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Starting your own business can be a rewarding way to bring in more income and have something to call your own.
A lot of people start their own businesses because they just can’t stand the thought of spending their lives at a 9 to 5, trading time for money.
If you really want the financial freedom to live life on your own terms, starting a business is one way to do that.
Depending on what kind of business you start, you may work more or less. Some businesses can be run with a minimal time commitment and some might require that you work more than an average job.
You’ll have to decide the kind of business you want to run and figure out whether spending 60 or more hours per week building a business is something you’d be able to commit to.
If not, you might be better off choosing a business that can practically run itself.
Either way, starting your own business requires work no matter what. If you’re ready to put in that work, then the following information can help you set goals and start a business you can be proud of.
Below are 10 steps you’ll need to take to start your business.
1. Figure Out What Kind of Business You Want to Start
The first step is to think about what kind of business you want to start. Obviously, you can’t start the business without thinking about this. You can’t just sell any and everything. You have to narrow down your focus so that people understand who you are and what you’re selling.
So do a little bit of brainstorming and come up with a list of business ideas that you think you’d want to learn more about.
There are businesses that are doing well, despite the current state of things and they include businesses like:
- E-Commerce Business Selling Essential Items
- Digital Information Products Business
- Coaching Business
- Cleaning Business
- Professional Delivery Business
- Meal Prep Delivery Service Business
Spend a little time thinking about what kind of business you’d be interested in starting and begin learning all you can about it. The more you know, the more prepared you’ll be when the time comes to put your ideas into action.
2. Come Up With a Name
Once you know what you want to do, come up with a name for your business. Before you decide on one, make sure you look it up to see if it’s already been taken by another business.
The last thing you want is to get sued or receive a cease and desist notice for operating your business under a name that’s already taken by another business.
You also don’t want to confuse your customers or theirs into thinking you’re the same company.
That’s why it’s important to complete this step as soon as possible.
The best way to do this is to go to your state’s business filing agency website and search for your intended business name.
But if you’d rather not do the legwork, Legal Zoom has a service in which they search corporate names, state trademarks, common law trademarks, and internet domain names for about $299.
3. Make It Legal
If you don’t want any trouble with the IRS, make your business legal as soon as possible. Once you know that your name is available for the taking, start researching your options for how to make your business legal.
There are several legal business structures to choose from, which include:
- Sole Proprietorships
- S Corporations and C Corporations
- Limited Liability Companies (LLCs)
Sole proprietorships are made up of one person — the person who owns an unincorporated business by his or herself. A lot of new business owners start out as sole proprietors because it doesn’t require you to fill anything out with the state or federal government. And since sole proprietors aren’t treated as taxable entities, they can legally file a personal income tax form with a Schedule C when tax time comes around.
Partnerships are businesses started by more than one person, according to the IRS. In a partnership, each person is equally liable in the event that your company gets sued. Some consider partnerships to be the most flexible type of business structure for companies owned by more than one person. When it comes to filing taxes, each person that’s part of the partnership has to file Form 1065 with their personal tax returns.
Corporations are legal entities in the eyes of the law, which means they can bring lawsuits, be taxed, buy and sell property, and commit crimes. A corporation, like an LLC, protects its owners from any personal liability when it comes to obligations and corporate debts (but to an extent). A corporation is owned by shareholders and managed by a board of directors and the shareholders are responsible for electing the directors (and they appoint the corporate officers).
S Corporations are separate legal entities with fewer than 100 shareholders. S Corporations function like partnerships but offer owners more legal protection (however, your liability is still limited). Incorporating an S Corporation is pretty tedious. With an S Corp, you’ll get pass-through taxation, which means you and the other owners have to report each of your shares of the profit and loss on your individual tax returns. While S Corps provide investment opportunities and only have to file taxes once a year, if you accidentally miss certain filing requirements, your S Corp status can be terminated.
C Corporations are formed and regulated on a state level and to form one, you’ll have to file an “Articles of Incorporation” with the Secretary of State. You should consider a C Corp if you want to be attractive to potential investors, you plan on having a larger business, or you want to publicly trade shares eventually. Most major businesses in America are structured as C Corporations. A C Corporation comes with limited liability, enhanced corporate credibility, and fluid ownership (can be a single owner or multiple owners). With a C Corporation, it’s easier to raise money through an IPO. However, forming a C Corp means double taxation for investors and extensive legal requirements.
