How to Start a Business

If you’re not sure how to start a business the right way, this guide will show you how.

by CreativeFinances.com

There’s a lot of work that goes into running a business. That’s why it’s so important to get off on the right foot.

And it’s important to learn all you can about how to start a business in today’s current market conditions.

If you start right, you drastically improve your chances of success.

Good preparation means you’ll know what to do more often than not.

And it means your business won’t be slowed down because you’re looking for an answer you should have had from the start.

On this page, we break down all the crucial elements you need know so you can learn how to start a business and succeed from the very beginning.

So if you’re a take charge person, if you’re the type that likes to be ready by planning ahead, then this guide is for you.

But before we start, let me ask you an important question…

Are You Ready to Start a Business Right Now?

Should you even be learning how to start a business at this moment?

How do you know if you’re truly ready to launch a new business today?

Many people believe they are when they aren’t.

So how do you know?

Ask yourself these 3 questions…

Are you going into business for the right reasons? Are you really prepared for all the work that’s required? And are you ready for that huge commitment of time that you’ll need to put in?

When you start a new business, you’ll have less time for everything else in your life. Are you ready for that?

And you’re going to work harder than you ever have before. Are you ready for that too? Your heart as well as your head needs to be in this.

Many people that start a business underestimate the difficulties they might face and the time commitment that’s required. They don’t realize the litany of tasks that awaits them.

So one of the first steps in launching your new business is to answer those three questions above as honestly as you possibly can.

Then, you also need to be honest and upfront with the people in your life. Let them know that you won’t have as much time to spend with them as before.

But don’t be afraid to lean on them at times for advice about how to start a business either. Many successful entrepreneurs bounced ideas off family and friends when they first started out.

The advice you get might work out for you. And it’s free.

Now, if you’re aware of all the risks and downside to starting a business, and you still want to continue with the journey, then you’re ready for the next few stages listed below…

Decide on Your Business Structure

Structure is another important element in learning how to start a business from scratch.

What kind of company will it be? Will you be a sole proprietor that runs the company all by yourself without the hassle of forming a corporation? Or will you opt to become a Limited Liability Corporation?

The answers to these questions will not only protect you if someone takes legal action against you, they also help determine how you go about filing your taxes.

So it’s important that you take some time to figure out what’s best for you. Here’s a quick look at each type of business entity…

  • Sole Proprietor – this is the easiest option to go with. But it also means you are more liable financially if your business gets taken to court and you lose the case. With this arrangement, the owner is 100% responsible for anything that happens in the business and this can affect your personal credit.
 
  • Limited Liability Company (LLC) – by choosing this type of business structure, you are limiting your personal liabilities. The people that own the company can’t be held liable for everything that happens within the company. 
 
  •  Corporation – this is the option that makes the individual shareholders the least liable for debts and other legalities related to the business. Your personal assets are more protected here. There are different types of corporations and if you’re thinking about forming one, you need to research which one is best for you and your shareholders.
 
Once you figure out what type of business entity is best for you, then you can shift gears toward getting permits, licenses and completing any other paperwork the city and state you live in requires.
 

Your Accounting and Bookkeeping System

If you’re a small company with no employees and you plan on doing the bookkeeping the old-fashioned way, then you can skip this step in our how to start a business guide.

For everyone else, you’re better off getting this out of the way now.

Having a system for this in place makes it easier to focus on other aspects of your business that actually brings in profits.

So you don’t have to give it much thought down the road when you’re in the middle of trying to grow and expand your business.

But how will you keep track of the books?

There’s many solutions on the market today that are available to you.

They include the most widely known like QuickBooks, FreshBooks, Zoho, and many, many more.

You need to decide which one you’re going to rely on and which one you feel the most comfortable with. You can do that by signing up for a free trial offer with any of the companies you are considering.

Your accounting software can also help you create a detailed monthly budget. Using this type of software gives you a clearer picture of what’s going on with your company’s financials.

And it’s easier to manage.

Hire an Experienced Startup Attorney

Starting a business with the help of a good lawyer can make your new venture a hassle-free affair. Some people try to skimp on hiring a lawyer, but then get in trouble down the road.

That’s why you should give serious consideration to hiring an attorney that specializes in helping individuals launch new companies.

Choose an attorney who knows the entrepreneur’s struggles and journey. Choose one who specialized in business startups.

As an added bonus, if you choose right lawyer, you could end up getting powerful business advice outside of the legal field.

There are many things a good business lawyer can help you with.

They can help you incorporate, show you procedures for hiring people, draw up contracts for you, help you stay out of legal trouble, and so many other business-related things.

