Steps to Start Your Business
Find a Business Idea
Write Business Plan
Choose a Business Name
Do the Market Research
Choose a Business Structure
Get Fed & State tax ID numbers
Obtain a License & Permits
Open a Bank Account
Get Business Insurance
Select your Tools & Software
Hire Staff & Employees
Market your Business
Create a Website or Online Store
Promote you Business
Starting a Business can significantly impact your life and the lives of those around you. These 15 time-tested steps on how to start a business -whether it’s your 1st or your 10th time – will help you with everything from finding & validating your money-making idea to figuring out your launching strategy your product or service. This Checklist guide is for entrepreneurs who want to make sure they get all the steps of starting a new business.
1. Find a Business Idea
The first step in starting a business is figuring out what you want it to be. Finding small business ideas is a task you can approach systematically by relying on time-tested approaches that have worked for other entrepreneurs.
2. Write your Business Plan
Writing a Business Plan helps you formalize your idea and can streamline the business-creation process by getting you to sit down and think things through methodically. Having a firm grasp of your “known unknowns” is important because all it means is that you’re actively not prioritizing finding a solution right now; that’s a lot better than being unprepared or caught off guard, especially if you struggle to answer these questions while seeking funding.
Business Plan Outline
Company name and description
Management & organization
Products and/or services
Logistics & operations plan
Next Step: For inspiration, it can be helpful to look at some Business Plan examples to kick things off. If you’re interested in writing a plan but turned off by boring paperwork, we’ve developed a free business plan Template that you’ll actually use. (go to Shopify)
3. Choose a Business Name
For starters, your name is a universal facet of your marketing—it shows up everywhere you do. Keep things simple & focused: 1) find a name that makes it clear what you do, 2) that’s short & memorable, and 3) that aligns with your Mission & Vision. This isn’t an effortless task, but it’s very achievable with a bit of ingenuity.
Business Name Generator . . .
will help you come up with an initial set of ideas for a name. The rest is up to you. What do you like? Test it out with a few of your friends – to see if it makes sense to them. Then go with what your intuition tells you.
4. Conduct Market Research
One of the best ways to start a business is to conduct a market analysis. The goal of market research is to better understand your Target Market & Competitors – in order to create an effective business plan.
What’s the potential opportunity size?
Entrepreneurs are often too dismissive of small markets. Yes, the market size should match your ambitions for the business, but the opportunity size of a specific niche is determined by a few other dimensions. For example, if a product category has relatively few active customers, but the price of the product is relatively high and requires re-purchase, that’s an attractive opportunity that founders focused on market size might miss.
Who’s your Competition?
What does the competitive landscape look like for your Target Market? Are there many competitors, or very few? If there are a lot of competing businesses in your niche, it’s often a sign that the market is well-established. That’s good for ensuring demand exists, but it will also require you to differentiate what you offer (to some degree) in order to attract customer attention & build market share. Can you be Better, Faster, Cheaper?
What are your Strengths, Weakness? Is the Opportunity worth the risk? What are the Risks & Rewards? What are the Threats to this Opportunity? Once you’ve performed this SWOT Analysis, you’ll be better able to determine your possibilities and your probability of success.
Who is your Target Audience?
A Target Audience is a group of people you plan to sell your products and/or services to. Understanding your Target Audience makes it easier to find new customers and bring interested buyers to your website. From higher engagement on your social media channels to a greater ROI for your ads, defining your buyer personas of the Target Audience upfront can help you succeed.
5. Secure Financing
Your business plan will help determine how much money you’ll need to get up and running.
Common ways to Fund your Startup
· Business Loans
If you have a good personal credit history and need startup financing, a business loan from a lender could be a good idea.
· Business Grants
Grants are often given to target businesses based on a variety of factors including, veteran-owned, minority-owned, specific for-profit, women-run, and more.
· Shopify Capital
You potentially can receive financing that helps approved merchants get the funds they need, without lengthy bank approvals or giving up part of their company.
