Whoever told you that starting a business was easy, was probably joking (we hope!) – because it is not. And for context, we are talking about creating a business before you can actually start your business. Are you confused yet?
When you decide to embark on the exciting world of entrepreneurship and being your own boss, we highly recommend a few key steps that will make sure you’ve set up a good foundation for success. And trust us, the first intuition that many want to fall into is to get a website up and running and start making money. However, take a deep breath and start acting on a few key steps.
Look at the competition
First things first. Whichever industry or niche you want to pursue, and something that is highly overlooked, be sure that you understand the competitive landscape. Who are your competitors? How do they market themselves? Where are they located? How do they present and sell their products and services on their website or online store (which, by the way, will also give you good ideas on how to create your own website)? In this initial step, don’t forget to also look into your local competition, especially if your services primarily cater to local communities (vs. an online website store which can broaden their scope domestically and even internationally).
Why do this? Well, because there’s nothing more valuable than understanding who have to compete for products and services you’re introducing to the market. And the key here, is that it’ll allow you to think how you can create a competitive advantage and win customers over and over again.
Goals, goals, and more goals
Next up is to make sure you have a business plan. And let’s be real, unless you have plenty of spare time, we’re not talking about pages and pages here. The key is to make sure you understand what’s your vision – e.g., where do you want to be a year, 3 years, 5 years for now. Jot down these goals even if they’re not fully flushed out. Another important aspect to think about is how to plan to structure your business, run, grow and evolve – for example, are you hiring any employees, freelancers to help you? In addition:
- Describe your business – what are the services and products that you’re selling?
- Attracting customers – what is your marketing strategy to gain sales? Will you be using social media, ads, word of mouth, attend events and roadshows, etc.?
- Understanding finances – how much initial capital investment do you have? Are you self-funding or planning to raise money (i.e., crowdfunding)? Or is an investor going to help jump start your business? Perhaps you’ll get a loan to get things started?
- Look at your competition – refer back to the previous section as this will give you great insight on how you should get your business started.
- Other considerations – there’s so much to think about, such as choosing the location(s) of your business (if needed), getting legal advice, and of course, getting your website launched (which you guessed…there’s where we come in).
And by the way, there’s also plenty of business plan templates out there you can download and tweak for your needs. Here’s a nice one to look at.
Choosing the business structure
Now that you’ve done most of the initial homework, it’s time to choose how your business will be structured. And to be clear, this needs to be done regardless of whether you are running a website business (online store) or brick and mortar business.
There are a handful of structures you can choose from, but here are a few to think about:
- Sole proprietorship – this is the easiest and simplest business to set up, and in this structure, you’re considered to be the only owner. This also means that personal assets and liabilities are not separated out from business assets and liabilities. And you can also choose a trade name (such as Doing Business As, DBA) so that your business name is not your name, for example. This is a great option that provides low risk and can be best suited for a small business being run by you and only you.
- Partnership – as the name implies, this is when two or more people are going into the business together. This is a great choice for the type of business structure that combines two or more owners with share responsibility– say you and a good friend that you trust.
- Limited liability company (LLC) – this is perhaps one of our favorite structures, because it protects personal assets and liabilities from business assets from liabilities (contrary to a sole proprietorship). With a LLC, you’re also able to have two or more owners. This structure is a good choice for small, medium business with some higher risks at stake.
- Corporation – also known as C corp, this structure separates its owners and is considered a legal entity. As such, C corps are taxed are subject to being legally liable. In addition, cost to maintain this type of business is higher and required a more rigorous operations infrastructure, reporting, etc. This is definitely a great choice for medium to large business that want to eventually want to go public with shareholders.
- S Corp – this is essentially a special kind of corporation (c corp) but it’s structured in a way that avoids the double taxation that happens with C corps but this type of business also needs to meet certain eligibility requirements. This is a good choice for businesses that would be a C corp but that qualify as S corps.
Aside from these structures, there are a few other to consider. To learn more about business structures, we recommend checking this page. And off you go!
More business stuff
As you continue on your journey to start a business, there are a few more critical things to consider.
- Choosing your business name – this is the fun part…be creative but also don’t overthink it. At the end of the day you want to make sure your future leads will want to know the products and services you provide right away by reading your business name or visiting your website. Pro tip: make sure that the web domain is available as the last thing you want is to create a business name where the website domain is not it – yikes!
- Registration – now it’s time to register your business with your state and federal government. In here, please be sure to check the rules and regulations of the state you live in to see what requirements are needed to get you up and running without any hiccups. For more info, check this article out.
- State and Federal tax IDs – again, depending on your business structure, state and federal regulations, you’ll need to secure these type of IDs for tax purposes, paying employees, etc.
- Licenses & Permits – though not the most exciting part, applying for licenses and permits is critical in ensuring your business is legally compliant. And the type of licenses and permits necessary vary by state, industry, location and other variables. Here’s a great checklist to start off with.
- Bank Account – now to the fun part, is opening a business account so the money can flow in, right? Consider a business checking account, debit cards, and credit cards that will give you some purchasing power to start your business.
Identify your support system
As you probably sensed by now, starting a business is no small task and we sure hope we didn’t scare you away! With hard work comes many great things too. An important aspect that many business owners forget include:
- Ask family and friends for help – whether it’s moral support, donations, etc. Maybe just letting you vent your frustration while grabbing a cup of coffee is what you’ll need not to be discouraged. Either way – don’t be shy and rely on people that matter the most to you during this new chapter.
- Join local groups – you’ll be surprised that the city or town you live in may have many resources that allow you meet other business owners that are getting started like you or that are already successful that want to share their experience. Whether it’s a Facebook group, or monthly meetups, make sure to participate and know that you’re not alone in this journey. You can also find local assistance in this page, which lots of free resources.
- Check out free webinars – just as the above, there is plenty of webinars (including free ones!) that you can attend pertaining to small businesses and your industry. Here’s a good start.
And at last, be real with yourself
Don’t be so hard on yourself. After all, no business will ever be a success overnight (well, with a few exceptions) and it takes a lot of time and effort. One approach that often helps, is to break things into smaller chunks of activities. Set real goals for yourself every day and you’ll see that much progress will be made if you follow it rigorously – and for this we recommend the SMART goals approach.
As mentioned earlier, make sure you have a strong support system that can be your reality check, emotional support and hey, maybe even a future investor!
Need help starting a business?
Phew…that was a lot of information! If even after reading this you feel like you could use professional help, the that’s okay. Maybe you also don’t have the time (or patience) to deal with all the paperwork that goes along with setting up your business. A great resource we recommend is LegalZoom. There are tons of great resources there that will help you learn more about starting a business.
Useful Resources
There are tons, and we mean TONS, of stuff out there that will help starting your business journey. Here are a few that we enjoy, some of which has been used throughout this article.
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