Tennessee is home to Nashville, also known as Music City, as well as around 30 whiskey distilleries and Elvis Presley’s Graceland. Many classic American companies have sprung from it, including Piggly Wiggly, Mountain Dew, and Moon Pies. Tennessee has a favorable business environment, with lower taxes and a greater rate of corporate growth than the rest of the US. It also has a good shipping and distribution position.
If you’re considering about starting a business in Tennessee, this step-by-step guide will help you through the process of creating and launching what may be the next big thing to come out of the Volunteer State.
Step 1: Find Out if this is the Right Business for You?
The most important initial question is, what kind of business do you want to run? You could have multiple ideas, or you might not have gone that far. In any case, it’s prudent to examine the state as a whole as well as your personal ability to identify which places may provide the most possibility.
- Look to identify market gaps or issues that need to be addressed. Perhaps your town lacks a nice café, or perhaps the state’s agriculture industry needs to be modernized.
- Pursue your passion. What do you find appealing? What are your strong points?
- Examine the trends in Tennessee and the industries that are important to the state’s economy. Healthcare, transportation, and music and entertainment are all large industries, while IT services, construction, and finance are rapidly expanding.
Cost of Starting a Business in Tennessee in 2023
After developing your business strategy, you should have a good idea of how much money you’ll need to get started. The next stage is to get funding, and there are several ways to do so:
- Bank loans: The most typical way, however approval demands a sound business plan and a strong credit history.
- SBA-guaranteed loans: Through an SBA-guaranteed loan, the Small Business Administration can act as guarantor, assisting in obtaining that elusive bank approval.
- Government grants: A number of financial aid programs support entrepreneurs with funding. Visit Grants.gov to find out which ones are available to you.
- Venture capital: In return for funding, offer potential investors an ownership share in your company, keeping in mind that you will be giving up some control over your company.
- Crowdfunding: Websites such as Kickstarter and Indiegogo have become more popular as a low-risk way for obtaining cash for your project. Entrepreneurial crowdfunding services such as Fundable and WeFunder allow numerous investors to contribute to your firm.
- Personal: Fund your firm using your own money, the sale of real estate or other assets, and the help of family and friends.
Developing a Business Idea
If you need more ideas, read our guide to Tennessee business ideas. Once you have a few ideas, conduct some research to see whether they are practical. Consider the following factors while selecting a company idea:
- How much money will you need? Do you have funds?
- Time requirements – When will you begin selling?
- Is the industry expanding or contracting?
- Profitability – How much money can you reasonably expect to make?
- Factors of lifestyle – Running a business is difficult labor. Are you all set?
Step 2: Create a Strategy
Identify a Gap
Consider the feasibility of the company concept you have in mind before proceeding. Consider the following three questions:
- Is there room for growth in the market?
- Will your concept be beneficial to customers?
- Will it be popular?
Starting a business will involve money, therefore you must not rely solely on assumptions about the viability of your idea. Make a point of conducting your own research and asking individuals you know and trust what they think of your concept.
- Which goods and services will I offer?
- What services will I provide them with: a website, a real store/office, or both?
Get to know your competition before deciding on a pricing list. Visit the stores and websites of firms that provide similar items or services to see what they’re selling and at what costs, and use this information to guide your selection.
If you have a direct rival, you should set a competitive pricing. Calculate your break-even point, then use this profit margin calculator to calculate your mark-up and ultimate pricing point.
You should also think about how to position your goods. Will you provide a lower-cost option, a la Walmart, or will you portray your company as more high-end, a la Pottery Barn or Restoration Hardware?
Once you’ve settled on a price strategy that works for you, you’ll need to put it to the test to determine if it’s appealing to your target market.
Knowing your target market is essential for sales and marketing success. Customer profiling comes in useful here.The first step is to determine if you are selling to individuals or companies. When selecting consumers, consider who is most likely to buy by looking at:
- Age, gender, income, and geography are examples of demographics.
- Attitudes, values, interests, and tastes are examples of psychographics.
Knowing your clients will help you to design your messaging and choose where to direct your marketing efforts. For example, do your clients prefer Facebook or TikTok depending on who they are and what they like?
