Are you an aspiring entrepreneur looking to start a business but not exactly sure where to begin? It can be daunting to think of all the pieces you need to get your venture going, especially if you’re doing it alone without an experienced team.
We’ve compiled 10 of the basic steps you need to take to get your business up and running.
1. Start With the Idea
Remember how people used to say, “Start a business based on what you know”? Well, that still holds true and can be a great place to start. To begin, jot down ideas for businesses you’re passionate about and your skill sets, then research the market for potential opportunities or problems to solve.
If you are into selling products, you will need to create or buy a product people want and can market it to the right audience. On the other hand, if you are looking to offer a service, you’ll need to understand the needs of your target audience and identify how they can benefit from what you have to offer.
Starting with an idea of how you can make money and what you are passionate about will guide the way to approach the other steps.
2. Pick a Name
Once you have an idea for your business, think of a name that is unique, memorable, and can be easily associated with your brand. Your business name can make a huge difference when it comes to branding and marketing so it’s important to choose wisely.
Make sure the name isn’t already being used by another business and register your domain name as soon as possible to prevent anyone else from snatching it away. Before registering your business name, invest a little time to search if there are any businesses out there with a similar or identical name.
3. Write a Business Plan
Having a business plan can help you stay organized, focused, and on track for success. It will be your guiding document on how to move forward with your business.
When writing a business plan, you will be able to envision your goals, plan strategies, analyze your competition, and track progress. It will also outline the financial components of your business such as start-up costs, forecasted revenue for the first year, and a description of how you’ll generate income.
For starters, a business plan should include:
- Company Overview: This is where you will explain your business concept and why it’s worth investing in.
- Product/Service Description: Here you will describe what products or services you will be offering.
- Market Research: This is where you will analyze your market, competition, and potential customers.
- Financials: This includes information about start-up costs, budgeting, pricing strategy, and more.
- Operations: This section should include information about how you will manage day-to-day operations and long-term growth.
- Business Goals: It is always better to include specific, measurable goals and objectives in your plan.
- Appendix: This section can include any additional information such as resumes, permits, and licenses.
4. Setting Up the Legal Structure
Choosing the right legal structure for your business is an important step in setting up your venture. It will not only help you protect yourself from potential liabilities and risks but also determine how much money you’ll have to pay in taxes and establish how much control you’ll have over decisions.
We typically recommend an LLC because you can rarely go wrong with them because they provide liability protection and many different tax filing options (and you can make those choices later on with a CPA when the time comes). Use Drafted Legal and get your LLC filed within 7 days.
The most popular types of business entities are:
- Sole Proprietorship
- Limited Liability Company (LLC)
Sole proprietorship is a simple structure wherein one individual owns and controls the business. It is the most common type of business structure as it’s quick and simple to set up. However, this type of structure doesn’t separate business entities. This means, business assets and liabilities are personally owned by the individual and there’s no business entity to shield them from personal liability. Read this to know why you should avoid being a sole p.
A business partnership is created when two or more individuals form a single venture together. Partnerships are often used by family members, friends, or colleagues who decide to join forces to invest in and operate a business. Here, business assets and liabilities are shared among the partners, and each partner is responsible for their individual actions.
Limited Liability Company (LLC)
An LLC is a hybrid structure combining the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
This type of business structure has become very popular in recent years because it can protect owners from personal liability for business debts and obligations.
A corporation is an independent legal entity owned by shareholders. Corporations offer the strongest protection from personal liability, as shareholders are not liable for company debts or obligations. C corps, S corps, B corps, and nonprofits are the major types of corporations with each having different levels of taxation and legal qualification.
Choosing the right legal structure will depend on the size and type of your venture. You should also consult with a lawyer to ensure you are making the best decision for your business. If you happen to opt for an LLC, you’ll need to file for it with the state, and in some cases, a federal level. Drafted Legal offers LLC business assistance from creating and setting up an LLC to registering trademarks. Feel free to contact us for any questions or advice.
5. Opening a Bank Account
Every business should have its own bank account to ensure that personal and business funds are kept separate and organized. Opening a business bank account will also help you better keep track of your expenses, profits, cash flows, and taxes.
Before heading to the bank, contact them first to find out what types of documents you need to provide such as a business license, tax ID number, or proof of identity. Once your bank account is open, make sure to link it with any accounting software you may be using to better keep track of your finances. Give access to your business bank account to all key decision-makers in the company. You can also open a line of credit for your business to have access to funds for any potential emergencies.