If you don’t want to go the traditional funding route, you could always crowd-source funds from a group of people online.
· Personal Investors
Startups also fund their companies through VC’s or Angel Investors, or friends & family in the early stages.
6. Choose a Business Structure
Choosing the right structure is about balancing the legal & financial protection you need with the flexibility offered by different options. It’s an important decision, and it’s one you should consider carefully before you launch your business.
Business structures vary based on your country, state & local area, but common types—that may go by different names in your country—are Sole Proprietorship, Limited Liability company (LLC) & Corporation.
a) Sole Proprietorship . . .
is great if you’re the only person involved in the business, and is usually the lowest-effort structure to pursue, but it leaves you personally liable for the business & its activities. You can hire employees as a sole proprietor, but you’ll need an employer ID number to do so, which means registering your business entity.
b Limited Liability corporation (LLC) . .
is a common type of small business entity in the US. It provides liability protection for the business owner(s), so you are not financially responsible – if legal claims are brought against your business. An LLC can be formed by one or more owners.
c) Corporation . . .
is a business structure where owners are taxed separately from the entity. Shareholders own the business and each has a fractional share of the company. The benefits of a C corp are normally enjoyed by large, multi-national corporations, like Walmart & eBay. However, they can be leveraged by small businesses that want to get investment by issuing stock.
Legal structure factors
· Where is your business located
Your country’s laws will outline the different structures you can form and whether or not you need a business license to get started.
· What kind of Business are you starting
Some structures are more suited to businesses of a certain scale or within a certain industry. There might come a time when you need to restructure in order to work with new partners. It’s not uncommon for large businesses to ask that their suppliers or partners be incorporated, for example.
· How many people are involved
If you’re going it alone as a solo founder, you may be able to look at streamlined options. If you have a business partner or multiple people with ownership in the company, you’ll need to look at more advanced options to ensure everything is set up and shared properly.
Next Step: An accountant or lawyer can be helpful in evaluating the different options available in your area and with the process of setting up a business.
7. Get Federal & State Tax ID Numbers
Federal tax ID (EIN)
A federal tax ID, also called an employer identification number, or EIN, is a nine-digit number the IRS assigns to businesses and organizations for tax purposes. Think of it as your business’s Social Security number.
You’ll need an EIN if . . .
- Your business has any employees other than yourself
- Your business is incorporated
- You have any partners in your business (i.e., it is a multi-member LLC)
- You take over an existing business either through purchase or inheritance
- You have a retirement plan for self-employed individuals (like a keogh plan) or solo 401(k) retirement plan
- You want to open a business bank account (Not all banks require an EIN, but most do.)
Having an EIN will
- Help you when you file taxes
- Protect you legally
- Help protect your personal information
- Help you establish credit
Next Step: The application process to get an EIN is simple. You can just go to the IRS website and fill out an Application online. Then the IRS will conduct a compliance review and, once you’ve been accepted, will send you your EIN paperwork either in the mail or to your email inbox as a PDF.
State Tax ID
A state tax ID is separate from your EIN. An EIN is assigned by the federal IRS, while a state tax ID is assigned by your state. A state tax ID has a similar purpose to an EIN in that it helps your business comply with state laws. However, each state has different requirements, regulations, and even tax laws. So you’ll have to research your individual state’s laws to see whether your business will need a state tax ID.
Laws vary from state to state. A good place to start is your state’s taxation department, department of treasury, or secretary of state. Get in touch with them to find out any state tax ID requirements you may need.
8. Obtain a Business License & Permits
Once you understand how to start a business, look into what licenses and government regulations you need to operate legally. No one wants to end up in legal trouble. Your business is subject to the laws governing businesses in your area, as well as laws and regulations specific to your industry. For instance, a food service business needs to follow specific licensing and regulations for handling what it sells, but it also has to pay attention to the legalities of its marketing efforts and to trademark and copyright laws.
With so much to know, and a lot of it specific to your location and industry, it’s worth consulting with a lawyer to get advice before you launch your business. Investing time and money upfront to obtain legal advice can save you from considerable headaches down the road.