If you’re selling to businesses, figure out which kind of enterprises will be interested in what you’re offering initially. Next, identify the appropriate decision-maker inside these organizations — it may be a VP, an IT manager, or the head of sales — and tailor your marketing accordingly.
Step 3: Write a Business Plan
A business plan may appear to be a difficult endeavor, but it is a necessary step in starting a successful firm. The strategy will serve as a road map to guide your business through the launch process while keeping you focused on your primary objectives. A business plan also helps prospective partners and investors understand your organization and its objectives.
- Executive Summary: A brief summary of the full business plan that should be produced when the plan is completed.
- Business Overview: A description of the organization, including its vision, mission, ownership, and corporate goals.
- Product and Services: Provide detailed descriptions of your offers.
- Market Analysis: Conduct a SWOT analysis to evaluate market trends such as variances in demand and development potential.
- Analyze your top rivals’ strengths and shortcomings, then produce a list of the benefits of your services.
- Sales and marketing: Investigate your company’s unique selling propositions (USPs) and create sales, marketing, and promotional plans.
- Management Team: A description of the management team’s functions and professional backgrounds, as well as a corporate hierarchy, is provided.
- Procurement, office location, critical assets and equipment, and other logistical aspects are all part of your company’s operating strategy.
- Financial Plan: A three-year financial plan that includes initial expenses, a break-even analysis, profit and loss predictions, cash flow, and a balance sheet.
- Include any extra financial or business-related papers as an appendix.
It might be a daunting undertaking if you’ve never written a business plan before. Consider hiring a professional business plan writer to help you construct a professional business plan.
Step 3: Create a Marketing Plan
Online marketing is critical for new businesses because it allows them to reach a larger audience while also building brand awareness at a lower cost. New firms may establish their presence, attract potential clients, and compete with existing industry players with a well-planned internet marketing campaign.
Here are a few effective small company digital marketing strategies:
- Because you can generate compelling posts that sell your items on social media, it is an excellent tool for promoting your business:
- Facebook: An excellent paid advertising network that allows you to target certain demographics, such as males under the age of 50 in the Nashville region.
- Instagram has the same advantages as Facebook, but with a different target demographic. It’s an excellent platform for creative companies.
- TikTok: TikTok is a social networking platform with over 1 billion monthly active users, particularly among the younger population.
- LinkedIn is the most successful social media platform for B2B marketing.
- Google and Yelp: Getting listed on Yelp and Google My Business can be critical to creating awareness and consumers for businesses that rely on local clients.
- Send out frequent emails to consumers and prospects. Make them unique to you.
- Start a blog and post regularly. Change up your content and distribute it across numerous platforms.
- Paid social media advertisements – Select sites that will reach your target audience and run targeted ads.
- Pay-per-click marketing entails using Google AdWords to improve search engine performance. First, conduct keyword research.
- Influencer marketing entails paying individuals who have huge social media followings to promote your product/service. Micro-influencers with lesser followings and cheaper prices are available.
- Create a podcast to interact with your consumers on a more personal level.
- To capture emails, provide a free download.
- Make infographics and integrate them in your content.
- Make a video about your product or service. Use humour, and it may go viral!
- Do a webinar – Use a video seminar to share your skills online.
Increase awareness of your services and promote your brand by utilizing your website, social media presence, and in-person events.
Traditional marketing refers to any kind of marketing that reaches an audience through offline media. Among the possibilities are:
- Competitions and giveaways – Raise interest by providing prizes to consumers who accomplish a certain action.
- Install eye-catching signage at your store and on your website.
- Distribute fliers in your area and at industry gatherings.
- In-person Sales – Make your goods available at local marketplaces and trade exhibitions.
- Close more sales with less stress by cold phoning.
- Events that are related to your target market can be sponsored.
- Offer a one-time only version of your product or service.
- Seek recommendations – Provide incentives for customers to refer new clients.
- Do press releases for new items, sales, and so on.
- Billboards – Providing repeated exposure to a business message.
- Customer Testimonials – Share customer testimonials on how your product or service has benefited them.