Are you ready to start your own business?
Starting your organization can be a challenge. You will need sufficient financial resources, time, personal support, and professional help to realize your dream of starting your own business successfully.
To start a business, follow these 12 simple steps.
Step 1: Choose the Right Business Idea
The first step to processing your own business is to decide what kind of business to start. Look for a small business idea that fits your interests, personal goals, and natural abilities. This will help you stay motivated even in difficult times and significantly increase your chances of success.
Step 2: Plan Your Business
Successful businesses are built through careful planning. Before you invest a great deal of money and other resources in your business, you should critically analyze your idea and develop a plan. At the very least, you should include the following.
Choose a Business Name
What name do you want to give your business? When you name your business, you should choose a name that fits the naming conventions of your country and will be well received by your customers.
Find a Business Location
Do you know where your business will be located? Whether you are opening a brick-and-mortar business or working from home, the location of your business is critical to the type of licenses and permits you will need and the growth potential of your business.
Conduct Market Research
Have you learned about your market? Before writing your business plan, thorough market research is essential. To do this, you can conduct surveys, do search engine optimization (SEO) or hold focus groups. Market research aims to understand your target market and your competitors better to create an effective business plan.
Write a business plan
A well-developed business plan not only helps you get organized when starting your small business. business plans are used to obtain funding and reach important milestones.
Here are some of the essential components of a well-written business plan:
- Product Development: What problem will your business solve? How will your product or service differ from those of your competitors?
- Sales & Marketing: Who are your potential customers? How can you grab their attention and turn them into buyers?
- People and Partnerships: What staff do you need to hire, and what professional relationships do you need to build to succeed?
- Financial Planning: How many customers or sales do you need to break even? How much money do you need to reach this goal, and where will you get the money?
Step 3: Get Funding
It’s no secret that you require funding to start a business, but before you can secure the money to cover the start-up costs, there are a few things you need to do first. Calculate your business costs before you seek outside funding. This will help you find the right source of funding for your business needs.
Next, plan your expenses wisely and prepare a detailed financial plan.
Explore Business Funding Options
- Bootstrapping: This is the do-it-yourself approach to business financing, meaning you provide the capital for your business through personal savings and your current income. When your company is up and running, the profits are reinvested into the business to keep it growing.
- Friends and Family: Financing your business through loans from friends and relatives can be an excellent way to get the capital you require to start your small business. When working with friends and relatives, it is advisable to set up a written agreement and repayment plan.
- Small Business Grants: small business grants are essentially business financing for your business that you do not have to pay back. You can get a slight business give by applying to a grant provider.
- Small Business Loans: You can usually apply for small business loans from a bank or other credit institution. This method of financing requires repayment but gives you the capital to cover start-up costs or more.
Step 4: Choose a Business Structure
Registering your company as a legal entity, e.g., as a limited liability company, public limited company, or non-profit organization, has two significant advantages:
- Increased credibility
- Protection from personal liability in case your business is sued.
Find out which corporate structure is right for your new business.
Sole Proprietorship
A sole proprietorship is an informal company structure that is neither registered nor separate from its owner. This means that 100% of the business profits go to the owner, but the owner also bears 100% of the financial liability if the business incurs debt or is issued.
Partnership
Like a sole proprietorship, a partnership is an informal business structure without a separate legal personality but with multiple owners. Partnerships also do not provide the liability protection that a formal business structure does.
LLCs
A limited liability company (LLC) combines personal asset protection with a partnership or sole proprietorship flexibility. Most small businesses prefer the LLC structure because of its ease of maintenance and favorable tax treatment.
Corporations
A firm is a separate legal entity owned by its shareholders. Corporations are subject to more formal rules than LLCs, and they tend to be more attractive to investors. Most large companies such as Apple fall into the corporation category.
Nonprofits
A non-profit organization is an organization that is funded by donations and not by investors. non-profit organizations are usually established to promote a social purpose and are exempt from paying taxes.
If you choose not to register your business as a legal entity, you will be personally responsible for your business’s financial debts and liabilities.
In addition, owners of partnerships and sole proprietorships may be required to file a DBA, also known as a “fictitious name,” “brand name,” or “assumed name,” relying on the state. A DBA is not a corporate structure.
Note that three states (Kansas, New Mexico, and South Carolina) do not have DBAs.
Step 5: Form Your Business
Once you have decided on a business structure, the next step is to set up your business. Regardless of which formal business structure you choose, there are a few common steps, including:
- Appointing a registered agent for your business.
- Selecting a registered agent: a natural or legal person who will receive tax and legal documents on behalf of your business.
- Applying for an Employer Identification Number (EIN): a number issued by the Internal Revenue Service (IRS) to identify businesses for tax purposes.
- Filing incorporation documents.
In addition to these steps, each business structure has its requirements that apply only to that business structure.
You can have your business incorporated by a professional service provider or complete the steps below yourself:
Form an LLC
LLCs are the most straightforward formal business structure to form and maintain. With less paperwork than other business structures, you can form an LLC in six easy steps.
