I’ve been asked quite a few times over the years how to start a business. There are so many steps involved, and it’s overwhelming, especially when you’re first starting out. So I thought I’d put together this simple guide to help you get started and keep you on track!
1. Define your product or service.
You need to know what you are selling. You also need to know your market and competition. Here are some examples:
- A product–a pair of sunglasses, a book, an iPhone case
- A service–a haircut, a massage, a trip to the spa
- Your market could be sports fans or people who like different types of music. Your competitors might be other sellers on Amazon or Walmart that sell similar products for lower prices. As long as you have an idea of your target audience, then it will be easier for you to find out what steps need to be taken in order for success with this business venture!
2. Choose your business name.
Choosing a company name is one of the most important decisions you’ll make in starting your business. A good company name can reflect your brand and help establish credibility with potential customers. It also shows that you put thought into finding an appropriate moniker for your endeavor, which will make people more likely to trust you as a business owner and customer.
To choose a strong name for your organization, keep these tips in mind:
- Keep it simple—Choose something easy to remember and pronounce. You may have heard of companies that have chosen names like [Company Name] or [Company Name]. While these might seem clever at first glance, they aren’t always practical when trying to build customer loyalty because they’re difficult for many people who don’t speak English well (or even those who do!).
- Avoid numbers or punctuation marks—Avoid using numbers or other punctuation marks unless they are part of the actual words (for example, “The Apple Store). This makes it easier on customers who need help pronouncing them correctly before placing orders over the phone or online channels such as Slack or Facebook Messenger conversations so that there aren’t any misunderstandings between yourself and others involved in making sure business transactions go smoothly!
3. Define your brand.
You need to have a clear understanding of what makes your business stand out from the rest. To define your brand, you can create a mission statement, determine your target audience, and describe the company values that are important to you and the organization. It is also helpful to tell a story about how customers will be happier because of what you offer them. You may want to consider creating a tagline for your business as well as visual identity guidelines that will help people recognize it in their community or on social media platforms such as Facebook or Instagram.*
4. Write a business plan.
A business plan is a document that helps you define your business and what it will accomplish. It’s also a sales tool to help attract investors, partners, or customers. A good business plan should include:
- An executive summary that describes your company and its goals for the future
- A description of the products or services you’ll offer
- A market analysis of how much demand there is for what you’re selling, as well as any competitors in the area
- Your strategy for getting customers to buy from you; this may involve advertising or word-of-mouth marketing campaigns, among other things
- Management information about who will run the company (if it doesn’t already have employees) and what they expect out of their roles
5. Fund your business.
Once you’ve got the idea, it’s time to start your business. The most popular way to fund a new venture is by bootstrapping—self-funding using your own resources.
Bootstrapping can be more cost effective than seeking outside funding, but if you decide to go for outside investment at some point in time, here are some options:
- Investors may be willing to offer financial assistance in exchange for an equity stake in the company. Find out more about investing in startups from our guide on how to raise funding for a small business.
- Many banks have loan programs that help small businesses get started by providing working capital and/or financing for equipment purchases or other needs. You’ll need solid financials and well-defined plans before approaching banks with loan requests; see how this angel investor created his own lending program instead of waiting around on the bank’s timetable!
- Grants provide funds without giving up any ownership or equity (although they might require repayment after certain milestones are met). Grants often come from government agencies or private foundations; find out how much money was raised through crowdfunding!
6. Choose a business structure.
Once you’ve identified your idea, it’s time to decide how you’re going to structure your business. There are many options available, and not all of them are right for every business. Here’s a quick overview of the major types:
- Sole proprietorship: A sole proprietor is an individual who owns (and thus, the business is owned) by himself or herself.
- Partnership: Partnerships are similar to sole proprietorships but with two or more people sharing ownership in the company.
- Limited liability company (LLC): In this structure, members have limited personal liability for debts and obligations incurred by the LLC while they own it; however, they also have fewer tax benefits than corporations do. The IRS classifies LLCs as pass-through entities taxed at individual rates like partnerships and S corporations rather than corporate income tax rates which most C corporations pay on their profits before distributing them to shareholders as dividends subject to taxation again when received by them as ordinary income.