6. Obtaining Insurance
It is essential that you protect your business from any possible liabilities and risks with adequate insurance coverage.
Depending on the type of industry you are in, you may need certain types of insurance such as:
- Business owner’s policy
- General liability insurance
- Property insurance
- Professional liability insurance
- Workers’ compensation insurance
- Data breach insurance
- Hazard insurance
Make sure to research the necessary coverage for your business and contact an experienced insurance agent for advice. It is also important to review your policy once a year to ensure that you are still adequately protected. Consulting with an expert or experienced insurance agent also helps you spot any gaps in your coverage and make necessary updates.
7. Obtaining a Business License
A business license is required in most states before you can legally operate. Depending on your state and industry, you may be subject to different types of licenses and permits. If your business falls under the regulation of a federal agency, you may be required to obtain additional licenses or permits.
Make sure to check with your state and local governing bodies for the necessary license requirements. You can start by visiting the website of your state government to find out what type of license your business may need. It’s also a good idea to consult with an experienced legal professional for expert advice and assistance on this matter.
Once you have obtained the necessary licenses and permits, make sure that they are up-to-date and renewed whenever necessary.
8. Creating a Marketing
Now after having all the necessary steps in place, you’ll need to focus on marketing your business. You can start by creating a website for your business. Websites are a great way to showcase your business, products, and services, and attract more customers. You can partner with a digital marketing agency that offers web design and development as well as SEO and other digital marketing services.
Social media is another great way to market your business and connect with potential customers. You can create accounts on various platforms such as Facebook, Instagram, LinkedIn, Twitter, etc., and use them to showcase your products or services and reach a larger audience. Additionally, you should consider investing in paid advertising campaigns for better visibility across the web. This can be anything from Google Ads to social media ads.
Finally, you should also consider engaging in content marketing by creating useful and informative content related to your business and industry. This can include blog posts, videos, infographics, podcasts, etc., which will help you build trust and credibility with potential customers.
9. Establishing a Network and Connections
Networking is essential for any business, especially when you are just starting out. It can help you find partners, investors, customers, suppliers, and mentors who can provide invaluable guidance on growing your business.
If you are targeting your local area, you can join local trade organizations such as chambers of commerce, business networking groups, and professional associations. You can also attend local events and conferences related to your industry.
For online networking, you can join several social media platforms such as LinkedIn, and create a profile for yourself and your business. This will help you reach people outside of your geographic area and make important connections with potential partners, customers, and investors.
You can also look for online forums and discussion boards related to your industry and start participating in conversations. This will help you build relationships with other professionals in the field who can guide you on the right path.
10. Prepare for Launch
Once you have completed all the steps mentioned above, it’s time to prepare for launch. You’ll need to make sure that everything is in place and tested before you go live. This includes double-checking your website, social media accounts, and other online presence, as well as making sure that your licensing and permit documents are up-to-date.
You should also prepare a launch plan that outlines all the activities you’ll be carrying out when you go live, such as marketing campaigns, promotions, and other related activities. Additionally, make sure to inform your existing contacts about your launch so they can help spread the word.
If you have a brick-and-mortar business, you may want to create a plan for the grand opening day. This can include decorations, giveaways, and other activities designed to attract customers and build excitement about your business. Encourage your friends and family to join you on this day, as they can help with the activities and get people in the door. Depending on your business, you can invite the local media and VIPs to the opening as well.
Finally, make sure that you have a plan in place for any potential issues or problems that may arise during launch day. Have backup plans for everything and create an emergency contact list of people who can help you in case something goes wrong. With these safety measures in place, your business will be ready to go live.
The Bottom Line
Preparation is arguably the hardest part when starting a business. It can be overwhelming to think about all the things you need to do, but having a comprehensive plan and taking one step at a time will help make the journey smoother.
Just remember that every successful business starts with an idea and hard work, so take your time and focus on making your dream come true. With this guide in hand, you’ll be ready to launch your business in no time.
In need of legal templates for your business? Don’t know where to start, read about the startup legal documents or just get the bundle for your business industry here. Drafted Legal provides LLCs and templates. Contact us today to learn more!
If you need to talk to a lawyer, contact these business attorneys.