Entrepreneurship is a potentially rewarding venture if handled with the correct approach. It is vital an entrepreneur is passionate and informed to support the longevity of their business. If you’re looking for a guide on how to start a small business – you’ve come to the right place!
Step 1: Research the business idea
The best place to start is researching and evaluating your business idea. First, you should ask yourself about the competition in this industry, its feasibility, and the business model. Then, consider assessing these using feasibility studies.
Step 2: Write a thorough business plan
Next, creating a business plan provides information about the operations and gives investors a resource to invest in your business. A business plan should include an executive summary, market analysis, and financial plan.
Step 3: Find where you want to business to be located
Once you’ve created a thorough business plan, you can select a business location. Whether you decide to have a home-based business or physical location, it’s essential to consider the following aspects when evaluating a potential business location:
- What is the style of operation? Is it a brick-and-mortar store or an eCommerce store?
- What is the demographic of your customers? For example, are they young adults who prefer to shop online or older populations who prefer brick and mortar stores?
- Does the physical location receive a lot of foot traffic?
- Is your business accessible to people with disabilities and the elderly?
- How close in proximity are you to the competition?
Step 4: Find funding sources for your business.
Now that you’ve found a place to house your business, you will most likely need funding to support your business for the first few months while you work towards earning revenue. There are many ways to raise business funding, such as bootstrapping, crowdfunding, taking out loans, applying for grants, or even seeking investors.
Step 5. Select a legal business structure
Legally registering your business with the state will require you to choose a business structure. The different types of business structures available are as follows:
- Sole proprietorship: best for sole owners responsible for all financial liabilities.
- Partnership: best for business partners who are personally liable as business owners
- Limited liability company (LLC): best for business owners looking for easy maintenance and tax advantages
- Corporation: best for businesses that are separate legal entities with shareholders as business owners – corporations are most attractive to investors
- Nonprofit: best for organizations that are solely funded by donations and are tax-exempt
Step 6: Register your business with the state
To make your business come to fruition, you will need to register it with the state using your articles of incorporation. This includes, but isn’t limited to, registering your business name, legal business structure, and an operating agreement if you are registered as an LLC.
Other steps that should be taken to finalize registration include getting a registered agent who handles all your legal paperwork and obtaining an employer identification number (EIN) for tax purposes.
Once you’ve taken the above steps, you are ready to start doing business! Business owners will often take other steps to open a business bank account or credit card, purchase business insurance, or obtain necessary business permits and licenses, depending on your business industry. For more information on how to start your own business, check out SimplifyLLC for everything you need to know.