9. Open a Business Bank Account
To make managing your finances far easier, take the time to open a business bank account and obtain a business Credit Card. Keeping your personal and professional finances separate makes doing your taxes much simpler and can help you automate some of the financial steps to starting a business as well. Doing this will be especially helpful if you want to know how to start with no money.
10. Get Business Insurance
Business insurance helps protect your business and personal assets from anything that could go wrong. Every state has different laws and requirements when it comes to insurance, but even if your state doesn’t require it, it’s always a good idea to give yourself and your business extra protection.
Common types of Business Insurance
· Liability insurance
Covers your business for any legal actions due to accidents, injuries, or negligence.
· Commercial property insurance
Will help your business if any property is damaged or destroyed due to fire, storm, or theft. It will help pay to repair or replace property, inventory, and equipment.
· Commercial auto insurance
Will cover any damage caused to or by any vehicles you use for your business. (i.e., delivery vehicles, moving trucks, forklifts, etc.). It will pay for medical expenses, legal bills, and property damage, should one of your vehicles be the cause of an accident.
· Workers’ compensation insurance
Pays for the medical care and lost wages of any employees who are injured on the job. Most states require employers to have some sort of workers’ compensation insurance based on how many employees a business employs.
· Professional liability insurance
Protects people who are in service-related jobs. It protects them from liability for negligence or malpractice (for example, estheticians, hair stylists, bartenders, etc.). It is also known as errors and omissions insurance.
· Product liability insurance
Protects manufacturers, wholesalers, distributors, and retailers. It protects them from liability if a product they make or sell turns out to be unsafe and injures someone.
· Business interruption insurance
Will cover the operating costs if it has to shut down or move (for example, because of a fire or hurricane). It will cover the cost of relocation, paying employees, and paying rent.
· Cyber liability insurance
Provides liability coverage to businesses that suffer a data breach. Depending on the insurance, it can also cover the cost of letting your customers know about the data breach, as well as providing services to customers who are victims of identity theft because of a said data breach.
· Umbrella insurance
(for Rain Damage & Flooding) No, it gives you extra coverage to help pay for anything that may have exceeded your policy limits on other types of insurance.
To help you decide on what insurance you may need, you need to understand the risks of the industry you’re in. So do some research and assess the risks involved with the business you’re starting.
Shop Around. After you’ve found the types of insurance your business needs, shop around. There are a lot of companies offering all kinds of insurance. If you find it overwhelming, it’s a good idea to go through a reputable licensed agent. A commercial insurance agent will help you find policies that match the needs of your business and your price point.
These agents receive commissions from the insurance companies when they sell policies, so make sure to find one that is actually interested in helping you find what you need. Make sure to re-assess as your business grows. (ie, annually) As your needs change, you’ll likely have a need to update your policies as well.
11. Select your Software Tools
Taking the steps to start a business means having more to do than reasonably can be done. That’s why small business owners shouldn’t under-estimate the value of good software—it’s one of the best ways to reduce the heavy lifting involved in running a business. (ie, Quick Books, MRP or ERP system)
Are there repetitive tasks in that list that don’t require much decision making? Software is perfect for streamlining or automating that sort of work. You can also deploy software early to support some of your marketing and sales work. While there’s a genuine risk of getting distracted with excess tools, there’s a portion of marketing that will benefit from automation from day one.
Software to help you manage
With numerous options to help you track everything from a meal with your business partner to a big inventory order, accounting software is one of the best ways to start your business off on the right financial foot.
· Email marketing
Most businesses will benefit from setting up cart abandonment and welcome email sequences even before they’ve made their first sale. An email list is one of the few things, alongside your online store, that you truly own on the internet. It provides a direct line to your customers that isn’t dependent on third-party algorithms.
Paying for ads is a cost of doing business, especially online, but there’s marketing software that can help streamline the process and make the most of your advertising budget—no matter how much you have to spend. Track your campaigns, but if you plan on scaling your paid advertising, it’s smart to familiarize yourself with their individual platforms.
