It’s not easy to start a new business.
Businesses that survive and thrive have an unfair advantage. They’re started and run by people who are prepared for what’s ahead of them.
If you want an unfair advantage, we’re here to share 5 of the 12 steps you’ll need to know to get started. And if you like what you read here, be sure to read the complete 12 step guide on how to start a business.
Develop and refine your idea
Think about how you can integrate your natural skillset into your business so that you can stand apart from your competition. Ask yourself:
- What skills set me apart?
- What is the purpose of my business?
- Who am I providing a service or product to?
- What is the maximum figure I can safely spend on this business?
- Do I need outside capital? How much?
- What kind of work/life balance am I looking to achieve?
- What are my expectations of being an entrepreneur?
You’ll also want to consider what specific niche is right for your business. Here are some niches to consider:
- Restaurants – Narrow your focus with specific patrons in mind.
- Clothing brand – If you’re interested in the apparel industry, here’s a terrific guide on how to start a clothing brand.
- Real Estate – Are you a brokerage catering to retirees? Are you selling vacation homes? Are you an expert in short sales?
- Retail – Are you selling novelty toys? Rare automobiles? All natural candles? Vintage candy?
- Legal – With so many areas of law to practice, it’s helpful to position yourself as an expert in a specific field.
- Landscaping – Are you more of a mow and go company, or are you catering toward elaborate garden design? Maybe you work extensively with patio building. Pick an area and play it up.
- Consulting – Do you have a ton of expertise in an area and want to help others? Here’s a terrific guide on how to start a successful consulting business.
Whatever niche you choose, make sure you’re passionate about it.
Write a business plan
A business plan can help you to crystallize your ideas. It outlines the financial and operational goals of your business and provides a specific strategy that shows how your company will reach those goals.
Your business plan doesn’t need to be 100 pages long. Keep it short and concise and focus on the key details.
Studies show that entrepreneurs who take the time to write a business plan are 2.5 times more likely to follow through and get their business off the ground.
Don’t get obsessed about getting every detail right in your business plan. Barry Moltz, a small business expert, speaker, and author, tells us that:
The business never turns out exactly as it seems when you get started. There are always unexpected hurdles. The biggest ones are typically a sales pipeline, people, cash and productivity.
For more information about how to create a business plan, the Small Business Administration has you covered.
Decide your legal business structure
Here are some of the typical business structures you should consider:
- Sole proprietorship – this is the most basic business entity. A sole proprietorship means that one person is solely responsible for a business’ profits and debts.
- Partnership – A partnership is a shared responsibility between two or more people who both hold personal liability for a business.
- Limited Liability Company (LLC) – a structure that permits owners, partners or shareholders to limit personal liability, but still includes tax and flexibility benefits associated with a partnership.
- Corporation – this is an entity legally considered separate from its owners. That means that corporations are permitted to own property, can be held liable, must pay taxes, and may enter contracts.
Be sure to look at which entity will work best for your current needs while still considering any future business goals. The SBA is a great resource if you need more information.
Once you decide on your legal business structure, be sure to register with the government (typically your state and sometimes, your municipality) and the IRS:
- You can find a full list of the forms for each type of entity on the SBA website. You can also find state-specific tax obligations on the same site.
- Remember to contact your municipality to see if there are any local licensing or registration requirements.
- You may also need to get an employer identification number (EIN) from the IRS. If you’re a sole owner and don’t have employees, this is not required. But you might want to get an EIN anyway to keep your personal and business taxes separate and to be sure that you can quickly hire when the time comes to expand your business. The IRS has a useful checklist to help you decide whether you will need an EIN to run your business. If you do need an EIN, you can register online for free.
Create a strong brand identity
A strong brand identity is the most effective way your new business can gain a competitive edge in an increasingly crowded marketplace.
Ask yourself these important questions:
- What identity/personality do I want my business brand to project?
- Who will want or need my products or services?
- What can customers get from my products or services that they can’t get anywhere else?
- What can customers get from working with me that they can’t get anywhere else?
- What are my brand values?
- What is the most important part of my customers’ experience?
Your answers to these questions (and others like them) will build the core of your brand. All of your future branding decisions should expand on these ideas. Your company name, your company logo, and your website design should all grow from the concepts you laid out here.
Build your team
For your business to scale and grow, you’ll need help.
Start by hiring for positions that provide the most immediate benefit to your business.
You may want your first hire to be a part-time assistant. Look for someone who is a jack-of-all-trades, eager to learn new skills, with a strong work ethic.
If you’re new to marketing, a marketer can help you strategize your business.
If you’re not confident with the manufacturing process, hire a manufacturing liaison.
If you’re finding it a challenge to keep up with orders, a fulfillment manager might be just what you need.
If you need help with employment or contractor agreements or agreements with your vendors, take a look at Quickly Legal, which offers entrepreneurs, small businesses and startups an easy and inexpensive way to create, sign and manage legal contracts and agreements, with many agreements that you can start using right away.
There’s a lot to think about when you’re starting your own small business. These steps will give you an unfair advantage and will help get you started on the road to owning a successful business of your own.