Founding your own business and becoming an entrepreneur has never been as popular as it is today. There are many innovative startups out there that provide fantastic services and products, and they go on to be multinational, even multimillion dollar businesses. However, before a company can transition from a startup to a multimillion dollar corporation, it needs to undergo the startup phase.

And most importantly, before you can found a startup, there is some groundwork to be laid. Though founding a company is nothing more than a bunch of paperwork, in theory at least, before you do send in the papers, you should have a set plan for your business and how to execute it.

Reza Shojaei is the owner of Value Marketing - a company that he took from a small startup to a multinational corporation that employs dozens of people globally. Today, he will advise us on what every entrepreneur should do before founding a startup.

A thorough business plan is your key to success

Before you can even imagine getting started with founding a business, you have to have a great idea and put it on paper. A thorough business plan is vital for any business, and it should be comprehensively drafted.

A business plan includes, for instance, the contact information and mission statement for your company, business idea, target demographics, marketing plan, financial projections, and more.

- A business plan is a living organism that can be updated when needed. For instance, our company did not, in fact, get started in the casino industry. Instead, we used to do face-to-face marketing. Later on, we updated the business plan as we redirected our company to a different direction, Shojaei says.

A business plan is all about math. At the end of the day, your business can only be successful if the company brings in more money than it spends. No matter how good your idea, product, or service is, your job as a future business owner is to ensure that it is going to result in profits.
Marketing plan is a part of your business plan
After you have drafted your business plan and included target audience and other details, you should also figure out how to market your service or product. After all, the more people know about your product, the more people will buy it.

A marketing plan includes, for instance, your marketing channels, goals, and budget. Each business should determine which marketing channels are the most effective ones and how to start marketing.

- Online based businesses can benefit from digital marketing very well, whereas local businesses might want to consider collaborations and even direct marketing, Shojaei advises.

Financial projections are important

Financial projections are an essential part of your business plan. After all, you have to ensure that your idea will result in profits. If you do not have any financial transactions to base your projections on, making estimates can be rough. Despite this, you should make projections at least for the first year, and divide the year into quarters.

If you are involving investors into your projects, they will most likely want to see financial projections further out into the future, for instance, 5 years ahead.

Think about the location

In business, location can be the difference between a successful and an unsuccessful business. Of course, if your business is online-based, this does not apply to you. However, if your business is a local shop or a store, you will need to scout possible locations carefully. Even a block into the wrong direction can limit your cash flow.

Choosing a central location where people see your storefront and express curiosity maximizes your profits.

Where does the money come from?

Almost every business needs to have some capital in the beginning. Usually, businesses have overhead costs that need to be paid before a business can open. For instance, you might need to make investments, such as buy equipment or inventory. Also, you will need to cover the cost of rent and utilities, as well as pay your employees.

In the first months, the business will not be making a profit. This is why you as a business owner need to have either savings, a business loan, or an investor backing you up. In fact, many promising startups fail simply because they do not have enough capital to start out. They struggle the first couple of months before filing for bankruptcy.

So, before opening your own business, ensure that you have money to operate the business and cover all costs until it starts to make profits.

In conclusion, proper planning is half the work. When planned properly, a business can excel and move from a startup to a multimillion dollar corporation at a steady phase, growing and making more profits.