20 Steps To Start A New Business
Starting a business takes a lot, but it doesn’t have to be difficult. Here’s a checklist I’ve compiled to help you nail down exactly what you’ll need to do to turn your startup into a business. It’s pretty lengthy, but sometimes solutions are just like that.
1. Get the Support of Family and Friends
You’ve already decided to start this venture, now you need some support to get you through it. Friends and family can give you the stamina to persevere through all of the planning, form filling, and everything else to get the business up and running.
2. Find Mentors
These aren’t just people you look up to. These are trusted professionals, often in your field, that are there to guide you, advise you, and act as a sounding board to idea throughout the process. Mentors are invaluable when it comes to insight on how to succeed in business and expanding your network.
3. Pick a Name
Pick a striking name that people won’t forget. It can be to the point or memorable, but stay away from cute or funny names; you want to make sure you’re taken seriously.Make sure to double check that your name isn’t being used by another company by Googling on the state and national level. Once it’s chosen, register your name with your state government.
4. Create a Great Business Plan
Business plans are critical for starting a business. Not only do they help secure funding, buildings, and business approval by the state, but they also make you think about you business from an outside perspective. It forces you to look at the competition, see who want’s your product or service, and how you plan to run the business once it starts.
5. Figure out the Money
Starting a business isn’t cheap. Many entrepreneurs will save, take up second jobs, borrow, and work long hours to pay for the supplies for the startup. You need to know your budget and what out of pocket money you’re able to spend and find out how to secure financing for the rest, either through friends, family member, investors, or loans.
6. Determine the Legal Structure of your Business
What kind of business will you be? A sole proprietorship, corporation, s corporation, nonprofit? there are advantages and legal requirements for every kind, so researching the differences is important. They’ll also allow you to protect your assets and will outline the liabilities your business will have to answer for should they happen.
7. Apply for an Employee Identification Number
Also known as Federal Tax Identification Numbers, EINs separate you from your business. With it you can incorporate your business (should you decide to), open a bank account for your business, and avoid using your SSID for business necessities. In addition, the IRS requires an identification number for taxation purposes. Plus, it’s free to apply.
8. Investigate and Apply for Business Licenses
Depending on the type of business you have, you may need one or more business licenses. These are normally at the local level and are relatively easy to find. The SBA has a nice list. You can also check with your local government to check and make sure you’ve filled out all of the necessary permits and licenses if you aren’t sure.
9. Register for State ID
Whether you’re the only employee of your business or not, your business may need to be registered with the state that you’re operating in so that the appropriate taxes can be collected. Skipping it can cause headaches down the line.
10. Get Insurance
Many types of insurance are necessary to be in business. Worker’s Compensation (if you have employees), liability insurance, and business insurance (if you rent or lease) may be required. You might not need them all, depending on the size and scope of your business, but a list should be made to make sure you research, shop and apply for all that you need.
11. Get a Banking Account
It’s important to separate your personal finances from your business finances. More than that, some purchases will be too costly to purchase out of pocket, so a credit card or business line of credit can be a smart way to get what you need. Business accounts and credit cards can give you certain benefits that others may not. And once you get an employee or two, paying them through the business account is more professional.
You will need your SSN, ID/driver’s license, and bring all of your business papers (articles of incorporation, state business ID number, Federal ID number (FEIN), business license when you apply so everything goes smoothly.
12. Start Establishing Credit
Once you get the card, start using it. Often, banks and other lenders won’t loan money to you until the business has been open for 2 years and looking at your credit score. Make sure you can give them both.
13. Find an Attorney and Use Them
They can explain to you what legal steps you need to take to get employees, double check to make sure you’ve completed all of the necessary legal paperwork, and can explain what is expected of you as a business owner and employer.
14. Get a Bookkeeper or Financial Software Program
Nothing dooms a business more quickly than messy books. The good news is that there are numerous tax and accounting programs that are cheap, reliable, and trusted by many. Let the tech do the work for you, but make sure you have it in place once money starts flowing in and out of the business. Even if you don’t want to do the bookkeeping yourself, it must be done properly. You can hire a local person to do the monthly books and have a good CPA or accountant to do the quarterly and yearly filings that may be required.
15. Find a Place for Your Business
It can be at home, in a rented office space, or a building you have made. Most of them will need paperwork done and some will take longer to secure than others. Keep location in mind, too. Although some spaces may be cheaper than those in the busiest parts of town, being too hidden can really hurt your business.
16. Establish a Domain and Build a Website
These days, having no website can be a death sentence for startups. Most people use the internet, not the phone book, to find relevant information about businesses they’re looking for. You may want to consider getting one up on the web, so your business isn’t left behind. It isn’t hard to secure a domain and build a basic website, either. You can have a basic website up and running in less than a day and it costs very little. If that feels like too much or if you want something nicer, there are plenty of businesses that build websites for a living, Bravio Group included.
17. Get Your Brand Identity
Put attention to how you want your business to be perceived and construct logo ideas and color schemes. Business cards, while not as relevant as they once were, can be a quick and stylish way to present your business to other business people, potential clients, or customers. Hire a professional designer if possible and for now, concentrate on success and not perfection when it comes to your logo and company identity.
18. Refine Your Marketing Plan
You should already have a basic idea of how you’re going to market your business when you created your business plan; now you need to refine it. How do you want to show off your products or services? What demographics of people want them? How do you want to attract that target market? Nailing it down will increase your chance for success.
19. Network, Network, Network
Hand that card out to everyone you can. You never know what you can do for a person or what they may be able to do for them. Expanding your network is a sure-fire way to make sure your business says relevant and successful. Challenge yourself to host or go to events and connect with as many people as you can. For some tips, check out Keith Ferrazzi’s Never Eat Alone.
20. Open Your Doors and Have Fun
You did it; now it’s time to celebrate! Not too much, but do take the time to congratulate yourself for taking the steps to owning and operating your business. There will be challenges and obstacles to overcome that I haven’t covered here, but try to have some fun, enjoy being your own boss and watching the business grow.
My last bit of advice for the first-time business owner or entrepreneur is to make time away from the business for friends and family, use their support and that of your mentors, take help when it’s available, continue learning, and take care of your health. Owning a business is not a race - it’s a marathon that you need a lot of stamina and energy to reach your objectives and realize the potential of your new venture. Good luck!