Planning to start a business?
You’ve come to the right place!
Most people want the freedom and financial rewards of having their own business. But, it is not the same as “if you build it, it will work” situation.
To start a company and to market a business, you’ll need to create a powerful business plan, complete all the legitimate paperwork, calculate your finances, choose your partners, research applications for startups progress, and choose the tools to help you get your marketing and sales off the ground.
Entrepreneurship is an idea that most people get attracted to, however, figuring out how to start a business can sometimes be overwhelming.
You should know that you will never be 100% ready, just start and you’ll gradually get the knowledge and experience you need throughout the journey.
What's on This Page
- What's on This Page
- Why Start a Business?
- How to Start a Business?
- 1. Find a Business Idea
- 2. Market Research
- 3. Create A Business Plan
- 4. Business Plan Templates
- 5. Fund The Business
- 6. Determine Business Legal Structure
- 7. Register Your Business Name
- 8. Apply for Licenses and Permits
- 9. Obtain Insurance to Start a Business
- 10. Open A Business Bank Account
- 11. Review Business Tax Requirements
- 12. Create Products and Services
- 13. Build a Website for Your Business
- 14. Market Your Business
- 15. Hiring the right employees
In this article, we have shared all the important steps to start a business. We have also included the best tools and resources to help you begin the marketing and sales, complete the paperwork, and set a budget to create your business plan and grow online.
Why Start a Business?
There are many reasons people start a business, some of them are:
Having your own business can generate unlimited income based on your efforts and performance. Unlike working for someone else where your income is limited to a fixed salary that might be way less than you really deserve.
Pursuing a passion
You can choose to follow your passion by being a part of the industry you really like and do the things that make you happy.
Most people prefer to work on something they deeply care about and it makes them more creative and productive.
Fulfilling a life purpose
Have you ever felt that your life is meaningless because you don’t have something valuable to live for? Having your own business can change that.
Elon Musk’s purpose is to accelerate the world’s transition to sustainable energy. It’s what keeps him working relentlessly and standing up again and again after taking hits.
Maybe you should start a vegan meal delivery business that will help to save the planet, to stop torturing poor animals, and to drastically boost people’s health and protect them from many types of diseases.
How to Start a Business?
A business plan is an active document that plots out the details of your business. It covers how it will be structured, what it will sell, how will the market look like, how you plan and organize your product or service, what capital you’ll need, and which permits, agreements, and other documentation will be required.
In general, a business plan helps you to prove yourself in front of others whether your business idea is worth pursuing or not. It’s the best way to take a step back, look at your opinion, and solve the issues left years before.
Now, let’s dive in and start with some tips to start a business.
1. Find a Business Idea
For some people, coming up with ideas is as easy as making a cup of tea. While it’s pretty difficult for others. An easy and common way to find a unique business idea is to find out how to solve a problem many people have.
For example, creating an eCommerce website that sells rare items that people would struggle to find elsewhere. Or creating an online course that teaches people a valuable and in-demand skill that massively pays off. So all you really need is to get good at identifying problems and craft profitable solutions.
Your business idea doesn’t have to be a revolutionary one, it can be a simple one that already exists, but with better application and marketing, you can secure yourself a big piece of the pie.
What Type of Business to Start?
Once you get a tint of ideas to start a business, now think about what type of business you would like to start. Are you passionate about a particular niche? Are you looking for a partner or start it with yourself? The main point is to research and answer as many questions you would like for refinement.
You can start figuring out with the list you are fond of like dogs, yoga, meditation, movies, food, fashion, etc. or start with Shopify store to own a freelancing business.
Use a tool like Google Keyword Planner or Google Trends to search the volume of the lists on Google. This will help you understand what type of ideas are trending, which niches are stable for the long term and which are facing ups and downs.
Now, after that, make a list of the popular niches and think which one will be helpful in creating products and services that will benefit your audience and, of course, yourself.
2. Market Research
It is the process of collecting information about your business’s target customers to determine how practical and successful your product or service would be among them. It also tells you about the main providers who sell the same or similar products and services, what’s your audience needs, etc.
You should ask and be able to answer questions like, who are your competitors, what are the needs and requirements of your customers, who are fulfilling those requirements other than you?
In the initial phase, you will need to breakdown the easiest way to start a business, the budget to run it, analyze the industry’s performance, and find out your best relevant skills and resources to grow your business.
Once all the information is gathered, pile them up into a list, and focus on how to convert these ideas into profitable business actions.
