HOW TO START A BUSINESS IN 10 STEPS
Having a great business idea is only part of the journey. In order to be successful, you’ll need to take a few steps to get it off the ground. In order to refine your business idea and set yourself up for success, consider doing the following:
1.Summarize your vision
Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.
Your business should have a clear point of difference – a unique selling, or value, proposition. It must also have a focused service or product and a distinct target customer.
2. Define a business name
Your business name is an essential part of your new business. It determines what you’ll call it on official documentation and on the business plan you’ll share with investors. Because your name will stem off your business plan and offerings, it’s best to create it after you’ve written a plan. Every name is unique in its own way it will add value to the specific brand value to the business.
If you choose to operate your business under a name other than your personal name (if you are a sole proprietor) or legal entity name (if you are an LLC or corporation), you will need to register that name with local and/or state governments in a process known as filing a “doing business as” (DBA) name.
3.Choose your business structure.
A business structure is the first step in building your company’s legal set-up. In choosing your business structure, you determine how you’ll file taxes and your legal protections and liabilities.
There are four key types of business structures:
Sole proprietorship
Partnership
Corporation
Limited liability company (LLC)
4.Register your business.
Registering your business is the thing that will make it a real, legal entity. Registration requirements and processes will vary depending on where you’re located, as you’ll likely need to comply with a series of federal, state, and local processes.
You will likely want to register your business name and apply for a federal tax ID. You may also want to file for a trademark or apply for a state tax ID, depending on where you will be conducting your business. You can decipher the various registration needs for your business using guidance from the US Small Business Administration’s website.
Registering your business will be important as you seek to open up bank accounts, apply for business licenses and permits, and legally begin operations.
5.Apply for licenses and permits.
In order to launch certain businesses, you’ll need to acquire federal and state licenses and permits.
Businesses that require federal licenses or permits are those with business activities regulated by a federal agency, such as serving alcoholic beverages; working with agriculture, wildlife, or fishing; broadcasting; or operating large vehicles. Check with the corresponding federal agency to learn more about the necessary licenses and permits for your business.
More businesses are regulated on a state level, such as construction, dry cleaning, plumbing, and retail. Check your state’s website to learn more about the types of licenses and permits your business may need.
6.Get business insurance.
Business insurance will protect you and your business in the event of any accidental or unexpected incidents, such as theft, damages, and lawsuits. The type of protections you may require will depend largely on the type of business you are running and how you expect to run it.
In general, you’ll likely want to consult an insurance agent to help you assess risk, determine the type of insurance that would be most appropriate for your business, and find policies that will fit your budget and coverage needs. An insurance agent can also help you interpret whether your state requires any specific insurance coverage.
Some common types of insurance for small businesses include:
Business owner’s policy
General liability insurance
Professional liability insurance
Business income coverage
Commercial property insurance
Workers’ compensation insurance
Data breach insurance
Hazard insurance
7.Open a bank account.
Opening a bank account for your business that is separate from your personal account can help keep your finances organized. With some accounts, you may also have the option to open a line of credit for your business, and if you plan to hire employees, you can authorize them to access the accounts, should they deal with your business finances.
Along with your business bank account, you may want to open a business credit card for larger purchases and regular business expenses.
8.Prepare for launch.
With your preliminary logistics settled, you are well on your way to starting your business. For additional insight into the process of launching your own business, check out the Entrepreneurship Specialization from Wharton School of Business. Through five courses, you’ll learn more about developing your idea, launching your business, proven growth strategies, profitability, and more.
As you approach your launch, you may find it helpful to organize your marketing efforts and start getting the word out about your business. Consider launching a website, advertising your services at local events, or turning to social media. You can learn and practice social media marketing skills with the Meta Social Media Marketing Professional Certificate program.
9. Ensure security to Your Business
You’ve invested a lot into your startup. While it’s exciting when you first open your doors for business, it also makes your company vulnerable to different risks. Whether it’s a customer injury or property damage, having the right safeguards in place is important to protect your business and investment. Business insurance for startups can help protect your company from various risks. Businesses in the United States must have some type of business insurance, and getting the right coverage can help you build a comprehensive protection plan. If you don’t know where to begin, start by customizing your business insurance by its industry.
10. Broaden Your Business
Setting up the right foundation for your startup puts it on the path to be a growing business. Whether you create a sophisticated marketing strategy or work with vendors to help you expand, growing a business takes dedication and resources. When you’re ready, you’ll want to make sure you have the right team and safeguards in place to protect your business and help it mature. Spend the time and money to find people with both the skills and personality to work well with you and meet your company objectives.
Now that your business is officially up and running, it’s time to bring in customers. You can start by creating a unique selling proposition that separates you from the competition and creating a marketing plan that promotes your business most effectively. Don’t be shy to promote your own business, until your happy customers will start spreading the word for you — it’s your job!