Limited Liability Companies (LLCs) are a cross between a partnership and a corporation. An LLC gives you the most protection in the event that you get sued. If that happens, no one can come after your personal assets. In general, the IRS usually treats LLCs like sole proprietorships or partnerships, unless the LLC owner asks to be taxed like a corporation. Reporting requirements for LLCs are a bit laxer than they are for a corporation.
4. Create a Business Plan
Once you know the structure of your business, you’ll need to create a business plan. Each section of your business plan should be as detailed as possible.
In the business plan, you’ll have to:
- Describe the Business (Write a Mission Statement, Summary of the Business, Legal Description, Competitive Edge)
- Describe How You’ll Manage the Business (What’s Your Marketing Plan?)
- Discuss How You’ll Operate the Business (Employees, Compensation, Vendors, Accounting, etc.)
- Describe the Risks and How You’ll Manage Them
- Develop a Financial Management Plan
If you need help with this, I’ve got a business plan template you can use to guide you. It gives you all of the information you need to create a great business plan pretty much from scratch.
Once you know what kind of legal structure you’d like for your business, consult with a lawyer, or start taking steps to legalize your business on your own.
You might decide to go through a company like Legal Zoom or Incfile (the one I used). Or you could opt to file all of the paperwork on your own, which is the cheapest option, but also the one that may cause the most headaches. Find an approach that works best for you and get the ball rolling as quickly as you reasonably can.
5. Get the Right Permits and Licenses
Check your area’s local and state requirements for permits and licenses for the type of business you plan on opening. If the business you want to open requires permits and licenses, apply for them as soon as you can. The longer you wait, the longer you’ll be technically operating illegally, which is something you don’t want. So find out what permits and licenses you need and start saving for the associated costs.
If you’re opening a business with a physical location, like a beauty salon or barbershop, you’re definitely going to need permits and licenses. But if you’re running an online business from home, you might not need any permits and licenses, depending on where you live.
Whatever the case, check with your state and local governments to ensure you’re operating your business legally.
6. Create a Website
After all of that boring legal stuff is out of the way, you can finally start to focus on your business and get everything set up.
That means setting up your website so people know where to find you when they’re ready to make a purchase.
The first step is to choose a domain name. It should reflect your business name or what you do. It should be short, sweet, and to the point. Long domain names are ugly and easily forgettable. So choose one that meets these criteria.
Now it’s time to buy your domain name.
Once you have your domain name, sign up for web hosting. There are several options when it comes to website hosting. Two of the most popular hosting sites are Blue Host and Site Ground. A lot of business owners and bloggers start out using Blue Host, but some say Site Ground is better.
To do that, sign into your Name Cheap account, select Domain List from the left sidebar and click the Manage button next to your domain name.
Find the Nameservers section and choose your preferred option from the drop-down menu. Then, click on the green checkmark to save your changes.
On Site Ground, you can find your name servers by going to the user area, finding My Accounts, and you’ll be able to see them under the Information & Settings tab.
7. Figure Out How You’ll Fulfill Orders
If you’re going to be selling physical products, you’ll have to figure out how you’re going to approach the sales fulfillment part of the business. That means determining whether you’ll physically ship out the products yourself or whether you’ll go through a supplier and drop-ship your products.
You might consider using Amazon to sell your products. In that case, you’ll have to ship your products to Amazon and they’ll fulfill your orders when someone buys something.
Or you might want to use Etsy to sell your products, depending on what you’re selling. If you’re selling arts, crafts, t-shirts, or other handmade items, Etsy might be a good place to start.
Whichever method you decide on, make sure you have everything you need to fulfill orders, such as:
- Packing materials and office supplies (boxes, envelopes, shipping labels, tape, scissors, etc.)
- Printer (to print out invoices)
- Marketing materials (like business cards to put inside each package for re-ordering or coupons)
Make sure to ship out your products in a timely manner if you’re going to be handling that part on your own.
8. Create a Marketing Plan
Creating a marketing plan means coming up with a business summary and business initiatives, determining your target audience, and figuring out your marketing strategy. You’ll also want to write down what your budget is for marketing.