7. Register your business.
You can register your business with the government by completing a registration form and submitting it to the local business registry office. You will be required to submit proof of your identity, along with any other information requested on the form. Once you have completed this process, you’ll receive an official certificate that confirms that you are indeed in fact running a business.
The fee for registering your company depends on its size, but they’re usually relatively inexpensive. Most registration offices accept credit cards as well as cash, so you don’t need to take out a loan if you don’t want to!
Get federal and state tax IDs.
The first step in starting your business is getting federal and state tax IDs. To do this, you’ll need to visit the IRS website and fill out an online application for an employer identification number (EIN). An EIN is a unique nine-digit identification number that will be used by your company when filing taxes, so it’s not something you want to get wrong. The good news: the application process is relatively straightforward and only takes about 10 minutes. You can also apply for a state tax ID at the same time as your federal one if needed.
The cost of obtaining either type of ID varies depending on where you live; there are specific fees associated with each state or city’s entry regulations as well as processing costs charged by companies like TurboTax or H&R Block (which also offer free options). If possible, find out how much these processes might cost ahead of time so that once everything else has been set up—such as finding office space or buying equipment—you won’t be hit with unexpected expenses later on down the line.
8. Open a business bank account.
Opening a business bank account is one of the first things you’ll have to do once your company is officially registered. The best way to find the right bank for your business is by looking at its financial products and services, such as payment options, overdraft protection and credit card access. You should also look at its customer service record, especially if something goes wrong with your account.
- Look for free or low-cost banking: When choosing a bank for your business, consider whether it offers any free or low-cost services. For example, some banks offer fee waivers on certain transactions if they’re done using an ATMs located within their network of branches (and not those belonging to rival institutions). This can save you money over time because each ATM transaction costs money—typically $2-$3 per use—and it may be cheaper than going into the branch itself (which may also incur additional fees).
- Look for mobile apps or online banking: Many people prefer using mobile apps when managing their finances because they’re convenient and easy-to-use compared with traditional methods such as going down into the branch every time you need something done quickly like getting cash sent over electronically instead of waiting in line behind everyone else who wants immediate assistance.”
9. Set up business accounting.
If you’re starting a new business and want to keep your personal finances separate from your business accounts, you’ll need to set up an accounting system. Your first step is to choose an accounting software program that works for you. Some popular choices include QuickBooks Online and Sage 50 Accounting.
Once you’ve selected the right software program, it’s time to create an accounting calendar and checklist. The calendar will help keep track of deadlines for taxes, payroll, invoices and more. The checklist will ensure that every aspect of running your business is accounted for in your bookkeeping system so that everything goes smoothly from year-to-year.
10. Create a website.
A website is an important way to communicate with customers and clients, so you should make sure you have a good one.
In order to find a good web designer, it’s important to know what qualities make for a good website. A great site should be easy-to-use and straightforward; it should also look professional and feel trustworthy. Your prospective designer will need to understand your business goals and objectives before they can design the perfect site for your needs (and budget).
A great web host will help keep your site secure and running smoothly over time. You want someone who knows what they are doing—a domain name registrar or hosting provider that is constantly upgrading their servers in response to emerging threats can provide peace of mind during this uncertain time period as well as years down the road as technology evolves further into 2023 or beyond!
A good plan is key to starting a successful business
As you start to move forward with your business, a good plan is key. A well-written business plan will help you stay focused and on track for success. The plan should include a business name, market analysis, SWOT analysis, financial plan and more—even details like what type of website you have in mind or whether you see yourself hosting workshops in person or online. You’ll also need to take into account what kind of legal structure fits best for your needs (LLC? Partnership?).
Starting out can feel overwhelming sometimes—but don’t worry! Here are some tips on how to get started:
- Write down your goals and priorities so that they’re clear in your mind
- If possible find someone who has experience with running their own businesses so they can give advice when needed
I’ve given you a lot of information in this post—but if you read through it all, I hope you’re feeling confident and ready to get started. Starting a business takes a lot of work, but the reward is worth it when your company begins to take off. Follow these steps carefully and don’t rush: with careful planning, your dream of being an entrepreneur can come true.
And of course, there is more to it, but you must start today and not wait. Because the learning is in the doing, as well as the research.