How To Start A Business In 7 Simple Steps
There has never been a better time in history to start your own business. We understand that times are changing and economics are tough. People are becoming more and more inclined to branch off on their own and start a new business venture. But where do you begin? How does one even go about building a brand new business from scratch? We’ve put together a step by step guide on how to start a business in 7 simple steps. Let’s get started
1. Conduct Market Research
Before doing anything else you want to first determine if there is even a market for your new business idea. Economics revolve around supply and demand in the marketplace. If there is no demand for your product or service then simply put, you will have a full supply of it and won’t make any money.
Start by defining who you think would be interested in your product. Then search online to determine if there are other businesses doing the same thing. How many are there? What is the available market share? Try asking friends, family, and business contacts if they would see value in something like what you offer and gather feedback.
You can also run an online poll on social media or have a statistics company obtain the data for you. The purpose of all this initial research is to get saturated with everything that is already available. Find out who the competition is, what they are doing and if you can successfully carve out your o piece of the market
2. Write Your Business Plan
This is probably one of the things we see happen the most with start up business. They jump into the lake with both feet forward, nose pinched and naked as a jaybird. When you start a business without a well formulated business plan you are bound to get wet. 90% of all businesses fail within the first year with another 97% of those failing in the first 7 years. You must have a plan if you are going to succeed.
Some key things to include in your business plan are:
- Executive Summary
- Company description
- Market Analysis
- Competitive analysis
- Organizational structure
- Breakdown of products and services
- Marketing strategy
- Sales strategy
- Funding requests
- Financial Projections
3. Fund Your Business
Once you have a detailed plan and you know the market will readily accept you it is time to find funding for your project. At NeuWeb we always suggest building debt free if possible but there are many options for funding available through grants, local organizations, and government programs. Another way to secure funding is through angel investors or even better yet, a private investor with a knack for your industry. Wherever you get the funding just know up front that most business models require between $3500 – $15,000 to get started. Be wise with your spending and plan long term.
4. Pick A Location
You know what they say! Location. Location. Location. In our modern digital world, location can be a bit of an arbitrary thing. If you are a local business that requires a physical location for customers then choose wisely. Make sure that your brick and mortar establishment will be in a high traffic area where it will be seen. Conduct neighborhood research to make sure locals will use your services and that your new location won’t end up a flop because nobody cares about it.
Today however, many startups choose to start 100% online beginning with a website and investing in digital ads and SEO. In this way they are able to have larger marketing budgets as a start up and be found where people are searching. If you can avoid the overhead of a physical location we suggest you do it until it becomes a necessity for your company. In the case of NeuWeb Marketing we are able to service the entire globe from any location as long as we have a laptop and an internet connection.
5. Choose A Structure
All businesses need to have a legal structure. For most startups it is advisable to go with an LLC formation but you may want to look into other options like C-Corp or S-Corp entities depending on your business needs and number of investors/partners. The biggest thing about choosing a structure is making sure your personal liability and that of your investors is covered in the event you are unsuccessful or make business blunder. Research and choose wisely. Here is an excellent resource by the U.S. Small Business Administration.
6. Register Your Business & Get Tax Id’s
All businesses are required to pay taxes and unless you are just testing your idea with a DBA you will need to obtain a federal tax id and state tax id numbers in order to file appropriate taxes and be legitimate. This step is fairly simple and can be completed on the IRS website.
7. Apply For License and Permits
Finally the last step is to apply for any permits or licensing that may be required for your particular business. For example a local roofer will need to be certified and have a residential contracting license in order to legally operate in most states. Obtain liability insurance and make sure all your P’s and Q’s are taken care of before you launch.
Bonuses Tips For Starting A Business
- Open a Business Bank Account – You need to have an easy way to accept and make payments, get access to lines of credit, and build a financial base.
- Join a Networking Group – Just starting out can be hard to get new customers. One of the best ways to get in with the crowd is to join a BNI or local business networking group. These groups share ideas, leads, and help each other grow their local economies.
- Invest In Digital First – Having a website as a startup will pout you miles ahead of the game and running ads and doing active SEO will shorten the amount of time it takes to successfully grow your business.
So there you have it! Everything you need to know about how to start a business and dipping your feet in the pond without falling in. We trust you will be wise in your business ventures and wish you the best of luck with your new idea. If you’d like to learn more or have us help you launch a successful opener campaign, feel free to book a free consultation and we’ll get you headed in the right direction.