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• January 5, 2021

How to create a company or business in 2021

Reading Time: 13 minutes

Creating a successful company or business involves understanding and carrying out a series of steps, including legal and financial procedures, as well as advertising and marketing processes, among others.

Although you currently have a great entrepreneurial spirit to finally start the company of your dreams, you must first consider some elements that will allow you to fulfill them.

Many times, it is not enough to have a good business idea, but also to know the steps and strategies to start it, since at first glance it can be an attractive idea, but it is necessary to know how to execute it without complications.

So, our purpose in this new post is to help you discover how to create a company or business in 2021, so that your plans are not frustrated by the appearance of any obstacle in sight.

Keep reading with us.

What key aspects should we consider before creating a company or business this year?

As we mentioned before, creating a company or business, especially if it is an online store, involves addressing the following aspects:

• First, know what the legal processes or procedures are.
• Then your financial status
• Also, sales and marketing.
• Protection of intellectual property.
• On the other hand, human resource management.
• Among others.

In addition to these elements, an entrepreneur must train and be prepared to keep a business going, since it is important to know how to balance the accounts, interact with your clients, and impeccably maintain the values ​​and services of your company, both online and offline.

In short, starting a business requires planning, making crucial financial decisions and performing a series of legal activities, as we will see below.

What are the biggest challenges when starting an online business?

First of all, you should know that starting a business is a great commitment, especially because it is long-term.

Generally, many entrepreneurs belatedly understand that starting a company or business requires a significant amount of time, resources, and energy.

Before creating your own online or offline business you will need to overcome the following challenges:

• First, propose a quality product or service.
• Also, have a plan to create your brand.
• Have enough capital to invest.
• Hire great employees.
• Work the time necessary.
• Don’t be discouraged if customers don’t always choose your products.
• It is important to manage your time very well.
• Resist difficulties, even when you get less than expected results.

These challenges should not be taken as an obstacle to starting a business, but rather to allow you to think carefully about everything related to this new entrepreneurship and succeed.

So, to start you need to plan, establish your goals and objectives, and know your capabilities and everything you are willing to do to achieve it.

You should ask yourself: What are your strengths? What are your weaknesses? What are you passionate about or do you like to do? How much capital do you have to invest? Will it be a full-time or part-time business? What industries do you know?

Guide to start a company or business in 2021

Like any company that is created from scratch, you must follow a series of steps to get off the ground.

Now, we present the essential steps to follow to create the company of your dreams. Don’t miss them!

1. Define your business idea

If you are thinking of starting a company or business this year, you probably already have an idea of ​​what you want to offer or sell, or at least the market you want to get into.

If not, we give you some guidelines to investigate your market niche, and which is the best to implement in your company.

How do I find the product or service I want to offer?

First of all, take into account the following tips to find the best product or service to create a company or business:

• Your product or service has to be at least good, if not great.
• Also, it must differentiate itself in a significant and important way from your competition’s offers. This is important if you want to settle in the market.
• Having a trial product works for many startups as they fix the bugs of user feedback.
• The important thing is not to wait too long to put your product into circulation, so the sooner your customers start using it, the better for the future of your company.
• If you want to offer a particular product, but you don’t know anything about it or you don’t have more advanced knowledge, we recommend that you train before making your brand known. A good, well-known product is a better promoted product.
• Determine if the product is profitable. This means if it will produce the return on investment and an acceptable profit margin. It also evaluates if it does not produce more losses than gains.
• If your business idea is the same as your competition, verify that you can provide a better quality product or with better benefits for customers.
• Always ask yourself, why this product and not another? What needs will your product resolve?
• Don’t create your brand name if you haven’t established the value of your products or services before.

2. Do a market research in your country or area

Sometimes we want to start a business from a previous idea, however, it also happens that that idea is not viable if you do not have a market to target.

A good example is to sell clothes for winter, if your city is not usually cold.

Through market research you will know if there is an opportunity to turn your idea into a successful business.

In this context, market research is a way to gather information about potential clients and companies that are already operating in your area. So you can use that information to find a competitive advantage from those companies.

So, do not get discouraged if you think your idea could not work, because if you offer your potential customers some unmissable benefit that the competition has not taken into account, then you will have more opportunities to conquer that market.

How to do market research?

First, conducting in-depth market research on your niche and the characteristics of your potential clients is an important part of developing a business plan.

So, these are some of the questions that you will need to ask yourself and that you will need to answer to determine the market you will be targeting:

• First, study if there is a real demand: is there a group of people who might be interested in your product or service?
• Also know the market’s saturation: are there similar companies that offer the same products/services? How many?
• Then, the size of the market share: How many people would be interested in purchasing your products or services?
• Also, do not forget the financial indicators: What would be the average of your incomes or earnings? What are your expenses or salaries?
• On the other hand, analyze the geographical location: Where are your customers located? What are the boundary zones that you could reach?
• Prices: How much do your potential customers pay for your competitor’s products?
• Also, what are the best places to promote your product or service?
• Lastly, is the product or service relevant to market share?

