Many people have dreams of starting their own business but are intimidated by all of the steps needed to start their business legally. Whether you are deciding to start your business to have more time with your family, have more control over your finances, or the freedom to work for yourself, the steps to starting don’t have to be that scary.
Keep reading for the first 5 steps needed to start your business!
Step 1: Research!
This is the most important step, hence the reason it’s number 1! Research is the most important part of starting a business, no matter what type of business you’re looking to start. There are a few aspects that are important to know before you begin. The most important being: the need for your business in your area or for the people you are planning to sell to.
If you are planning to sell products or provide your service locally, do some research to find out if people have been searching for this particular service/ product and how often. If you’re planning to provide your service online then get an idea of how many people you will be able to reach and how.
Answering these questions will also lead you to decide who your target market will be. Before you start your business it is best to know about your audience. Think about who will benefit most from your products or service and if a good amount of them are actively searching for it. If your target market does not need your type of business then you may have to think of a new target market or rethink your business idea. It is important to research your market and know your audience very well for the next step of starting your business.
Lastly, research your competition. Find the businesses that are offering the same services or products as you and keep their style and offerings in mind. It’s not a good idea to copy your competition but it is important to recognize what works for them and how their audience responds (especially if you have the same target market as them).
Step 2: Create your business plan and marketing strategy
This step will be the foundation of your business. You won’t have much success if you don’t have a plan, and your plan should be clear and detailed! A proper business plan and marketing strategy will help guide your company from the beginning stages and lead you to the growth you hope to see.
Your business plan should be a detailed explanation of who, what, how, and why. What products/services do you plan to provide? Who do you plan to offer them to? How do you plan to provide your products or service? Why are you offering this product/service and how will it benefit your audience?
Determine the vision you have for your business and come up with a mission statement. Make sure to also write down the goals you have for your business. You can set weekly, monthly, quarterly and yearly goals.
Your marketing strategy will determine how you will reach your target market and promote your business. This is the reason it is important to know your target market well. You should know them as well as you know yourself so your marketing strategy is efficient. Know their demographics, interests/hobbies, and their preferred social media platforms. This will give you an idea of how to get their attention through your marketing strategies and how and where your marketing strategies will be seen the most.
Step 3: Name your business
Now it’s time to name your business!
Before making anything official, make sure to first check for the availability of your name. Check to make sure it isn’t registered, trademarked, or in use on email and social media platforms. It is also best to research the requirements of obtaining a business name specific to your state because many states have different requirements.
Overall you will first want to register your business’ name through your state, (when you’re financially ready) trademark your name through the government, and possibly register for a DBA if it is required in the area you are doing business in.
After completing the proper registration for your business name, make sure you register for a domain name and secure your name on social media and through email before it’s taken.
Step 4: Determine finances
Next, it’s important to determine how you will finance your business. One reason many businesses fail is because they run out of the finances necessary to keep their company running. Do you plan to continue working full or part-time? Do you have money saved already? Are you planning to borrow money? When making this decision make sure to account for enough finances to keep your business running for at least the first 12 months.
Make a plan to open a business bank account to keep your personal finances and business finances separate. Have a detailed plan of when and how you will deposit or withdraw money from this account and what those percentages will be. When opening your business account, also plan to obtain an employer ID number (EIN) from the IRS for tax purposes.
Step 5: Obtain proper permits or licenses from state or county
Knowing which permits or licensing you will need will depend on the type of business you plan to start. It’s best to check with your state and county for specific requirements because some businesses may require a license in some states but will not require one in other states. Determine if your business will be a sole proprietorship, an LLC, or a partnership. Each type of business structure will have specific requirements for obtaining a license/permit as well.
If you plan on collecting tax when selling your products or services then you will need to obtain a selling or resale permit from your state for tax purposes. A selling permit is needed for selling products or services of your own and a resale permit (or certificate) is needed if you are reselling items and want to avoid the items being double taxed.
Hopefully, this step-by-step breakdown makes starting your own business sound less scary! The most important steps are registering properly through your state/county and remembering your “why”. Why do you want to start your business? Where do you see yourself 5 or 10 years from now? Keep this in mind and you will always have the motivation you need to start and keep going! Once you get started reach out to us here at MommyCo to join our community and have your business featured!