3. Create A Business Plan
The business never turns out to be what you have exactly thought of. You will always discover hurdles, whether it’s cash, productivity, or people. The business plan should not be of 100 pages, it should be short and precise.
Before creating a business plan, identify what will make your business unique from others. For example, if you’re thinking of starting a restaurant, decide whether you want to have the best recipes, lowest prices, coolest designs, or the best location in town.
You are not just selling products, you are selling a mixture of brand experience, value, and product. Besides that, business plans should be concise and easy to understand. You should write and answer questions about your business that will help you to understand the concept of it, the type of products and services you will sell, and challenges you might encounter during the setup. Let us see how you can write an effective plan.
It summarizes the key points of the document for the readers and it includes:
- An overview (the company’s activity, its location, what and to whom you will sell),
- Company profile (explaining the company’s structure, who you will hire, who is the owner and what experience do you have)
- Products, services, and market (explaining what you will sell and your findings from the market analysis)
In brief, it’s the company’s plan of how it will generate revenue, what products and services the company will sell, which market the company is targeting, and the expected financing sources, expenses, and profits.
Think out of an ideal market to sell your products, it will show how successful your business will be. Analyze the market to identify what customers really want by doing surveys and conducting interviews.
Go into details about what products you are selling and the benefits it will provide to your customers. Start by explaining what the products will serve and how they will fit into the customer’s needs. Also, explain with a proof how your products are better than those of the competitors.
Explain the company’s management structure, who will be handling the tasks and responsibilities, how the tasks will be distributed to each team or person. Briefly highlight the bios of each team member, including their prior experiences.
That’s the part where you can plan out how you will sell the services. This can be achieved by doing a complete market analysis. For marketing, think about how you will grow the business, how you will interact with customers, or how you will focus on the product distribution? For sales, see what will be your sales strategy, how your sales team will look like, and how to boost the sales rapidly?
It includes the initial startup cost, projection of future revenues, and fund requests if you are looking for an investor. All these costs include the resources you will need to start a business, space for accommodation, hardware products like computers, phones, etc.
4. Business Plan Templates
From the day you begin your business until where you make a steady profit, you have to finance the operations and growth. A few founders can fund their business completely on their own dime or through loved ones, which is classified as “bootstrapping.”
This clearly gives the entrepreneurs a huge amount of flexibility for maintaining the business, although it implies taking on a bigger financial risk.
With this, you may decide to finance your business in several ways. You may contact loved ones, seek debts in the form of business loans, or even work with a speculator. Beneath, we’ll explain the fundamentals of different financing alternatives you might need to consider.
In the early stages of your business, you may request funds from some investors in exchange for giving them equity shares in the company. That’s called seed financing.
Try to convince a bank, community development organization, or a lender to fund your business if you have a strong plan for how you will spend the funds. This type of loan includes a loan for equipment, real estate, bank loans, etc.
It is a new method of funding a business in which you get funds from the fans and customers who want to support the business idea, but they don’t own your business. You can also ask for donations if you are a non-profit business.
6. Determine Business Legal Structure
Before you register your company, decide what type of unit it is. Your business structure officially affects everything from your personal liability to how you file your taxes if something goes incorrect.
If you own the whole business yourself and plan to be responsible for all obligations and debts, then you can register for a sole trader (warning: this option can directly affect your personal credit).
At last, it is up to you to determine which type of unit is best for your current needs and future business goals. So, it’s better to discuss the idea with a legal or business advisor.
What is it? Sole trading is a business that is possessed and run by one individual, where the administration makes no legal differentiation between the individual who claims the business and the business itself.
It’s the most straightforward approach to control the business. You don’t need to name your business something besides your own or with your own name, however, if you need to do so, you can give it its own distinct name by enrolling it as Doing Business Name (DBA).
Example: Small businesses like a single person art studio, freelancer, a local grocery, etc.
- Affordable and easy to start as there is only one owner that has complete control over all business decisions.
- Tax preparation is also easy as it’s not taxed separately from the owner.
- Challenging to raise money and get investors or loans as there is no legal structure that promises repayment if the business fails.
- The owner is responsible for all the debts and obligations.
The individual owner claims and deals with the business and is liable for all exchanges, including obligations and liabilities.
What is it? It is a business where at least two individuals share possession, ownership, and every proprietor adds to all parts of the business as well as share the benefits and losses.