Methods to do market research:

Here are some ways to obtain the necessary information for the market study:

• First, you can make surveys (you can make them online on social networks).
• Also, questionnaires.
• In the same way, you can do in-depth interviews.
• Finally, an investigation of keywords that users often use on the Internet to find what you offer. This research can be done with Google Ads or Google Trends.

Why is it important to carry out a market study before creating a company or business?

If you didn’t know, market research will help you understand your target customer, their needs, preferences, and behavior, as well as the industry and competitors.

If you didn’t know, many of the smaller companies have different products or services than the competition. This generates an important impact within the market, as it allows you to add a unique value to your potential customers.

On the other hand, it will allow you to level up and grow your business in less time than expected.

3. Write the plans that will allow you to create and maintain your business

Once you have determined what your business idea is, your next step will be to write your business plan.

A good business plan will guide you through each stage and business administration.

Your business plan will be useful as a roadmap to structure, operate and grow your business. It is a way of considering in detail the key elements that will allow you to achieve your objectives.

Within the plan you must include:

• First, your business purpose.
• Also, who is your potential customer. Write a profile of your potential clients where you consider the age range, gender, geographic location, interests, education, among others.
• And, how you will finance your business.

If you do not write a strategic sales plan in advance, you may find it difficult to face any obstacle or you may make a serious mistake by starting in a hurry, and without considering all the vital aspects.

Within the business plan it is important to include a contingency plan. In fact, the first thing they show us when getting into the cinema is the exit location for an emergency.

That is why a good business plan will help you determine where your company is heading, how you will overcome possible difficulties and what you will need to keep it up. 

Why write a business plan?

First of all, business plans can help you obtain financing or attract new partners to invest in your startup. Investors will want confidence that your investment is accurate.

This will be the instrument that you will use to convince people that working with you (or investing in your company) is a smart and wise decision.

How to write a business plan?

When writing a business plan it is important to include all the specific details related to the creation and maintenance of the business.

So it’s critical to provide a complete and detailed overview of your cash flow, expenses, and projections.

However, regardless of your type of business, all business plans generally follow a similar format with the following information:

1. Summary: First, you need to provide an overview of your business to your readers.
2. Company Description: This section is especially important when fundraising as it provides a high-level overview of your track record, business legal structure, your products/services, key partners, and summaries of your financial and business goals.
3. Products and services: Now, your business plan should include a detailed description of the products or services that your company will provide. This section should illustrate how your product benefits your potential customers.
4. Market Analysis: In this section, you only need to explain two things: the market needs and how your products and services meet that need. This includes specific customer segments, industry statistics, relevant marketing data, and a detailed analysis of the strengths and weaknesses of your competitors.
5. Management team: Includes an organizational chart with departmental descriptions and information of owners, employees, management team, board members, advisers, etc.
6. Financial plan: The last section of your business plan should be created with the help of a professional accountant. It includes important financial statements, such as historical financial data for the last three to five years, realistic budget forecasts for the next 3-5 years, and an analysis of all your financial data.

There is no right or wrong way when creating a business plan, since the important thing is to design a plan that can cover all the needs of your business.

Finally, it is crucial that you consider this advice: use your business plan and refer to it whenever necessary. Remember that this is your roadmap, even if your business is growing as you expected.

Your plan is there for a reason. Take it as a roadmap that allows you to check your way when you think you have taken a wrong turn. There is nothing wrong with reviewing your plan to get back on track or to make sure you are still on track.

4. Study your finances status

You must determine how much money you will need to carry out all the steps outlined in your entrepreneurship plan.

Do you have all the means to finance your start-up or will you need to borrow money or a credit from the bank?

If you plan to quit your current job to focus on your business, you should wonder if you have enough money to support yourself until you make a profit. It is best to find out how much your startup costs will be.

Many startups fail because they run out of money before they start making a profit. It’s never a bad idea to overestimate the amount of startup capital you need, as it may take a long time before your business starts generating the estimated income.

How do I know how much money I need to support my business?

Now, one way to determine how much money you will need is to do a breakeven analysis. This is an essential financial planning tool that helps business owners discover how profitable their business, product or service will be.

The break-even point formula is:

Fixed costs / (Average price – Variable costs) = Break-even point.

These are the three most common reasons for performing an breakeven analysis:

• Determine profitability: How much income do I need to generate to cover all my expenses? Which products or services make a profit and which ones don’t?
• Price: When most people think about prices, they consider how much it costs to create the product and how competitors price their products. So what are the fixed fees? What are the variable costs and what is the total cost? What is the cost of physical goods and what is the cost of labor?
• Analyze the data: What volumes of goods or services do you have to sell to be profitable? How can I reduce my overhead fixed costs? How can I reduce variable costs per unit? How can I improve sales?

