during the first year, quarterly in the second year, and annually thereafter.

• Consider startup costs. How do you plan to finance your business’s initial operations? Options include bank loans, startup funds, venture capital, small business management programs, or personal savings. Be realistic when starting up. You won’t make 100% of your expected revenue right away, so you should have a reserve fund to keep operations running until everything is in place. One of the quickest paths to failure is a lack of capital.
• What price will you charge for your product or service? What is the production cost? Estimate your net profit, factoring in fixed costs like rent, utilities, labor, etc.

Create an Executive Summary. The first part of your business plan is always the executive summary. Once you’ve developed the other sections, summarize your business idea, how the company will make money, how much capital is needed, the current position including legal status, stakeholders, and a brief history, and anything else that makes your business look like a success in the making.

Build the Product or Develop the Service? Once your business strategies are planned, finances calculated, and basic personnel set up, it's time to begin. Whether it’s working with engineers, coding and testing software, sourcing materials and shipping to a production facility, or purchasing in bulk and setting prices, this phase is your preparation for launching the product into the market. During this time, you may notice the following:

• It’s necessary to adjust your ideas. Perhaps your product will be more attractive with different colors, textures, or sizes. Maybe your service needs to be scaled up, narrowed down, or refined. This is the time to focus on anything that arises during the trial and development phase. You will undoubtedly recognize what needs modification or elimination to stand out from the competition.

Ensure Startup Funding. Most businesses require capital to get started. Money is often needed to purchase supplies, equipment, and cover operating costs before profits are generated. Initial funding typically comes from personal savings.

• Do you have any investments or savings? If so, consider using part of your savings to fund your business. However, you should never invest all your savings into your business to avoid the risk of failure. Additionally, do not invest emergency funds (experts recommend keeping 3-6 months’ worth of income aside for emergencies) or money you’ll need for other obligations in the next few years.
• Consider taking out a home equity loan. If you own a house, getting a home loan could be a good option, as these loans are typically easier to approve (since your home is used as collateral) and often come with lower interest rates.
• If you have a 401(k) savings plan through your employer, consider borrowing from it. The plan usually allows you to borrow up to 50% of your account balance, with a maximum of $50,000 (applies in the U.S.).
• Think about saving in advance. If you have a job, set aside a portion of your income each month to fund your startup costs over time.
• Consider small business loans from banks. If you go this route, consult multiple banks to find the lowest interest rate.

Monitor Your Operating Costs. Pay close attention to your operational costs to ensure they align with your business plan. If you notice unnecessary spending, such as on electricity, phone bills, office supplies, or packaging, take a moment to assess what is truly necessary and look for opportunities to reduce costs or eliminate them entirely. Be frugal during the early stages of your business, such as renting equipment instead of purchasing, and using pre-paid plans for essential services rather than committing to long-term contracts.

Prepare More Money Than the Minimum. You might think that 50 million VND is enough to get your business off the ground, and in some ways, it is. This amount might cover the cost of furniture, printers, and raw materials in the first month. However, by the second month, you'll still be in the production phase, but rent will be due, employees will want their wages, and all bills will come in at once. When that happens, you'll wish you had more. Therefore, if possible, aim to set aside enough money for a full year, assuming that you won’t generate any income during that time.

Save Every Penny. When starting out, plan to minimize spending on office supplies and other overhead costs. You don’t need glossy office furniture, the latest ergonomic chairs, or expensive artwork on the walls. A small filing cabinet will suffice, and meeting clients at a café is perfectly fine. Many startups fail because they overspend on office furnishings, instead of focusing on building the core of the business.

Select Your Payment Methods. You'll need to determine the best method for accepting payments from customers. Programs like Square are excellent for small businesses as they require minimal paperwork and have low fees. However, if you're not keen on using too much technology, you can still opt for the traditional approach of opening a business account at a bank.

• A business account at a bank is a contract where the bank provides a credit limit to businesses that wish to accept card payments. In the past, businesses couldn't accept payments from major credit card organizations without such a contract. However, Square has changed this dynamic, so don’t limit yourself to traditional methods. Explore new technologies.
• Square is a card reader that connects to smartphones or tablets, transforming them into a payment terminal. You may often see this device in use in cafés, restaurants, food trucks, and other businesses. (Look for a small plastic card, about the size of a postage stamp, plugged into a smartphone or tablet.)
• Note that payment solutions such as PayPal, Intuit, and Amazon also offer similar services. Be sure to explore all your options before deciding on one.
• If you're operating an online business, PayPal is an excellent service for receiving and transferring payments.