Example: Includes businesses with more than one owner, let’s say that Patricia and Williams decided to open a clothing store. The store is named the P&W store. By opening a store together, Patricia and Williams are both partners in the business.
- An inexpensive and simplified process to form a business partnership.
- It allows you to pull more resources as 2 or more people equally invest in the same business.
- Being able to split the workload with the partner.
- The loss and failure might lead to disagreement as two partners are involved in making decisions.
- Similar to sole trading, partners have complete, shared liability if the business fails.
To form an association or partnership, you need to enroll your business with your state, a procedure done through your Secretary of State’s office.
What is it? A structure that grants proprietors, partners, or investors to confine liability, yet at the same time incorporates expense and adaptability benefits related to an association. They are known as “pass-through entities” because they’re not subjected to a distinct level of tax.
- Since the owners of LLC are not responsible for any legal or financial faults of the business, so they have limited liability, making a less chance of taking a risk.
- Fewer formalities as they are simple to operate and manage than a corporation.
- More complicated than sole trading or partnership, resulting in high initial costs. Therefore, investors may hesitate to invest in LLC businesses.
LLCs have the advantage of “flow-through” tax treatment, implying that the proprietors (not the LLC) are the ones who are burdened. Having one degree of tax forced makes taxes simpler.
What is it? A structure that licenses proprietors, shareholders, or investors to limit personal liability, yet at the same time includes expense and associated with the benefits related to business.
In general, the owner has most of the rights and responsibilities than an individual, like, to enter into contracts, loan and borrow money, hire or sue employees, own assets, & pay taxes.
Examples: Famous corporations like Bank of America, MetLife, Microsoft, Toyota Motor, etc.
- Make financing easy and provides the best protection for personal assets as originators and investors are not at risk for the organization’s obligations and commitments – just the money and assets they’ve invested personally.
- More complicated, therefore, can have high administrative fees, tax, and legal requirements.
The company doesn’t get a tax deduction when it distributes profits to investors. Investors can’t deduct any loss of the enterprise, but they are also not responsible for the taxes, only on the profits they provide to investors.
S corporation structure works almost similar to a C corporation, except one thing: C corporation has 2 levels of taxation – once at the business level, and then shareholders or investors get taxed again on profits at a personal level.
However, S-corporation has to go through only one level of the taxation process, where at the corporate level, no income tax is paid.
7. Register Your Business Name
Hurry up! And start making a list to pick up a name from for establishing your business.
Register your business name with your state government if you’re using a name other than your personal name. This is done so that the government knows you’re doing business with a name other than yours.
Let’s check some of the parameters to register your business name.
8. Apply for Licenses and Permits
After registering your business name with your state government, make sure that you have applied for additional applications as well, such as licenses and permits.
If you are thinking of selling physical items such as vehicles, clothing, toys, construction materials, etc. then a permit is required. It permits you to collect sales tax from customers.
To operate and manage a business legally, it will need some form of license or permit. You can visit sba.gov to check license & permit requirements in your state.
9. Obtain Insurance to Start a Business
From the day a person begins a business, he’s vulnerable to specific risks. Indeed, even before the first employee is recruited, a business is in danger, making it essential to have the correct insurance set up. You can get business insurance information at sba.gov.
Luckily, organizations have access to a variety of insurance types to secure them against these threats. Here is a list of insurance types that a business must-have.
Also known as E & O insurance (Errors & Omissions). It covers a business against carelessness claims because of harm that results from mistakes or inability to perform. Every industry has its own set of worries that will be addressed in a tweaked policy composed for the business.
It is a must whether you have your own business space or you have rented it. This insurance covers equipment, furniture, signage, or inventory in the event of fire, theft, or storm. Destruction due to natural calamities like earthquakes or floods is not covered under this insurance. You can look for other policy for such issues.
Many people start their small businesses in their homes. This type of business is not covered by homeowner’s policies; however, before opting for this option, you can contact your insurer to add additional insurance to cover your equipment in the event of a mishap.
10. Open A Business Bank Account
It’s essential to keep business and personal costs separate, especially if you get inspected. Starting a business bank account guarantees a specific level of security for your business funds. It allows clients to pay with a credit card and make checks payable to your business and allows your business to maintain a decent record.
It’s additionally important to maintain a great record as a consumer before really beginning your business. While credit cards can help you in your organization’s initial days when income is low, the interest adds up rapidly and can without much of a stretch become overwhelming.
Your business bank account will be the place where you gather all of your funds, as well as the vault you will use for paying your bills and receiving payments from clients.
