Starting a business is an exciting prospect. But without guidance, it can be a daunting task. To succeed, you’ll need to build a solid foundation for your business and follow a concrete plan. Your choices early on are crucial to the long-term prosperity of your venture.
Following this guide will simplify the process and help you start building your business. We’ve compiled a quick and easy 6-step guide to help you become the proprietor of a successful startup.
Step 1: Develop Your Business Plan
Ask yourself what you want your business to accomplish, why, and how.
To make a strong, reliable business plan, you’ll need to:
- Define your service or product. What are you offering?
- Complete a market analysis- look into the specifics of the industry as well as your competitors.
- Create a company description that describes exactly what you will do.
- Determine your organization and management. Outline your company structure ahead of time.
If you find a market full of valuable prospects, your passion for success can carry your business.
Step 2: Create a Budget & Find Funding
Determine how much capital you will need to get your business off the ground and how you will obtain that funding.
The first step is creating a budget. Include your operational costs as well as legal fees for incorporating.
There are plenty of options when it comes to sourcing funding. Borrowing from a reputable business bank is a solid choice. Any interest incurred on your loan is tax-deductible and, once you’ve paid off this loan, you are under no obligation to keep doing business with the bank. Bank loans keep you in control of your company, instead of sharing ownership with stakeholders.
If you’d like to avoid taking a loan from a bank, alternatives like crowdfunding, grants, angel investors, partner funding or working with a venture capitalist might be better suited for your situation.
Crowdfunding through platforms like Kickstarter or IndieGoGo tends to work well for innovative, unique concepts. With an attractive marketing campaign and enough traction, you can fund your venture and build a consumer base in one fell swoop.
Partner funding and venture capitalists open your business to the influence of others. If you choose wisely, your business partner and investors can offer insightful tips beyond providing financial support.
Step 3: Choose a Business Entity
Registering your business as a tax-paying entity lets you reap many benefits and can protect your company against liability concerns. Even if your business is just starting out, consider that legal registration opens the doors for a bigger and more profitable venture.
First, choose your legal business structure.
During registration, you’ll need to declare what kind of entity your business is. This is how the IRS will recognize your business in regards to taxation.
- Choose sole proprietorship if you plan on owning and operating the business by yourself. Keep in mind that the success of your business can affect your personal credit score.
- A Limited Liability Company (LLC) helps protect your individual assets. It keeps yourself and your business separate in the eyes of business creditors and the IRS.
- A partnership extends liability to two or more people. Consider carefully how you will divvy responsibilities and ownership before legally declaring partnership.
- Registering as a corporation separates your personal liability from your company’s. There are several types of corporations to fit different business structures.
Next, register with the IRS.
Your business won’t be an officially recognized legal entity until you register with the IRS. This process looks slightly different depending on which legal entity you’ve chosen, but you can expect to fill out a few forms and pay some registration fees.
If you plan on having employees, register with the IRS for an Employer Identification Number. Doing this early on will streamline your growth later. Even sole proprietorships without employees can benefit from an EIN because it helps keep your business taxes and your personal taxes separated.
Step 4: Get an Insurance Policy
Without insurance, you could find yourself personally liable for expensive and unforeseen misfortune. Protect yourself and your business from costly incidents like theft, property damage, and lawsuits with an insurance policy.
General liability insurance is a good start, but there are other options that cover employee-related circumstances like worker’s compensation and unemployment benefits.
Depending on state regulations, you may need a varying level of employee insurance coverage. For example, your business could be responsible for medical bills and rehabilitation fees if an employee is injured on the job.
Step 5: Find An Accountant
With the right software, you can be your own accountant. QuickBooks is effective for day-to-day operations–you can review cash flow, manage payroll, generate reports, and even pay bills.
While many can serve as their own accountant throughout the year, a CPA or dedicated tax preparer can offer a great deal of help come tax season. CPA and tax preparers know how to maximize your deductions and minimize your liabilities.
Step 6: Advertise
Now that you’ve built the foundation of your business, you’re ready to attract clients. Create a marketing plan to help you brand your services. This is key to gaining traction and establishing trust between your business and its clientele. Your online presence is as important as more traditional advertising methods.
Consider your website and social media presence as an investment. A functional, professional-looking website will echo the legitimacy of your business. A responsive and aesthetically-pleasing social media presence attracts new clients and helps retain existing ones.
Pay Per Click (PPC) and search engine optimization (SEO) advertising are tactical and effective online marketing tools. PPC campaigns are customizable and cost-effective methods of targeted marketing online. SEO maximizes the visibility of your web presence and attracts more visitors to your site.
Billboards, flyers, and door-to-door marketing are ways to invest in a community-based clientele. If you’re passionate about serving the local area, these options make for a good strategy.
Bookmark this page and use our guide when starting your business. You’ll find our quick-and-easy guide offers the foundational details you need to launch your startup and find success with your business.
