Start a business in 8 steps.
The Big Idea
How will your business solve the problem? Who is your target audience? Why is this a viable option for people? Start brainstorming a business name. Need ideas? Check out BizOp for business ideas and opportunities.
Write a business plan
A business plan is the roadmap, guiding you through starting your business. Conduct market research to establish your business focus, help secure funding, and attract executives. What solutions already exist? Who is your target customer? How will you market your business? What are your short and long term goals? What challenges exist? How will you tackle them? What is your exit strategy if things don’t work out? Create a pitch to effectively sell your business to potential investors.
Analyze your finances
How will your business be financially viable? What are the costs involved? Perform a break-even analysis to determine the minimum you will need to avoid losing money:
Fixed Costs ÷ (Average Price – Variable Costs) = Break-Even Point
How will you price your goods/ services to be profitable? Will it be a physical store or online?
You will need to decide on your funding options:
- Business loans
- Business grants
Determine your legal business structure
In sole proprietorship, you own the business entirely by yourself and will be responsible for all debts and obligations.
In a business partnership, you and your partner(s) will be responsible together. Finding a partner with complementary skills (business skills to your creativity, etc.) is recommended.
In a corporation (e.g. S, C, or B corporation), you can separate your personal liability from your company’s.
According to LLCRatings.com — the limited liability company (LLC) option provides a hybrid structure that has the legal protections of a corporation, but the tax benefits of a partnership.
Each structure has its own benefits, responsibilities, and legal guidelines to consider.
Register with the government and IRS
Corporations will need “articles of incorporation” and operating agreements. Otherwise you will need a DBA (doing business as) name to officially register your business.
You may need an Employer Identification Number (EIN) from the IRS if you have other employees (including a partner), may have them in the future, need to open a business bank account, or want to separate personal and business taxes.
File the specific federal and state Income Tax Forms for your business structure. Some businesses may also require federal, state, and local licences and permits. Research accounting softwares to keep track of everything.
Build your team
Finalize the people part of your business. What roles will you hire? What compensation, benefits, etc. can you afford? Perform comprehensive reference checks, draft employment agreements, and consider Intellectual Property Protection agreements to protect your company. What roles/ duties will be outsourced to vendors?
Create a marketing plan to build your brand and ensure you have a following before your product/ service is available for purchase. Take time creating your company website, social media platforms, logo, and CRM software (customer information database, email marketing, etc.).
Pick a day and launch. Congratulations! You’ve successfully started a business.
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