How to Start a Business
Starting a new business is as exhilarating as it is intimidating. Armed with an excellent new business idea, many new entrepreneurs have trouble identifying what actionable steps must be taken to turn their idea into an official, viable business.
Luckily, there are many public and private organizations that offer support, including the Small Business Association, which recommends these 10 steps to get your business off the ground:
10 Simple Step Guide to Starting a Business
1. Conduct Market Research
Doing some up-front research is an important step to validate your idea. Since starting a new company is a lot of time, effort, and financial investment, it’s very important to make sure the idea is worth pursuing in the first place.
Speak with friends and relatives about your idea and ask for sincere and honest feedback, and conducting in-depth interviews about their experiences and how your business may be able to solve them.
Furthermore, conducting anonymous surveys or questionnaires that target your future customers to get valuable insight as to the viability of your business idea.
2. Write Your Business Plan
Your business plan is the foundation of your business. It documents the specific problems you’ll solve for customers, and the activities your company will conduct in order to do so, what products and services you’ll offer to them, and what marketing activities you’ll perform in order to communicate to them that you can help them.
It describes what your mission and vision are that shapes the ways you’ll make strategic decisions in the future. It analyzes industry trends and how these trends will impact the future of your business and your customers. Furthermore, it provides an in-depth analysis of your finances in both the near-term and long-term horizons. You may find these business plan sample helpful.
3. Fund Your Business
As the old adage goes “you have to spend money to make money” and for larger business ventures, you may not be able to afford all of the up-front costs required to get your business off the ground and profitable.
Fortunately, there are a plethora of ways to fund your business, be it bank loans, friends and family members, strategic business partners, crowdfunding, or venture capital.
With all these decisions, it’s important to evaluate your options and the pros and cons of each potential source of funding in order to ensure all stakeholders are rewarded appropriately. You may find helpful this investor business plan to fund your business.
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4. Pick Your Business Location
Your company’s physical location is an important component that may impact your ability to hire workers, visibility to the surrounding community (including any traffic that may pass by your headquarters), and even what business permits you to need and tax implications for your operations.
Choosing one location over another may award you local, state, and/or federal government incentives that could provide important strategic advantages over competitors.
In addition to your physical location, any online operations that your business conducts will have “virtual locations” as well, such as your company’s website URL, any social media platforms that your company maintains, and any other digital registries that highlight your business.
5. Choose a Legal Structure
There are several different businesses or organizational legal structures that may impact your operations. This can affect how much you pay in taxes, the ability to raise money through investors, the legal paperwork you need to file, and even your personal liability.
You’ll need to choose your business structure before registering your business, so it may be helpful to speak with a business counselor, attorney, or accountant to understand your options.
6. Choose Your Business Name
It’s not easy to pick the perfect name – after all, it’s the very basis of your company’s identity! A good name should be short, easy for your customers to remember, and of course not already be taken by another company. Check with your Secretary of State to make sure your business name isn’t already taken.
Some other things to consider would be registered trademarks that could be confused with your company name, website URLs, or social media accounts that customers may confuse with yours.
7. Register Your Business
After you’ve picked the perfect business name, it’s time to register your company to protect your brand. For most small businesses, registering your business is as simple as registering the business name with your state and local governments. In other cases, you may need to register with the federal government.
8. Get Federal and State Tax IDs
Your Employer Identification Number (EIN) is an important step to starting a business because it allows you to open a business bank account and pay company taxes. It’s almost like a Social Security Number for your company. Some states may also require a State ID number as well.
9. Apply for Licenses and Permits
Staying legally compliant is essential for your company to run smoothly. The licenses and permits you need will depend on your incorporation status, your industry, and will be different depending on the state, county, city, and even area of town in which you’re operating.
Visit the Small Business Association website for more details on which licenses and permits you may need.
10. Open a Business Bank Account
Once you’ve obtained your EIN, you can open your business bank account. In fact, the business account should be opened as soon as you start accepting or spending money on your business. Common business accounts include a checking account, savings account, credit card account, and a merchant services account.
A Business Bank Account is important to get several benefits including liability protection, a line of credit for the company, more purchasing power, and last but not least a professional platform to receive payments and pay customers.
While these steps may seem daunting, remember that there are many resources that can help you in starting a business. Check out the resources at the Small Business Association or send us a message if you have any questions!