Setting up a new business always represents some form of risk. Whether your desire is to own a niche venture selling a small selection of handmade goods, or to aim for the stars and build a multimillion-dollar corporation, getting that initial idea off the ground requires an awful lot of preparation and planning, as well as an investment of funds.
This is something that those who wish to start a stock brokerage firm must be acutely aware of. While it’s entirely possible to make a success of such a venture, there is much that you must do and learn before this is possible, which is why we’ve created this brief guide to help you.
Designed to outline just a few of the key steps you’ll need to take, we hope you’ll find it useful.
Step #1: Educate Yourself
Before you begin any business, it’s important to gain a complete and comprehensive understanding of the industry you’re hoping to break into. This means that you must learn as much as possible about the stockbroking sector, from the most basic facets of trading to the most intricate. This is not the sort of knowledge that can be gained in a day or even a month – it’s a long and complex process that you must be willing to commit to. Alternatively, one way to speed this up is to go into business with a partner who already has such an understanding as, with the right people around you, almost anything is possible.
Step #2: Plan it Out
Once you have a working knowledge of the sector and believe your understanding is sufficient to put in place a strong business plan, it’s important to decide what sort of broker service you would like to offer. This is not something that any sort of generic advice can help you to decide, so consider your options with care before committing. You might find that, at least in the early days, it’s a good idea to try day trading yourself, as many brokers use this as an additional source of income. Trading online is one way to get set up, via a platform such as eToro. This will allow you to buy stocks and get a better initial feel for how the industry operates and how the markets fluctuate.
Step #3: Invest in a Workspace
With a plan in motion, your next step is to invest in a suitable office space. How big this will need to be, or where it should be located, will be dependent upon the specifics of your strategy, but make sure that you’re accessible to those who will need to visit you, and that you have sufficient room for your employees plus any planned expansions. A property that meets your company’s needs will be key.
Step #4: Legalize your Business
Once you have a suitable space in mind and a strong plan of action, it’s time to take care of the legalities. This can seem difficult and onerous on the surface but, with the right lawyers to help you, it shouldn’t prove overly challenging. As a rule, you’ll need to apply for the correct permit to run your business, and may also be required to have two sufficiently experienced managers in place before this can be granted.
Step #5: Carry out Competitor Analysis
With each of these boxes ticked, the final step is to perform some in-depth competitor analysis before you fully take the plunge. This is because your business will need to be able to rival the competition in order to thrive, so use these other companies as a case study for success. Watch them, learn from them, and use them as a model of how to run a successful stock brokerage of your own.
Tell us, are you tempted to give it a go?