· Project Management
Even if you’re a sole proprietor, having one place to plan your work and keep track of important tasks can help you stay on schedule. Tools like Trello and Asana can help you keep your finger on the pulse, and connective apps like Zapier are great for stitching together and automating your most common workflows.
11. Hire Your Team
Now that you know how to start your own business, it’s time to dive into getting & growing the people that will run it. How much work will you need to do, and what skills will be required to launch your business? These are fundamental questions you’ll need to answer, because they’ll guide both your timeline and your level of investment in your launch.
If you plan to do all of the work yourself, you’re limited by the time you have available to find & qualify staff. If you plan on hiring help, you’ll need to account for those costs—as well as the time involved in finding & on-boarding freelancers or employees.
Roles you may need to hire
- Production or Service Manager to manage the P/S operations
- Quality: to verify the Quality of Products and/or Services
- Customer Service: to solve customer problems
- Sales & Marketing: to plan and write material for email, website, and other Mktg campaigns
- Social media manager: to create buzz and grow your social presence
- Admin & Accounting
13. now Market your Business
Create a Marketing plan
As you near your launch date, you should plan time to create a Marketing Plan that can help you promote your business and sell more products and services. This document can go a long way toward helping your business find an audience, grow your customer base, and keep your promotional efforts on track over time.
Marketing Plans usually include:
- An Executive summary that summarizes your overall plan
- A Mission statement that outlines your overarching goals and business philosophy
- Objectives that detail the specific things you want the company to achieve
- SWOT Analysis: Strengths, Weaknesses, Opportunities, & Threats that helps identify what you’re doing right and what needs to be refined
- Market Research that helps you understand your industry, potential customers, and competitors
- A Budget that keeps your finances under control
Brand your business
Building a brand from scratch is no easy task, but critical to stand out in a sea of competition. A brand is more than just your logo and name, it’s how people perceive you whenever they interact with your business.
Common elements of Branding include:
· Brand Logo
A symbol made up of text and images that identifies your business. An effective logo expresses your values and communicates what you do.
· Company Colors & fonts
Your colors, logo, and font play a role in your visual identity. Visuals tie into human emotions and can help reinforce your position and brand experience.
· Voice, tone, and messaging
A consistent and recognizable voice across all your touch points makes your brand sound more human and helps connect with your audience on a personal level.
· Brand positioning:
A brand position makes it clear who you serve. It communicates to your target audience why you are the best choice for them and what makes your products different.
14. Create a Website or Online Store
Starting Website or Online Store will be both rewarding & profitable when done right. Having an online presence will gain credibility with potential customers and make it easy for them to access your business, versus going to a physical store.
Choose a Website builder or eCommerce platform that allows you to easily manage all the critical tasks involved in running your business. Look for a theme that supports your product lines and gives you the ability to take and manage orders easily.
15. Promote your Business
At this point, you know everything there is to know about how to start a business. The preparation you’ve already done has laid a solid foundation to support your launch, so you can focus on marketing activities and making your first sale. However, a plan of attack, especially as you’re trying to build traction, can help make your launch even more successful.
How to boost a Business’s first few days of sales:
· Use your Network
Promote your Business first and foremost on free channels that are already available to you, which includes your personal Social Media and your Contacts list. Sending one-on-one emails asking for support, which can be as simple as a social share, can go a long way toward gaining traction.
· Offering Discounts
Rewarding early customers with a Discount code that fits with your profit margins can help you get traction early on, especially when your business is new and may not have many customer reviews or social proof points.
· Paid Ads
Even if you start with a small budget, Paid Ads can be one of the most effective ways to get in front of your ideal audience. Testing early and modifying your results can help you drive your first few sales and optimize your ad performance as you scale.
Comments: Do you know any other significant Steps to Start a Business?
from Shopify 4/22 enhanced by Peter/CXO Wiz4.biz
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