Starting your own business can be scary, exhilarating, and challenging. And if you’re just starting, that might seem like a lot to take in all at once. Keep in mind that starting a business is also exciting and rewarding. There are so many opportunities as well as risks when starting a business. However, with some research and planning, starting a company doesn’t have to be as intimidating or overwhelming as some think. If you’re wondering whether now is the right time to start a business or not, check out the following article for ideas on how to get going today.
1. Evaluate your situation
Before you can even begin to think about how to start a business, you need to assess where you are and where you want to be. Do you have a specific business idea? Do you have a customer pain point you’d like to solve? If so, these are the first steps you should take to start your business. While the kind of business you decide to start will come down to your unique situation, there are some general areas to consider when considering how to start a business.
- What is your market size?
- Who is your target customer?
- What are their needs and wants?
- What is your Business model?
- How do you plan to generate revenue?
- What is the competition in your industry?
- How do you stand out from the crowd?
- What are the financing options for you to consider?
- Who do you need to network with and why?
- What are the business costs you can expect?
- What are the costs associated with starting your business?
- Where do you see your business ten years down the road?
2. Identify a customer pain point
Before you develop a good business idea, you need to identify someone’s customer pain point. The customer pain point is what you’ll use to create a customer relationship and build a business around. Once you’ve identified the customer pain point, start researching the customer needs to create a list of areas requiring your focus. Next, identify how your product or service could solve those problems.
3. Craft a business idea
Once you’ve identified a customer pain point and a specific way your product or service could solve that pain point, you can begin crafting your business idea around it. You can come up with a business idea around almost anything, but it’s essential to ensure it’s something that would interest people and satisfy a need or want. You can also look at what other people in your industry are doing and see what’s popular. Remember that customers will be more likely to buy from you if you can fulfill a need or want rather than just creating a product people didn’t have before.
4. Decide on a business name
Next, decide on a business name. A business name should be catchy, easy to remember, and meaningful to the public. When choosing a business name, you need to consider the name’s meaning and the impact the name will have on the people who see it. When choosing a business name, you also need to remember the type of business you’re starting and what your name will look like when abbreviated.
5. Write a business plan
Now that you’ve identified a customer pain point and figured out how your product or service could solve it, it’s time to write a business plan. A business plan outlines your needs to get your business off the ground and achieve financial expectations. When creating your business plan, outline the different ways you’ll need to get your business off the ground, such as obtaining funding and finding employees. Also, outline what you’ll need to do day-to-day, such as creating a marketing plan and determining a business spending budget.
6. Choose a business structure
Sole Proprietorship
A business entity owned and run by one individual – there is no legal distinction between the owner and the business. Sole Proprietorships are the most common form of legal structure for small businesses.
General Partnership
An association between two or more people in business seeking a profit. Partnerships can be created with little formality, but because more than one person is involved, a partnership agreement should be created. A partnership agreement stipulates the terms of the partnership by formalizing rules for profit/loss sharing, ownership percentages, dissolution terms, and management rights, among many other things.
Limited Liability Company (LLC)
A hybrid between a corporation, general partnership, and sole proprietorship. Owners of an LLC are called members. Members may include individuals, corporations, other LLCs and foreign entities. Most states permit an LLC with only one owner, called a “single member
Corporations (C-Corp and S-Corp)
Corporations are the most complex business structure. A corporation is a legal entity that is separate and independent from the people who own or run the corporation, namely shareholders. A corporation can enter into contracts separate from that of the shareholders, but it also has certain responsibilities such as the payment of taxes
7. Obtain federal and state tax ID numbers
Depending on what type of business you want to start, you’ll also need to obtain federal tax ID numbers and state business license numbers. You can get these from the IRS and state, respectively. Federal tax ID numbers are used for reporting business income and paying business taxes. It’s important to note that if you’re starting a new business, you’ll need to obtain these numbers.
8. Open a business bank account
Opening a business bank account is one of the most important things you can do when starting a company. A business bank account plays a key role in growing your business while protecting it and yourself at the same time. It allows you to keep track of business expenses, simplify tax reporting, and deposit payments under your company name
Moreover, a business bank account is a must if you want to accept credit card payments for merchandise or services. If you have an e-commerce business, you’ll need a business bank account to accept payments through your point-of-sale system.
9. Get business insurance
You’ll also want to look into business insurance to protect your business. You can get business insurance from various sources, including a commercial insurance agent, online insurance broker, or your homeowner’s insurance policy. Depending on the type of business insurance you want, you can choose between errors and omissions, liability insurance, property insurance, and business interruption insurance, among others. As you’re looking into business insurance, it’s essential to understand what each policy covers and what it doesn’t. It’s also important to know how much the policy will cost and whether it’s worth the money.
10. Market your business
Marketing is essential because it allows you to share your products and services with a niche audience strategically. It helps you tell, show, and prove to people how terrific your business is and how you can help them. You can also educate people on topics related to your business, including how to solve common problems and which solutions are best. When done correctly, marketing accomplishes the following things:
- It tells people what you have to offer
- It helps you get to know your target audience
- It helps your target audience get to know you
- It helps build trust with your audience
- It helps you grow your business and, more importantly, increase your return on investment.
Conclusion
It’s up to you to decide what your business will produce, sell, or which services it will offer – that’s exciting! Rather than following the formula of those who came before you, you’re looking at a chance to develop a concept or an idea that nobody else ever has. Even if you stay mainstream with your product or service, each day as an entrepreneur allows you to find new, outside-the-book ways to problem solve. Innovation and creativity are necessary traits for a successful entrepreneur, and you’ll hone those skills daily.
Knowing that each day brings new challenges, exciting opportunities, and a chance to engage your passion is reason enough to start your own business. Knowing that you’ve decided to take control of your own future is empowering. What are you waiting for? The time is now!