They can even help you get patents or protect your work with a copyright. Where can you find a good lawyer for your startup?

If you know someone that’s in business, ask them about hiring a lawyer in your area. Ask them about their expertise in helping startups.

Create a Working Name

If you don’t already have a name for your business, now is a good time to come up with one. One strategy used by many is to come up with a name that defines the business.

Another strategy is to just come up with something that’s memorable.

This is a great choice because shorter names are easier to remember.

Some of the most successful companies in the world have one-word business names.

Here are a few examples; Google, Apple, Microsoft, and Amazon.

So you should give serious thought to coming up with a name like this.

Or you can go with the first strategy and make the name very descriptive based on what your company does.

Your Costs and Getting Financing

Part of learning how to start a business involves figuring out what the true costs are and then getting the money to finance your business if you need it.

There are two things you need to determine here:

What are the true costs going to be and how will you finance the business?

There’s no worse feeling in the world for a business owner than launching a business and finding out later on you didn’t have enough money from the beginning.

It’s like a punch in the stomach.

Once you realize the money you allocated isn’t enough, then you have to scramble around to find more capital. It’s scary and frustrating at the same time.

Making matters worse, you now you look like an amateur to would-be investors. Many new businesses fail because they didn’t have enough financing from the beginning, but they thought they did.

You can avoid all that by simply taking a few precautions at the start.

Precautions like giving yourself a real estimate of what your costs will be. In fact, you should overestimate your costs.

Give yourself at least a 20-30% cushion if possible.

For example, if you need $100,000 to start the business, overestimate that figure and count on needing $120,000-$130,000.

Another thing you need to decide as far as the financials go is whether you plan on keeping your present job or going full time with your business from the start.

Naturally, when you first start out, you’ll want to keep a close eye on all your expenses. If you don’t really need something for your business, don’t buy it. Too many first-time business owners spend money on things they don’t really need at the beginning.

Since you don’t know what your profits will be at the beginning, it’s important to get your cost estimates and financing right. And it’s important to watch your expenses and outflow of money.

Once you know what your true costs are, and where you will get your financing from, you can move on to the next step.

Create or Refine Your Product

No matter what type of product or service you offer, there’s always a way to make it better.

Whether it be enhancing the actual product itself, giving your customers much better service, or giving away a useful freebie along with your main product.

But one of the best ways to enhance your product offerings is to simply get feedback from customers or potential customers.

Thanks to the internet, getting feedback is a whole lot easier than it used to be. Go to any internet forum where people are talking about the same type of product that you offer.

Read what their main complaints and problems are. Then try to solve those problems. This gives you a big edge over others who aren’t employing this strategy.

Another great way to develop or enhance a product is to focus on the simplicity of the product as well as the quality. That’s what a lot of the big tech companies have done with remarkable success.

You also must make sure you can get all the materials you need from reliable suppliers. Always try to have backup suppliers in case something happens with your main partners.

Write a Business Plan

It’s now time to write the dreaded business plan. Many new business owners hate the idea of having to do this step. Most people just want to get on with launching their business.

But too many people have lost their way in their new venture because they didn’t take the time to create a business plan.

The good news is that if you’ve already done the steps listed above, then you already have some of your business plan finished.

For example, one of the things you should put in your business plan is how you will be financing your new venture. That is one of the steps listed above. So it’s already done.

Another part of your business plan is showing that you’ve done some market research. That’s also part of one of the steps listed above.

However, you may want to add on to it and do a more in-depth market analysis. But some of that work is already done.

A well-written business plan also consists of a brief description of what your company does and how it fits into the market. That shouldn’t be too difficult.

Also describe how you will be differentiating yourself from your competitors. Describe your product or service’s features.

There’s too much to writing a business plan to cover in this guide. If you want a more detailed explanation, go to our guide how to write a business plan. That will show you all the steps needed to write a strong an effective business plan.

Establish Some of Your Processes

Knowing exactly what your processes are for doing certain things will make your day-to-day operations run a lot more smoothly.

It helps you learn where you might need to improve. It gives you a productivity boost and allows you to do more without always having to pause and think about how something can be done more effectively.

What kind of processes are we talking about?

How will you manufacture your product or find a supplier for it? And how will your product get from the warehouse to the customer?

What are the processes for accomplishing these things? What will all of this cost you? You should write down every little step in any process you can think of.

Describe who in your company will do what and how they will do it.

What’s the process for accepting payments for your product or service? Do a full walkthrough of the payments process.

At first, this might all seem like an impossible task to get all of this down on paper or on your computer screen. But this simple step is easier than you think and can pay off big from the very beginning.