- Choose your state
- Name your LLC
- Choose a registered agent
- File your LLC with the state
- Create an LLC operating agreement
- Obtain an EIN
Start a Corporation
If you think that setting up a corporation is right for your business, there are five steps to setting up your business as a corporation. In addition, you need to decide what type of company you want to form, such as a C Corporation, an S Corporation, or a B Corporation.
- Name your company
- Choose a registered agent
- Hold an incorporation meeting
- File incorporation documents
- Apply for an EIN
Form a Nonprofit
If you decide to form a non-profit organization, you will need to follow many of the same steps as a corporation or limited liability company. However, with this corporate structure, you can apply for tax exemption, known as 501(c)(3) status, with the IRS.
- Designate your non-profit organization
- Choose a registered agent
- Elect your board members and officers
- Adopt bylaws and a conflict of interest policy
- File articles of incorporation
- Obtain an EIN
- Apply for 501(c)(3)
Step 6: Set up Business Banking, Credit Cards, and Accounting
Using dedicated business accounts is essential to protect your assets.
If your personal and business accounts are mixed, your assets (your house, car, and other valuables) are at risk if your business is sued. In business law, this is called piercing the corporate veil.
You can protect your business with these three steps:
1. Opening a business bank account:
- Separates your assets from company assets, which is necessary for the protection of your assets.
- Facilitates bookkeeping and tax returns.
2. Getting a business credit card:
- Helps you separate private and business expenses.
- You build up a credit history for your business, which can be helpful when raising capital later (e.g., small business loans, small business grants).
3. Setting up business accounting
An accounting system helps you track the performance of your business and simplifies annual tax returns. You can download your bank and credit card transactions with quality accounting software, making bookkeeping quick and easy.
Step 7: Get Insured
Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance you should consider are:
- General liability insurance
- Workers’ Compensation insurance.
- Professional Liability Insurance
We recommend that all small businesses, including home-based businesses, purchase general liability insurance. Businesses that provide professional advice or services, such as consulting and accounting firms, should also consider professional liability insurance.
Each state has its own workers’ compensation insurance requirements, which often depend on the number of employees a business has.
Step 8: Obtain Permits and Licenses
To legally operate your new business, you must comply with federal, state, and local government regulations. In many cases, this means that you will need to obtain one or more business permits and licenses.
For example, a restaurant will probably need a health permit, a building permit, a signage permit, etc.
Step 9: Hire Employees
For any business (unless you plan to be the sole employee of your business), building a solid team is a crucial next step to starting a successful business. This is about finding the right people and complying with the legal requirements for hiring employees, and this includes being registered with the tax office for employee taxes.
Once you have your team in place, we strongly recommend using a payroll service to issue paychecks, track time and make tax season easier.
Step 10: Define Your Brand
The most important and most memorable businesses are built on a solid brand. When developing your brand, you should consider:
- what your company stands for
- what your core values are
- How you can gain the trust of your customers
Once you are confident in answering these questions, it is time to look at your business name. Your company name is the cornerstone of good branding and a successful business.
Step 11: Build Your Business Website
While creating a website is an important step, some fear that this is out of reach for them because they have no experience creating websites. This fear may have been justified in 2015, but web technology has made considerable strides in recent years, making life much easier for small business owners.
Here are the top reasons why you shouldn’t put off building your website:
- All reputable businesses have a website – The size or industry of your business doesn’t matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are no substitute for a business website that you own and control.
- Website building tools like GoDaddy Website Builder have made it extremely easy to create a simple website. You don’t need to hire a web developer or designer to create a website you can be proud of.
Step 12: Promote and Market Your Business
Promoting Your Business
There are many different ways to promote your business, but the most effective are:
- Press Releases
- YouTube
- Google My Business
1. Press Releases
Press releases are a great way to promote your brand and one of the most effective strategies:
- They provide publicity
- Establish your brand on the web
- They improve your website’s search engine optimization and attract more customers to your website.
- Have a one-time cost in terms of effort and money.
- Have long-term benefits
2. Facebook
Facebook pages are a great and free way to interact with your customers. However, it takes constant effort to be successful.
A Facebook page can be used to
- Establish your local business presence
- Showcase your business’ products and services
- Communicate with your customers
- Get and share customer feedback
- Promote your business through advertising, although this may not be appropriate for your business
3. YouTube
With billions of users worldwide, YouTube has a vast customer base looking for content that your business can produce. Creating a YouTube channel for your business can be used to do this.
- Improve your SEO by increasing your Google rankings and conversion rates.
- Promote social media engagement and build closer relationships with your customers.
- Provide detailed explanations of your products and services.
4. Google My Business
Google My Business is a helpful tool that allows businesses to manage how their business appears on the Google search engine results page (SERP) and Google Maps.
Google My Business can be used to:
- Link to important information about your business, such as your website, address, opening hours, phone number, and customer reviews.
- Increase brand awareness by improving local SEO and increasing traffic to your website.
- You can connect with customers and increase your credibility.
If you want to grow your business, get started today!
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Read More: Why Your Business Needs a Website