Are you thinking of starting your own business? If you are, congratulations! Few would ever dare to take the less-traveled path of entrepreneurship. Hence, for your courage and the success that lies ahead, we congratulate you.
With that said, there’s a reason not many people take the entrepreneurial plunge. Challenges await you on your path to business success. You must also recognize financial and legal difficulties as legitimate roadblocks to your success as an entrepreneur.
Does your venture have to stop with these obstacles? We answer with a resounding “no.”
By taking a step-by-step approach to starting your business, you’ll find that the road to business success is straighter than you think.
Read on to learn the steps to starting your small business from scratch.
1. Research the Market and Ideas
Market research is an often-overlooked part of starting a business. However, it’s crucial to your success. Through market research, you can discover critical aspects of the niche you are trying to enter.
First, market research enables you to determine the need for your business in your immediate area. By conducting research, you’ll see if there’s a high demand for the services you offer. As we all know, demand engenders opportunity. Without it, your business may not be tenable, at least for the time being.
Second, researching the market will give you insight into your competitors. You’ll develop better projections and ideas about positioning yourself in the market.
2. Think of a Name and “Own” It
Now that you’ve acquired enough information to enter the market, you must come up with an identity that distinguishes you at a glance. We’re talking about your business’s name.
Your business’s name will be at the forefront of your marketing and branding. With a name that’s easy to remember, you’ll already be a step ahead of your competitors.
However, having a name doesn’t suffice. You must also “own” it, for legal purposes. By “owning,” we mean having exclusive rights to use your name.
To register your business name, you must first check if other businesses have the name you have in mind. You can check the availability of a name here.
After you’ve done that and determined that no business uses your desired name, you’re ready to register with the Small Business Administration.
3. Create Your Business Plan
Your business plan is a blueprint of your small business’s objectives and your strategies for meeting these objectives. It’s an essential part of business launching, especially if you’re planning to pitch your venture to potential investors. A business plan is also a requirement if you’re planning on securing financing from banks or other financial institutions.
Your business plan should include several details about your venture. It must contain the details of your company and the services or products you offer. Your findings from your market research must also be in the business plan.
Your business plan must also be clear about your strategies. These strategies include financial, operational, and marketing strategies.
Lastly, you must also include your operational budget in the business plan. The budget doesn’t need to be exact. You can include it as a range. Aside from that, ensure that you have timeframes and allocations outlined in your plan.
There’s no single way to write a business plan. Your business will differ and so will the contents of your plan. As a rule of thumb, make your plan anywhere from 15 to 20 pages long.
4. Choose Your Business Structure
Your business must operate as a corporate entity for legal reasons. When selecting your business’s corporate structure, you want a structure that allows you to retain maximum control. You’ll also want a structure that protects your assets.
Operating as a sole proprietorship or partnership, you retain control of your business but risk liabilities. If you decide to operate as a corporation, you’ll enjoy maximum protection but lose control of your business. You might even have to get several investors on board — and doing this is no easy task for any startup.
To enjoy protection and control of your business, you must operate as an LLC. An LLC, or limited liability company, allows you to separate business from personal assets. The best part of operating as an LLC is you get many of the perks of C or S-corps without losing control of your business.
To operate as an LLC, you must first register as one. LLC registration has strict registration requirements that can confuse many startup owners.
Luckily, we’ve got surefire registration templates that take the guesswork out of registering your business. Click here to get access to our LLC registration template and kick-start your LLC within seven business days.
Pro Tip: Get the legal templates you need for your startup.
5. Apply for Licenses
After registering a new business, you must apply for several licenses. The licenses for startups will vary from state to state. With that said, here are the licenses every business must apply for:
First, you must register for a federal tax ID number. A federal tax ID number or employer identification number (EIN) is a must for every business for it to pay business taxes. You also need it before you decide to hire any employees.
Next, you must apply for federal licenses to operate. The operational license will depend on the industry in which your business operates. For example, if you’re running a logistics business, you must apply for permits from the U.S. Department of Transportation.
For a list of departments and the industries to which they cater, check out the SBA’s website.
After applying for a federal license or permit, you must apply for state licenses. Each state will have its agencies or departments for state business registration.
View your state’s licensing requirements and fees using the SBA’s business location page.
6. Open a Business Bank Account
Opening a business bank account allows you to easily purchase goods and separate your money from your business’s. You can open a business bank account with any bank.
Ensure that you’ve already obtained your EIN. You will also need a valid ID to open a bank account for your business. Another requirement is a copy of your ownership agreement or any document that proves your business ownership.
7. Get Business Insurance
Insurance doesn’t only protect your business from risks and losses. Business insurance can also indemnify you for anything that makes you liable.
Different types of insurance protect businesses. While it’s ideal to have all of them in place, you may be overpaying for insurance if you buy all types of insurance from the get-go. With this in mind, begin by looking at your risks.
Is your business going to operate in a flood-prone area? Buy flood insurance.
Will you be operating a business that manufactures and sells goods? It may be wise to purchase product liability insurance.
Perhaps, you’ll be offering services instead of products. If this is the case, you cannot go wrong with professional liability insurance.
There’s a type of insurance for every business risk. To get the insurance that matches your business’s needs, speak with a reputable insurance agent in your state or locality. Get quotes for the best prices and coverages, and don’t be afraid to shop around for competitive premiums.
Also, never hesitate to re-evaluate your insurance policy periodically. Once your business gets past the initial stages of its operation, its needs may change. For this reason, you may have to add or deduct riders or change carriers altogether.
Getting the word out about your business is an essential part of your business’s success. This is where marketing comes in. Marketing can be online or offline, depending on the type of business you’re operating. However, for maximum reach, you may have to consider both online and offline channels.
As a startup owner, you may have to start locally. With this in mind, look into local marketing strategies like local SEO. You can also have promotional events to introduce your business’s physical presence.
Besides making your presence felt to customers, you must network with other businesses in your area. Networks are an excellent source of referrals that can drive online and offline traffic to your business.
When choosing who best to network with, choose other small business owners like yourself. Doing this can help you grow as an entrepreneur. It will also promote better brand awareness.
Start Your LLC in Just Seven Days!
For many new business owners, registration is a major sticking point. Luckily, the same doesn’t have to be true for you.
By buying one of our templates, you can have an LLC with your name on it in just seven business days. Sign up for our LLC registration to kick-start your LLC today.
For legal services, contact our legal partners at Wesley Henderson via our contact page.