Start Your Business in 7 Steps
Starting your business is just the beginning of your entrepreneurial journey, but the first steps are some of the most important ones.
Starting a business is just the beginning of your entrepreneurial journey, but the first steps are some of the most important ones. Watch this webinar to learn the top strategies to help you start your business. Hear from small business expert Beth Ann Dahan, Business Advisor at Accion Opportunity Fund, on how to take your business from a light-bulb idea to lights-on.
1. Start with a good idea!
Your idea will be the base of your business, so make sure it’s a good one. Experts recommend aligning your business idea with your personal life goals, passions, and skills. That alignment will help you maintain your motivation when you face challenges.
You’ll know you have a good idea when you can thoroughly answer the following questions:
- Why do I want to start a business?
- What problem do I solve?
- Who is my target customer?
2. Conduct market research on your idea
Conducting background research, articulating your demographics, and exploring how to reach your target market can help you do everything from crafting your brand to boosting your sales. Market research helps you understand your customers, your competitors, and your local area. That knowledge allow you to reach your target customers. Key topics to research include:
- Demand: Is there a desire for your product or service?
- Market size: How many people would be interested in your offering?
- Economic indicators: What is the income range and employment rate?
- Location: Where do your customers live and where can your business reach?
- Market saturation: How many similar options are already available to consumers?
- Pricing: What do potential customers pay for these alternatives?
3. Write a business plan
A business plan is a multi-purpose document that comes in many different shapes and sizes. When you are thinking about starting a business, the primary purpose of a business plan is to force you to create a complete picture of your business and to draw a roadmap for your first years in business. A well researched, strategic business plan can also help you reach business milestones and goals. Some financial institutions require a business plan if you apply for financing or loans, especially at the start-up stage.
Starting a business is exciting, but the process of creating a business plan can be overwhelming, which is why we have broken the process down for you in a series of comprehensive and easy to follow articles. Starting with Business Planning 101, these articles will guide you through the process from beginning to end.
4. Make your business official
You have your idea, you know your market, and you’ve written your plan. Now it’s time to make your business official. These are some of the steps you need to take to formalize your business.
- Register your business with your city and state
- This gives you legal grounds to move forward using your brand’s name.
- Get a tax ID number
- You will need this to pay federal taxes, hire employees, open a business bank account and apply for business licenses and permits.
- This is usually an EIN or Employer Identification Number issued by the IRS.
- Pick-up the right licenses and permits
- Depending on your business, this can include food, liquor,
health or business licenses.
- Depending on your business, this can include food, liquor,
- Decide a legal structure
- There are many different considerations when choosing a legal structure, from the size of your business to where it operates and the legal protections it gives the business owner(s). Read all about choosing the right legal structure for your business here.
- Pay Taxes
- Once you start your business, you will need to pay business taxes.
5. Organize your finances
Most businesses need some kind of funding to get themselves started. From buying inventory and equipment, to setting up your website and your legal structure, getting started requires funding. There are many different ways to fund your business, but common options include:
- Bootstrapping: using personal resources.
- Debt financing: (borrowing) from a micro-credit lender or CDFI (Community Development Finance Institutions).
- Crowdfunding: small contributions from many people on the internet e.g. Kiva.
- Friends and family: usually your first supporters.
- Angel investors: individuals who invest in your business, usually in return for profit-sharing or partial ownership of the business.
- Grants: money you don’t have to pay back.
6. Protect your business
Starting a small business takes a lot of work, time and money. Depending on the type of business you have, you may need to protect it with the right insurance coverage. Types of insurance include:
- General liability insurance
- Helps to protect your company from liability claims alleging bodily injury, property damage, libel or slander.
- Business income insurance
- Helps to replace lost income if you have to temporarily close your operation due to fire, theft or wind damage.
- Professional liability coverage
- Protection if you’re sued for negligence or errors in the services you provide.
- Commercial property insurance
- Helps pay for damages to your building, equipment, inventory, furniture and fixtures.
Another way to protect your business is to protect your intellectual property. Learn more about intellectual property protections here.
7. Promote your business
Just because you build it, that does not mean customers will come. You have to get the word out to let customers know what you offer and how to buy it. Marketing is huge factor in business success, especially for small and start-up businesses. Common techniques include:
- Take advantage of local listings: Register your business with Google — it’s the new yellow pages
- Optimize your website’s SEO: Search engine optimization (SEO) helps your website show up higher in Google search rankings.
- Use social media: These free platforms allow you to actively inform, attract and engage with your followers.
- Create engaging content: By creating engaging and informative content, whether through a blog, video tutorials or infographics, you can show your industry expertise and build trust with your audience.
- Create press releases: Any time your business does something notable or newsworthy, draft a press release to send to your local news outlets.
- Use paid advertising: You can pay to turn one of your business’s social media posts into an ad. This method allows you to choose a target audience, region and length of time you’d like to run the ad.
- Participate in local and community events: Meet fellow business owners and prospective customers while promoting your business up close and personal.
- Set up at trade shows or markets: Trade shows bring together buyers and sellers from niche industries, giving you access to real leads.
Bonus Step: Ask for Help
Starting a business can be exciting and overwhelming all at the same time, but you aren’t on this journey alone: Accion Opportunity Fund is here to help! From our library of hundreds of free educational resources (like this article) to our free one-on-one business coaching, to our small business loans, we are here to help you reach your business goals.