In this article we’re going to get down to the nuts and bolts of starting a business. By now you should have identified the business you want to start (lifestyle, small business or start up), determined the viability of the idea and your ability to deliver on it, and decided on the business model. If not, here’s a quick recap from our previous articles covering what you should have already completed before you start setting up your business.
- Identified the business you want to run
- Analyzed the competition
- Researched your target market
- Determined the realistic market potential for your business
- Decided on your business model
All good? Then let’s move on to the four main steps involved in launching your new business.
Register Your Business (And other necessary legal stuff)
There are legal requirements involved with starting a business, as well as things that just make sense to do. Here we’re going to cover all of the things you want to consider getting squared away before you start trading under your new business name. A great resource for this part of the process is the United States Small Business Administration at https://www.sba.gov/.
- Choose a business name: obvious, yes, but still required unless you’re conducting business as yourself using your legal name.
- Choose a business structure: you must decide on your business structure before you register your business. It’s something you want to think thoroughly about as your choice affects everything from your taxes to filings to personal liability. There are pros and cons to each business structure. To learn more about the more common types visit https://www.sba.gov/business-guide/launch/choose-business-structure-types-chart.
- Register your business name: this can be as simple as registering your business name with state and local governments. More information on what is required can be found here https://www.sba.gov/business-guide/launch/choose-your-business-name-register.
- Trademark your business: although not required, it can be a good idea to file with the United States Patent and Trademark Office to protect your business name, logo, tagline, or product name. Find out here https://www.uspto.gov/.
- Apply for tax numbers: most businesses are required to have a federal and a state tax ID number for taxation purposes. Find out more about your tax obligations here https://www.sba.gov/business-guide/launch/get-federal-state-tax-id-number-ein.
- Apply for licenses and permits: depending on your location and industry type, you may require permits and/or licenses to run your business. Check out this handy link to find out more https://www.sba.gov/business-guide/launch/apply-for-licenses-permits-federal-state.
Make a Business Plan
Many people think of a business plan as primarily a tool used to secure funding, but the truth is it’s much more than that. Your business plan is a strategic planning tool that will layout the strategy, tactics, budgets and milestones required to reach your business goals. It’s essentially a roadmap outlining everything you need to do and how much money it will take to successfully start and run your business.
There are many different types of business plans ranging from startup plans to operational, strategic and feasibility plans, and more. Additionally, there’s no one size fits all model. As a new business though, there are some key elements your business plan should have:
- An outline of the topline strategy including the offering, competitive edge, target market and business goals.
- A tactical plan laying out the framework for how the business will operate. This includes everything from operations to pricing and marketing.
- Budgets and sales forecasts.
- Clear milestones, performance metrics and tracking methods.
And perhaps more important than the business plan format you choose is how you execute it. A business plan isn’t worth the paper it’s written on if it doesn’t help you set up and run your business effectively. Some tips to get the most out of your business plan include:
- Set clear, focused and realistic goals.
- Keep it simple and to the point.
- Don’t guess. Use all available resources to base your plans on real data.
- Look at your business plan as a planning tool not only for now, but the future too. A valuable business plan is one that is fluid, something that you will go back to, add to and change as your business grows.
Unless you have the capital to fund your own venture (or it’s a very low-cost business startup) you’ll need to secure financing. This is typically either in the form of a bank loan or investment by venture capitalists or angel investors. This is where having a solid business plan can really help out. Being able to show potential investors how your business will turn a profit is key to getting funded, so the more you can speak to that, the more successful your pitch will be.
Speaking of which, your pitch may be the single most important part of getting funded, so you want to make sure you nail it. There are lots of resources out there dedicated to “the pitch”, but nothing is better than advice from a trusted mentor.
And practice. Lots of practice.
Set Up Your Business
Now that you have your roadmap in front of you and your legal and fiscal affairs in order, it’s time for the fun part: setting up your business. How extensive the setup is of course depends entirely on the type of business you’ll be running, and it may even require its own plan to figure out! But below are some general guidelines to the set up phase to get you started.
- Find and set up your place of business: whether it’s a home office or commercial, a storefront or production space, there are many things to be done like negotiating the lease, interior decorating and space set up, organizing utilities and loads of other little things you probably haven’t thought of like stocking stationary and light bulbs.
- Organize operations: this covers everything from setting up vendor relations, buying inventory, organizing payment and shipping methods, setting prices to hiring staff. And that’s probably just for starters.
- Develop your brand and marketing: your brand needs an identity and a way to reach your target market. Develop a strong brand identity (at least a logo and a website) and determine how to effectively market to your target audiences. If you don’t have the know-how and tools yourself, consider hiring professionals.
- Protect yourself and your business: make sure you have the right insurance in place before you commence business operations. This may include business insurance, liability insurance and health insurance.
So there you have your basic blueprint for getting started on your next business venture. Stay tuned for more tips and tricks as we continue exploring the Entrepreneur Life.