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Business

9 Tips for Starting a Small Business

Written by MasterClass

Last updated: Mar 4, 2020 • 3 min read

Everyone knows stories of companies that began in garages or dorm rooms, but no matter how humble the startup, success requires careful planning and an ambitious strategy.

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9 Tips for Starting a Small Business

If the prospect of being your own boss sounds appealing and you’re ready to launch your own company (and have the funding lined up to do so), these tips can help you start a successful business:

  1. Seize the moment. The world is filled with people who have great ideas for businesses, but only a tiny percentage of them are actually willing to take the initiative to pursue their ideas. If you really want to start a business, start today.
  2. Be passionate about your idea. Your small business idea will be more likely to succeed if it’s something you’re passionate about—rather than something you think could make you the most money. Many small business owners find that if they love the product or service they provide, they’re more likely to work harder and achieve success.
  3. Know the competition. How can you gain a competitive advantage if you don’t even know who the competition is? To achieve business success, you must familiarize yourself with your competitors so that you can stand out and break the mold.
  4. Keep your current job. It’s natural to want to immediately quit your day job to start working on a new business venture full-time. While it’s hard work to keep your job while you begin to grow your business, having a regular income will let you continue to save money. This could be useful if start-up costs are larger than expected. Remember, even the best small businesses usually aren’t profitable right away.
  5. Simplify your business plan. A business plan that’s too complex can be the death of a new small business. When first starting out, it’s usually best to focus on a simple idea and strategy. If you struggle to clearly explain your product or service in a single sentence, that’s a sign you may need to simplify things.
  6. Perform market research. One of the biggest factors in growing your customer base is having an effective marketing strategy for your business model. The first step to achieving this is to do a sufficient amount of market research to discover your target customers. Once you know your potential customers, you can make informed decisions on how to spend the money in your budget. Market research helps you know how to advertise effectively.
  7. Properly train new employees. Even the most driven new hires can’t instantly learn the ropes of a new business. It will often feel tedious to train your new employees well, but remember that the time you spend training them will pay off in the long run when they’re able to work independently without interrupting you to ask questions.
  8. Establish your own business as a legal entity. Since you’ll be dealing with business finances, you’ll need to legally form a business. Depending on your business needs, you’ll most likely want to form one of the following types of business structures. The first, a sole proprietorship, is the simplest form of business ownership; it makes no distinction between the business and the individual who runs it. The second, a limited liability company or LLC, is a popular incorporation choice because it legally separates your personal liability from the actions of the company.
  9. Get feedback from peers. You’ll be naturally inclined to listen to the opinions of established business experts or your business partners, but don’t be afraid to ask for small business advice from friends and family, too. Successful entrepreneurs know that opinions shared by peers can be an indication of how potential customers might react to the business.

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