11. Review Business Tax Requirements
Entrepreneurs are committed to paying federal charges, and the measure of those expenses is dictated by the type of business you have built up. All organizations, aside from partnerships, need to file an annual income tax return.
Any business that is claimed and worked in the United States needs an Employer Identification Number (EIN), which can be applied on the IRS site. When you’re enlisted, it’s an ideal opportunity to figure out which charges you’ll be liable for.
There are 3 types of business taxes:
A Medicare tax and Social Security tax for business owners, ie. Who works for themselves.
Medicare, Social Security, and federal income taxes as you have employees in your organization.
Taxes that are related to the products and services you sell. Example: an excise tax on buses on highways.
12. Create Products and Services
After you have registered your business name, fulfilled all the tax requirements, and applied for insurance, it’s time to create and sell your products and services. There are multiple products and services you can sell to your clients and customers. This depends on the type of business niche you choose.
You can use eCommerce stores to sell and create products like jewelry, fashion, home décor, beauty, etc. You may use Oberlo, Shopify, Amazon, eBay, etc. to sell your products.
Create SAAS products if you are running a software business. Or offer coaching and tutorials if you’d like to be a consultant.
All the products created will be according to your skillset, experience, and the type of the business you are operating.
Sell Products and Services
Create a plan that will help you to sell the products. Set up a proper sales process and keep track of all your clients in one place. You can start with CRM, which acts as a database.
13. Build a Website for Your Business
Today, it’s hard to get customers without a website, whether it’s for new businesses, startups, or well-known companies. The website is the most important part of your business and marketing strategy. Promoting business online or on social media platforms will help you to radically generate more sales.
People mainly recognize you through your brand, so create a website that focusses on it, and users will understand who you are and what your brand is about.
Choose templates and themes to build a website that becomes the voice of your business. Use the following suggestions to achieve all your plans for a successful website.
Finally, publish your website and see the changes reflected in your business. You can modify, update, or add new content to your website any time after publishing it.
14. Market Your Business
We have covered all the aspects of how to start a business from home, online, and from scratch. Now, let’s learn how to market and promote your business to generate sales and make profits.
There are different platforms you can use to create awareness about your products and services.
You need to know who your target customers are and what do they need. That will enable you to customize and market your products accordingly to satisfy those needs and cash out.
Some of the questions to ask yourself are: Who needs what I’m selling and who might think that it’s helpful?
At that point, you have to delve into who that person(s) is, and what sort of information would impact them. That incorporates their experiences, interests, objectives, and difficulties, how old they are, and which social media platforms they use, etc.
Brand identity is mainly the public image of the brand and what it represents for consumers. Building a powerful brand identity takes time and it includes many steps like:
Designing a visually compelling and eye-catching logo.
Having an emotionally-touching purpose, vision, and mission.
Delivering persuasive messages through ads and content.
Those will get the customers to be emotionally attached to the brand and expect great value by owning its products.
Mark the core elements of your business and brand and add those elements to your website. Also on blogs, emails with email marketing, and Facebook ads.
Grow your Instagram followers, integrate with LinkedIn, answer questions on Quora or Reddit to promote your site, etc.
It’s simply the process of gathering and listing the contact info of potential customers who might be interested in purchasing your products/services.
After having a list you can start contacting them to offer your products/services and explain the benefits they can acquire by making a purchase from you.
15. Hiring the right employees
At the point when you’re figuring out how to start a business, you need to recall that an association gets success and becomes effective due to its employees. The next stage will be to plan your group and begin recruiting for the assistance you need.
You should be clear about your hiring decisions. You should be able to figure out who will help you to flourish your business and who will be slowing it down.
Your group may comprise of freelancers, advisors, virtual assistants, and contractual workers. Also, you can hire bookkeepers, lawyers, key speculators, and business tutors.
As you build up your team, you will have to devote plenty of time for creating relevant job descriptions and, on this basis, start interviewing the candidates. You may have many options from fresher’s to intermediates and experienced level candidates as well.
First and foremost, recruit one HR staff that can spare you both time and effort so you can focus on other tasks. Since recruiting has to cover many rules and protocols, you’ll need to guarantee that you have an impartial and reasonable employing process that is available to every qualified candidate.
Congratulate yourself on learning how to create a business! Once you have learned and figured out the important concepts of creating and starting a business, you will soon realize that it was like a bang for a buck. All you need to do is to focus on your goals and achieve what you have planned for.