6 Steps To Complete Before Starting A Business

Creating a company is easy, but if we want it to have a long life, we have to follow some steps so as not to crash at the first change.

1. Business Idea

Undoubtedly the most important thing. Without a business idea there is no company. And with a little verified and verified business idea there will be no company either. Or it will be a company with a very short life.

For the business idea to be possible you have to analyze three vital points.

• Competition
• Business trends related to that business idea
• Consumer behavior

Normally we choose a business because we have knowledge of the sector, because it is a business that we see is simple and profitable, in principle, or because we see that there is an opportunity, that in such a place there is no offer of something, an idea that we have seen outside and that we think it would work here, a friend who proposes to be partners…

All of this has to be reflected in a business plan. Look on our website for the numerous posts about company or business plans. You have many examples to download.

With this, what we will do is a detailed analysis of our entire project. It will help us to see your profitability. There we must describe the essence of the business project and its most important aspects such as the work team, the product or service to be offered, analysis of the competition, the demand for our product. financial forecasts … All this will bring us a little closer to see the profitability of the business.

2. Choice of legal form

Choosing the legal form to create a company is absolutely essential. Depending on the activity that we are going to carry out, we must give it one or another legal form. Other influencing factors are creation costs and tax costs, third party liability and the social security system.

Most common types of companies

• Freelance or individual entrepreneur: It is the most common. It does not require capital to start. You simply pay a monthly fee as a freelancer and you can invoice. If you start now as a freelancer you have many advantages. Check out our post flat rate for freelancers.
• Community of goods: It usually occurs when several freelancers join or associate to operate. At least 2 partners are required, but no minimum capital. This formula is ideal for small businesses. In practice, it consists of a private agreement between two or more autonomous, community partners.
• Civil society: private collaboration contract between two or more people who wish to carry out a profit-making activity together. These people will be able to choose between contributing work, which makes them “industrial partners”, and / or goods or money, which makes them “capitalist partners”. It is unusual, in addition, this year they are taxed for corporation tax, with which they must keep a commercial accounting, greater spending on consulting and a new way of registering and declaring income. .
• Anonymous society: Very similar to the previous one with a lot of flexibility in its legal regulation, with limited liability but with a minimum capital of 60,000 euros. Three partners are required and the majority of the share capital belongs to workers who provide services to the company.
• Cooperative Society: The initial capital is reflected in the statutes of the company. They are usually made up of people who come together to carry out a business activity. They unite efforts and capital to carry out a business activity that each could not carry out separately.

You can read the post Setting up a company in three days from SumaCRM to see how easy the paperwork is to do and what you can do yourself.

And consult the Information Center and Business Creation Network (CIRCE), an information system that allows you to carry out the procedures for the constitution and start-up of certain commercial companies in Spain electronically.

3. Market study

To do a market study we must know the market we are going to target and have a lot of data. It is essential when starting a business. The best way to solve all your doubts about whether your business will work is to study the market and see if our store or product will fit in that market. It will also serve to give us the most timely approach to our business. Therefore, it is convenient that you yourself carry out this study.

A basic market study must analyze the competition, analyze the customer or consumer and prepare a strategy. It must be completed with basic data such as the type of products sold, competitive prices and advantages, distribution channels and differential value that we provide, which may be a lower price, more quality or a product with little supply in our area of operation.

To carry out a market study we have to resort to official sources to obtain data, statistics and economic reports. The bank of Spain, chambers of commerce, town hall bulletins …

4. Marketing plan

The marketing plan provides a clear vision of the final objective and what you want to achieve on the way to the goal, at the same time informs in detail of the situation and position in which we find ourselves, marking the stages to be covered for its achievement.

The marketing plan must be carried out in the short term, one year maximum. It should be simple, easy to understand, and realistic about goals.

The elements that a marketing plan must contain are the 4Ps: Product, Price, Place and Promotion.

• Product: Here we have the product portfolio, its differential value, brands, models, packaging, new products to incorporate
• Price: It is not only the real value of the product, but what that product costs, the time used and the effort caused.
• Place: Distribution. How we make the product available to the customer to stimulate their purchase and the channels we are going to use.
• Promotion: The communication. Personal sales, direct marketing, sales promotion, advertising, propaganda … The methods that we are going to use to give ourselves visibility.

There are tools that can help you, such as the Adobe Spark Marketing Plan Models, which allow you to easily design a professional marketing plan to share with your team.

5. Analysis of the project

One of the best methods to analyze your project would be to do a SWOT analysis. Weaknesses, Strengths, Threats and Opportunities. It is a diagnosis of our company. It will help us to consider the actions that we should take to take advantage of the opportunities identified and to prepare our organization against threats, being aware of our weaknesses and strengths.

On this page of the Ministry of Industry you have a case study and a tool to make your SWOT.

As internal analysis of our project we will assess our strengths and weaknesses and as external elements we will assess threats and opportunities.

You just have to take a sheet, divide it into 4 and list in each of them the weaknesses, strengths, threats and opportunities. Some will depend on ourselves and others will be external elements.

Internal analysis of our project

Weaknesses. Financing problems ?; What should be avoided ?; What do people in the market perceive as our weakness ?; What factors reduce sales or project success? What can we improve on?

Strengths: What advantages does our company have ?; What do people perceive in us as a strength ?; What do we do better than our competition ?; What low-cost or unique resources do you have access to ?; What elements facilitate getting a sale? For example strengths could be a motivated team, personalized sales, competitive prices, higher quality, technological development, good marketing …

External elements that will affect our company

• Threats: What obstacles do we face ?; What are the competitors doing?; Is it a sector where new competitors will emerge ?; Do we have enough staff ?; Is there sufficient demand for our product or service? Examples could be larger companies with more resources, expensive experienced contractors…
• Opportunities: What opportunities can we take advantage of ?; What market trends is available information ?; Is there a positive situation in the country’s economy ?; What changes in technology are taking place in the market ?; What changes in the legal and / or political regulations are taking place ?; Are there changes in social and lifestyle patterns? As an example would be access to subsidies, new technologies, products or services with little supply …

The important thing once our SWOT analysis is done is to obtain a result in which we have the least number of threats and weaknesses (negative things), and the greatest number of opportunities and strengths (positive things). We must put the means so that threats and weaknesses throw back our project.

6. Financing to create a company

Any company has its expenses. If we do not have the initial capital we will have to go looking for external financing. Today, apart from banks there are several sources that we can turn to.

We also have national aids and incentives for the creation of companies. Take a look at the main financial aid we could avail of.

In the income statement will be where we will include income and expenses. For this we have to have a feasibility plan that will be the document where we can see the adequate structure of our business that will allow us to achieve our objectives. You have to quantify expenses and ability to generate income. With the viability plan is where we can really make management decisions and see if our company is really profitable.