After you’ve written out that part of your plan, start thinking about the ways you’ll market your business. There are tons of ways to do it these days, which includes using methods like:
- Social Media
- Influencer Marketing
- Email Marketing
- Content Marketing
- SEO and Website Optimization
- Business Cards
- Landing Pages
- Paid Ads
In addition to using these methods, you’ll also want to define your marketing message by coming up with a USP (unique selling point). In other words, what makes your product stand out from the rest? What makes customers want to buy from you instead of the competition? What problems will your product help customers solve?
HubSpot recommends conducting a SWOT analysis before you create your marketing plan.
Ask yourself what are your strengths, weaknesses, opportunities, and threats.
You should also have an understanding of the current market for whatever industry you’re going to be in. How do you measure up to your competitors? What are they missing in their approach to these types of products? Can you potentially fill in that gap and give customers what they want?
Think about using HubSpot’s Inbound Marketing, Sales & Service software to help you navigate things more efficiently.
If you want to create a more comprehensive marketing plan, it can help to define your target audience. Who is your product intended for? Middle-aged businessmen? Stay-at-home moms? College students? Retirees?
Defining your target audience can help you tailor your message to those types of people. Creating buyer personas can help you determine who your ideal customers are, which might mean conducting a little bit of market research.
Your buyer personas should include things like:
- Lifestyle & Family Situation (Married, kids, etc.)
- Business Background
- Education Level
- Challenges/Pain Points
- Where They Hang Out Online or Search for Information
- Purchasing Behavior
- Personal Attributes
Check out a few buyer persona examples so you can get an idea of what kind of personas you want to create and how detailed they should be.
You’ll also want to create SMART goals that help you define clear, actionable goals. SMART goals are:
- Specific – Be as specific as possible when writing your SMART goals, including as much detail as possible about what you want to achieve.
- Measurable – Your goals should be measurable, meaning you should assign a numerical value to it so you know whether you’re on track to meet them (Ex: I want to get 1,000 more followers on Instagram this month)
- Attainable – Make sure your goal is reasonable and attainable. (If you only have 50 followers, you might not make it to 1,000 in a month. Instead, aim for about 100 to 200 more followers for the month. Then, increase the number each month.)
- Relevant – Create goals that help you move in the right direction, goals that are relevant to your mission and objectives.
- Time-Bound – Set deadlines for your goals so that you move toward them swiftly instead of taking your time.
Once you have your SMART goals written and your buyer personas to represent your target audience, you’re ready to start marketing.
After you’ve begun marketing your business, track how well the methods you’ve chosen are working for you. That way, you can alter your approach if need be or cut out certain methods altogether. For example, if you find that you’re getting more engagement on Instagram and not having as much luck on Facebook, you might want to focus more on Instagram.
9. Get the Equipment & Software You Need
If your laptop is more than six years old, you should probably consider investing in a new one for your business. Or if you don’t have a printer to print out important documents, you should definitely invest in one. In fact, make a list of all of the things you might need to run your business successfully, whether that means getting furniture, office supplies, or software that makes running and managing your business easier.
You might want to get some accounting software like Freshbooks to help you with the financial side of things. Or you might want to get a desk and chair for the new office space you carved out in your living room.
If you have office space outside of your home, or you have a physical business location, now’s the time to start ordering furniture or other equipment you might need. Google what you might need and start collecting them so that you can successfully run your business, but don’t go overboard in the beginning. Just getting the basics is good for now.
10. Launch Your Business
After you’ve done all of the above, the final step is to launch your business.
You have all of your ducks in a row and you’ve taken the necessary steps to ensure your business is successful.
Set a launch date and get ready prior to your launch. Make sure that your website contains all the information your customers might need to make an informed buying decision, and that you answer any questions they might ask in the FAQ section.
Make sure your products are ready to be packaged and shipped and that you’re ready to start processing orders that come through.
Let everyone know that you’ve launched a business if you haven’t already and ask them to tell people they might know who might need your products or services.
Once you’ve launched, ramp up your marketing activities and keep a regular marketing schedule so that you can really get the word out about your company and its products or services.
If you found this information useful, feel free to share it on social media and with your friends or family.
Let me know in the comments what information was most useful and what you’d like to know more about.
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