5. Determine where your business will be located

The location of your company, of the objectives of your company or of your possibilities. You may simply want to start an online business, so you wouldn’t need a physical store, just a website with the functionality of a shopping cart.

Or maybe, you simply need to work from an office, your home or from a coworking space instead of renting a space or buying an office.

If you finally decide to have a physical space to establish your store, but you still want to have an online one, consider the following elements:

1. Cost: do you really need to invest in an office to establish your business? Can you afford this expense?
2. Visibility: will people be able to find you easily? Will they see your promotions and offers? Are you in the center of the city? How will this affect you?
3. Access to parking or public transportation: Can people easily find you in the parking options and transportation routes available? If they have to search too much, you better make it easier for them as they might give up.
4. Location of your competitors: Are there many competitors near? Consider carefully how you want to proceed.
5. Local, Municipal and State Rules and Regulations: Research the regulations as some areas may be more stringent than others. Make sure there are no restrictions limiting your operations or acting as barriers to your store.

6. Register your company with the government

In this step, to convert your company into a commercial institution officially at the legal and governmental level, you must register with the government.

To create a company or business you will need a registration document that includes your commercial name, commercial object, corporate structure, as well as details of actions and other information about your company.

Therefore, you should contact the government entity in your country to register your business and request information on rates and specific requirements. You will protect your company and it will be legitimate in all aspects.

Once you get your legal documents, you may be able to open a bank account with your company name, and start paying taxes.

You may be tempted to start just with a PayPal account and a social media platform, but if you start correctly, your business will have fewer setbacks to worry about in the long term.

Finally, during the management of these procedures, you will be able to obtain the licenses and permits that your company needs to operate at the national level. Some products or services require certain licenses in order to function legally.

This will depend on the laws of your country, as well as other factors.

7. Design a marketing plan

Every business plan must necessarily include an online marketing plan.

Before you start selling your product or service, you must develop your brand and all that this implies:

An attractive logo (it will help your clients identify your brand), an advertising phrase that engages and connects with your audience, and presence on various platforms: a website and social networks.

Use social media to spread your new business, you can also use it as a promotional tool to offer coupons and discounts to followers once they meet you. Or through subscription forms.

Opening an account on each social network will not be enough to keep your business active. To keep your audience hooked, it will be necessary to create a content marketing strategy.

It is vital to create new content to interact with your audience, and offer them relevant and valuable content about your brand.

On the other hand, many entrepreneurs think that having a website is more an expense than an investment.

Through a professional website, hosted by a trusted hosting service, you will give your public detailed information about your products or services and the option to buy directly from your website at any time and from any place, among others.

In addition, maintaining a website allows you to reflect online the personality of your business, as well as your values ​​and your vision.

If you are not on the Internet, you may not be able to attract the number of customers you hope to obtain. Currently users tend to search on the Internet everything that interests them, and if they do not find you there, they probably will not do it.

In short, creating a marketing plan is essential to reach clients. This process, especially in the beginning, is just as important as offering a quality product or service.

8. Grow your business

For the business to be successful, you must become a great salesperson or promoter of your services.

You will have to learn to “sell” your business, not only to clients, but also to potential investors and even potential employees.

It is important to be positive, reflect confidence and learn to listen.

Also, you should practice your sales pitch, and try to get comments or opinions from a variety of people. Even if you are not an extrovert by nature, you must show confidence and follow all the sales processes and after sales.

Finally, for your business to grow, consider the following strategies:

• Learn the basics of SEO (search engine optimization) so that people searching for your products and services online can find you near the top of search results.
• Also, constantly use social networks to promote your business (Instagram, Facebook, Twitter, Pinterest, etc.).
• Another tip is to get involved in content marketing by writing articles for relevant websites or other blogs.
• Implement an email marketing strategy. Get the email data of your customers attracting them with new and exclusive content, or with downloadable digital content, such as e-books, seminars, templates, among others. This will depend on what your company provides.
• Optimize your website to be responsive. This is a must, as more and more users make inquiries on the Internet through their phones or mobile devices.
• Also, get links to your website from other authority and quality sites.
• Even if you have an excellent content plan for social networks, we recommend that you dedicate a part of your investment to pay for ads on different platforms, because you will not only be able to attract traffic to your website, but you will also allow users to know you and recommend you.

Final conclusions

Before finishing, your launch and first sales are just the beginning of your long journey as an entrepreneur. So, to make a profit and keep your business on track, you must grow your business to new levels.

It will take time and effort, but you will soon be able to recover the money invested.

These tips will help you launch your business and prepare you to grow, but there is no perfect plan, especially because we must learn to adapt to changing times.

Finally, with an emergency plan you can be prepared to face any obstacle and maintain a successful business in the long term.

Now that you know how to create a company or business, it is time to start your business!