So you want to start a business … but you aren’t sure how. Starting a business is a long and complex process, so today we’re giving you the Cliff Notes version to help you grasp the process as a whole. Here are nine steps to starting a business, from doing market research to ordering branded merchandise to promote your launch:
Research the market.
Before you launch a business, you need to make sure that someone isn’t already doing the exact same thing. Do your market research to determine where there are gaps and opportunities and pivot your idea if need be. If your idea is location-based, prioritize looking at competitors in your local and regional area. If you were planning to launch an eCommerce company that isn’t dependent on location, then you will need to consider a much broader slate of competitors.
Decide on a business idea.
After you’ve done your research and assessed your strengths and weaknesses in relation to what’s already out there, it’s time to decide on a business idea. Dive deep into why you want to start this particular idea at this particular time in this particular location — and why you’re the person to do it. You will need to tell this story to future customers as well as potential investors, so if you can’t get it figured out now, it might be time to go back to the drawing board and reassess your idea.
Write up a business plan.
The business plan is a comprehensive document that explains what your business is and what your projected expenses and profits are. The plan should describe the members of your team and how that team will be structured. It should also explain what products or services you plan to sell right away, as well as potential expansions you might explore in the future. A section of the plan should also provide a summary of the market analysis you did in the first step. If you are asking for funding, that should form another section of the plan.
Figure out the finances.
Starting a business takes money, and you need to figure out where that money is coming from. There are multiple ways to finance a business, including using your own savings, getting donations from family and friends, securing a loan from a bank, raising investments from venture capitalists and more. Some people even combine several methods of fundraising to get the capital they need to get started. Each method of fundraising has its own pros and cons, so make sure that you weigh them carefully before making a decision.
Choose a business structure.
Legally speaking, you need to choose a business structure before you register your business with the state. Business structures include sole proprietorships, partnerships, limited liability companies (LLCs), C corp, S corp, B corp, close corporation and nonprofit corporations. Carefully consider each of these options and choose the one that makes the most sense for your idea. Some states make it more difficult to change the structure later than others do, so choose wisely upfront so you can hopefully avoid a switch in the future.
Acquire your licenses and insurance.
Once you have decided on your business structure, you will need to register with federal, state, and local governments and, in some cases, obtain permits from them in order to start doing business. You will need an article of incorporation document and possibly an operating agreement in order to do this.
Depending on your structure, you might need to file to get an employer identification number. You will also need to file tax forms so you can fulfill your tax obligations to both the state and federal governments. Finally, you will need to purchase at least one of several types of business insurance to ensure that you are covered from theft, damage and more. For example, if you are venturing into lawn care, then you should have the right landscaping insurance policy for your business.
Pick a location.
If your business requires a physical location, you will need to select that soon. You will need to weigh many different factors when choosing a location, including the cost of rent, the level of foot traffic, the availability of parking and/or transportation and more. If you are operating the business out of your home, then create a home office where you can work on your computer or pack and ship orders — you’ll be able to deduct the square footage you use on your taxes.
Select your team.
Unless you are running a sole proprietorship where you are the only person involved, then you will need to select and hire a team to assist you. This team will be key to the successful launch of your business, so hire the best people possible for your budget. Look for experience as well as cultural fit when you are conducting hiring interviews. If two personalities clash, that will cause conflict no matter how experienced each of them are as individuals.
Market your business.
Once you’re getting close to your launch date, you need to start drumming up some excitement. Create a business website that showcases the promotional products and services that you plan to offer. Establish social media channels and start teasing the launch of your business. Order some corporate gifts for clients with your logo to hand out at the launch party.
Reach out to local media outlets to see if any of them would be interested in covering your business launch. Many local publications also offer an online database where you can add your business, which makes it easy for both locals and tourists to find, so definitely take advantage of this.
Got specific questions about starting a business or advice to offer as a small business owner yourself? Drop them in the comments below so we can all share the knowledge together.