Create Your Marketing Plan

This is another step that could make or break your business.

Earlier in this article, you created a business plan that included a marketing strategy. But now it’s time to get more granular with your marketing.

You might already have a good idea of how you’re going to sell your product or service, but have you given it all the thought it truly deserves?

One of the marketing strategies many beginners skip is marketing their website on the Internet with search engines and social media.

Yet, these proven tactics can reap huge rewards. When you do them right, they are effective, and they don’t cost as much as traditional advertising.

Why not use one of the strategies that most pros use? A strategy like guest blogging. All you do is create an article or blog post, and then contact other website owners to post that content on their site. Within the article or block post, you insert a link back to your site.

If the site where you’re posting content has a big following, this can explode the traffic to your site. And it doesn’t cost you anything but the time it takes you to write 1000-word article.

Maybe advertising on the radio would work best for your business. It’s up to you to find out which medium fits best with your business.

Seriously Consider Buying Insurance

If you’re a small business, at first, this might seem like another needless expense. But it can end up saving your hide in the long run.

A good insurance plan can protect your property, can protect you from theft, and can protect you from numerous other unforeseen circumstances.

Insurance really isn’t an option, it’s a must. Especially if you plan on having employees.

Trying to get by without insurance is a huge gamble that could potentially sink your business dreams without any warning.

Imagine working your tail off to make your business a success, only to have some unforeseen event crash your financials because you didn’t have insurance. It’s just not worth the risk.

What types of insurance might you need?

Some of them include property damage insurance, liability insurance, and workers compensation insurance.

Depending on your business structure, you might need one or all three of these insurance types.

Build your team

Unless you plan on running a solo business all by yourself, you’ll need to put together a team of able minds.

They will help you execute your game plan. So it’s important who you choose to come on board as part of your team.

Choosing the people that will help you execute your plans is almost as important as the product you have to offer.

With all of today’s technology, you don’t even need to hire someone on a full-time basis. You can hire freelancers from anywhere around the country.

No need to splurge on a full-time salary either. You can pay them by the job or by the hour. This is a great option for startups. It eliminates a lot of the usual headaches associated with hiring someone.

Just make sure that when you hire someone to do something, they know their exact role and what they’re supposed to do.

Make Your First Sale

It’s time to start bringing in some money by selling what you have to offer. This is the part where you take the marketing strategies you created earlier and put them to use to actually start generating sales.

By now, you should already have a good idea of the most appealing way to sell your wares. So it’s time to put your advertising and marketing into action.

At the same time you want to be on the lookout for new marketing opportunities. If you have the money, run small test in mediums that your competition does not use. It might give you an upper hand.

Now, you’re doing all this while keeping all of your market research that you did earlier on in mind.

If you’re not able to sell as much as you thought you would, then start looking for reasons why. Once you learn those reasons, adjust your sales pitch and marketing.

Always be learning. Now you’re ready for the final step.

Grow Your Business

So you’ve launched your business and you’ve made your first sale.

Now it’s time to build momentum and keep it going.

How do you do that?

By simply being consistent and adjusting to market conditions when needed.

And no matter how challenging it might get; you need to stick to your game plan and persevere through all adversity.

Like the old saying goes… there’s no substitute for hard work.

This is also a time to start looking for partnership opportunities with other companies. Your product or service might be a perfect fit to ship with somebody else’s product or service.

If you spot the opportunity, jump on it.

This last step, combined with all the others listed on this page, form a great starting point for your business launch.

The Final Word

If you go through all the steps listed on this page, you’ll be well on your way to a smoother, more efficient business launch.

And that’s the whole point of taking the time to acquire the knowledge for how to start a business online or offline.

Some of the steps on this list pertain to the technical issues you need to iron out. Like company structure, hiring an attorney, coming up with your business name, and deciding how you will finance the company.

These lay the groundwork for the other steps. The kind of steps that actually bring in revenue and profits.

It’s the marketing, product development, team building, and momentum building that will grow your business and keep it going prosperously for a long time.

And if you have smart systems and processes in place, it all runs more smoothly. So complete as many of these steps as you possibly can.

It could mean a huge windfall for you down the road.

And it could mean a whole lot less stress and anxiety.

Mastering the art of how to start a business while succeeding from day one comes down to your willingness to complete as many of these steps as you possibly can when first starting out.

Related Articles

DISCLAIMER:
The content provided on this site is for informational purposes only. You should consult a financial adviser or lawyer before making any financial decision. This site receives compensation from third party advertisers. This helps keep the site free of charge and allows us to give you reviews of companies and products you may be interested in.

Copyright © 2020 All rights reserved.