Consider Hiring a Legal Representative or Consultant. Transitioning from an employee to the owner of a small business can be overwhelming, especially when you're putting in long hours without any pay. You’ll face many challenges, such as navigating a mountain of regulations, from drafting contracts and city ordinances to local government licenses, provincial rules, taxes, fees, contracts, stock options, partnerships, and more. It can be reassuring to know you have someone you can call for advice when legal issues arise. This is an invaluable resource that will help ensure the success of your business.

• Choose the right person who understands your business operations. Ideally, you’ll want someone with experience in the field, as hiring an inexperienced legal consultant can result in legal complications, fines, or even jail time.

Hire an Accountant. You'll need someone capable of skillfully handling financial matters. Even if you can manage your own books, it’s essential to have someone who understands the tax side of running a business. Tax accounting can be very complicated, and at the very least, you’ll need a tax consultant. Again, it’s not about how much money they’ll manage for you, but that they are trustworthy.

Establish Your Business Entity. You’ll need to understand which type of legal entity will help you minimize taxes and attract investors. Once you’ve decided whether to raise capital through personal funds, outside investors, or loans, along with advice from tax and legal professionals, you’ll be able to choose the best legal structure for your business. This is one of the final steps before you begin spending money or seeking investments. Most people are familiar with the corporate, LLC, etc., structures, but for many small business owners, you should consider one of the following:

• A sole proprietorship if you’re running the business alone or with your spouse (no employees).
• A partnership if you plan to run the business with a partner.
• A limited partnership (LP), which is formed with general partners who take unlimited liability for the company and limited partners who have liability only up to the amount of their investment. All partners share the profits and losses.
• A limited liability partnership (LLP), in which no partner is responsible for the mistakes of another, providing protection from negligence on the part of another member.

Build a Website. If you’re selling products online, prepare your e-commerce strategy and create a website or outsource the job. Your website serves as your storefront, so make sure it’s designed to entice customers to visit and stay.

• Similarly, if your business focuses on personal interactions, traditional marketing methods are important. For example, if you’re starting a real estate business, focus on word-of-mouth marketing to your neighbors before launching a website.
• When creating your website, remember that simplicity and clarity are key. A clean design that clearly presents what you do, how you do it, and the pricing for your products will be the most effective. For your website, highlight why your business is the best solution to your customers’ problems.

Hire a Professional Designer. If you decide to build a website, make sure it looks truly professional. While the initial design costs may be high, a well-designed, visually appealing, and trustworthy website is essential. It should look polished and operate smoothly. If you plan to incorporate transaction/payment features on your site, invest in secure encryption and carefully vet the companies to ensure they are reputable and secure with your funds.

Unleash the Salesperson Within You. You may have complete faith in your product or service, but to succeed, others need to trust you too. If you're new to advertising, marketing, or simply dislike selling, it’s time to push past those barriers and develop your sales skills. You need to craft a compelling pitch that convinces potential customers why they need your product or service, highlighting its value, purpose, and the potential it offers. Write your pitch in various ways until you find the most effective one, and make sure you're always ready to deliver it. Practice until it feels natural!

• Depending on your business type, you may also need eye-catching business cards.

Invest Time in Social Media Growth. This can even be done before launching your business to build awareness. Use Facebook, Google+, Twitter, and any other social platforms you believe will help generate interest and promote your brand. You can create intrigue and encourage people to follow your progress. (Make sure to set up a business account for your company, separate from your personal account. Your message should be tailored to each platform’s audience.)

Implement Your Marketing and Distribution Plan. Once your product or service is ready, it's time to start selling and marketing.

• If you plan to advertise periodically, you'll need copy or images at least two months before your launch.
• If you're selling in a store, take pre-orders and set up your booth. If you're selling online, ensure your website is functioning smoothly.
• If you’re providing a service, promote it in relevant industry magazines, newspapers, and online platforms.

Ensure Your Workspace. Whether it’s an office or a storage space, if you need more room than your bedroom, it’s time to make a move.

• If you don’t need an extra office outside your home but occasionally need a place to meet with partners, there are venues available to accommodate this. A quick search on Google for "rent meeting space in [city/state]" will give you various options.
• Make sure to check with local authorities to understand zoning laws. Some types of small businesses cannot operate in cramped spaces, and it’s crucial to ensure your business is in a location where it’s legally allowed to function.

Introduce Your Product or Service. Once your product is complete, packaged, fully programmed, or your service is finalized, host a special event to unveil your offering. Distribute press releases and spread the word far and wide. Post on Twitter, Facebook, and let your product images flood the market. You’ve got a new business!

• Host a small party and invite those who can help promote your product. It doesn’t have to be expensive; you can buy food and drinks from discount stores and ask friends or family for help (in return, you can offer them the product or service).