More and more entrepreneurs are starting their own businesses every year, so why not make 2022 the year you start your own small business? As long as you have a profitable business idea, you’re already on the right track. You’ll have all the tools you need to start your business venture in the following guide.
Step 1. Research your idea.
So you have a business idea. How do you know if it’s a good one? Answer the following questions to help vet whether or not your business idea is worth pursuing:
- Has this been a long-term or short-term passion?
- Do your skills coincide with your business idea?
- What are you selling?
- Is there a lot of competition?
- Is the business idea profitable enough?
- Are you going to pursue a business partnership or go it alone?
Step 2. Write a business plan.
A business plan is a roadmap for everything about your business, from accounting to marketing. But what exactly will your business plan have to include? We’ve listed the most important elements you need in your business plan below:
- Executive summary
- Company description
- Market and customer analysis
- Operations, logistics, and management
- Products or services
- Sales and marketing strategy
- Financial plan
- Exit strategy
Step 3. Select a business location.
Where your business is located is extremely important if you plan to have a physical location. Consider the following factors when selecting your business location:
- Style of operation: is your business online or in-person?
- Demographic: is your customer base local or all over the country?
- Foot traffic: does the physical location you have selected have a lot of foot traffic?
- Accessibility: Are customers of all backgrounds able to enter your store?
- Proximity to competition: Are there any competitors closeby?
Step 4. Get business funding.
Now that you have a plan for your business, you’ll need to fund the first few months of business before you break even and make a profit. Below are some different methods you can use to raise business funding:
- Investors
- Loans
- Grants
- Bootstrapping
- Crowdfunding
Step 5. Choose a business structure.
Legally registering your business with the state is arguably the most important part of starting your own business. There are many different business structures to choose from which provide tax advantages or liability protection. We’ve listed the different types of business structures you can choose from below:
- Sole proprietorship: for single owners who are responsible for all debts and obligations
- Partnership: for business partners who are personally liable as business owners
- Limited liability company (LLC): for business owners who are looking for easy setup, less fees, simple maintenance, and tax advantages
- Corporations: for businesses that are separate legal entities, good for appealing to investors
- Nonprofits: for businesses that only use donations to fund operations and are exempt from taxes.
Step 6. Register your business.
Once you’ve selected a business structure, you can register your business with the following steps:
- Register your articles of incorporation with the state department.
- Appoint a registered agent who will handle your legal paperwork.
- Get an employer identification number (EIN) from the Internal Revenue Services (IRS)
Step 7. Manage your business finances.
Another crucial step in establishing your business is organizing your finances using the following methods:
- Open a business bank account
- Get a business credit card
- Do the necessary accounting
Step 8. Get business insurance
If disaster strikes, make sure you are prepared by obtaining business insurance. The most common types of business insurance is general liability insurance, workers’ compensation insurance, and professional liability insurance.
Step 9. Obtain business permit and/or licenses
You will most likely need a business license or permit to operate your business. Common business permits are business operating licenses, DBA permits, zoning permits, or home occupation permits for home businesses.
Once you have completed the 9 steps above, you are ready to start hiring employees and marketing your business! For more details on how to start your own small business, check out this infographic from SimplifyLLC.
