Have you considered starting and operating your own business? If so, you’re not alone. The Peterson Institute for International Economics reports that there were over 4 million businesses started in 2020 alone. And it might be more realistic than you think. But owning a business is more than just
There is a process that you should follow if you want your new business to be successful. Although it can be tempting to just be a freelancer or independent contractor and avoid all the hubbub of starting a real business. But in the long run, starting a business can be very rewarding, and it takes some of the risks out of the equation. Although many businesses fail in the first 5 years, it is possible to achieve success if you do it right.
Here’s what you need to know to start a small business of any kind.
What You Need to Start a Small Business
You need more than just a solid business idea to start a small business. Before you even set up your business there are things you will need to do and data that you need to gather. What type of business do you want to start? What do you have the
If you are lacking in small business ideas, consider these common small businesses types:
- Freelance content writer supporting other local small businesses
- Dog walking for the neighborhood
- Yoga studio/instruction
- Publishing your own fiction or
- Graphic design supporting other local small businesses
- Digital marketing and social media management is in high demand
- A specific product or service key to the local population
Of course, several of these options could be done online only, which opens up your target market from your local region to the state, the nation, or even the world. The easiest business to start as a sole proprietor is offering subscription digital products or access to valuable resources, particularly in the B2B sector. This is a great way to earn money with a small business while imparting your expertise to the general public.
Starting your business plan
It is a good idea to download a business plan template right away. The template will give you an outline of what you need to plan before launching your business. Having a solid business plan increases your chances of a successful small business launch.
Parts of your business plan will be easier to write and develop after you’ve done a lot of research, such as the Executive Summary and the Company Description, which includes your mission and vision statements. Otherwise, you should work through your business plan template as you prepare to launch.
The most common sections for a free business plan template are:
- Products and Services — what tangible or digital products or services you will sell, how you will sell it, the necessary materials and tools you will need, inventory management system, and your cost of goods/services sold.
- Market research and analysis — who your target audience and potential customers are, how your product or service helps them solve a problem, the demographics of your target market, and competitive analysis to know what your competitors are already doing
- Strategy and Implementation — how you will launch your business, your marketing strategy, and how you will comply with regulations such as the CAN SPAM Act regarding email marketing
- Organization, Management, and Teams — who will run the organization, what management roles are required and how they will be filled, other employees you need and how they will be hired, and other human resources matters
- Financial Plan and Projections — the initial investment required to start your business and where you will get it, how much it will cost to operate your business, how you will be managing finances as your business grows, reasonable financial projections
You will also need to do additional research into legal requirements for your business, and what services you will need to procure to make it happen — generally an attorney and accountant.
Starting a Small Business
Starting a small business using a business plan template is a place to start, but there are some legal and financial matters that will need to be set into motion as you work through that business plan.
Step 1: Choose a business structure
You have several options for your small business legal structure. The vast majority of entrepreneurs are actually
Step 2: Choose a business name
Choose a name for your business. Hold a brainstorming session to think of as many possible names as you can, then narrow them down. Your business name should clearly describe what you do or what you sell, while also being catchy to make a lasting impression. Before finalizing your choice, check with the United States Patent Office to make sure you’re not violating any trademark rights.
Step 3: Choose and secure a business location
If you will be operating a physical business location, finding an available property in your budget and the approximate area should be fairly easy. There are many metro areas across the nation (not to mention, world) with an abundance of empty commercial properties. You should also establish your digital real estate, or your online store, domain, and social media accounts. Ecwid offers ways for new
If you are going to have an online store, or you are operating only online, you will still need a formal business address to obtain the licenses and permits required to open and operate. There are generally ways around having a physical location, with real street addresses being offered by some services for private PO boxes. Plan how you will set up your home office as part of this step.
Step 4: Establish your business as a legal entity
Your business needs to be a legal entity for you to open a business bank account or engage in any other business activities. What you need to do to legally establish your business depends on what legal business structure you have chosen, your industry, and other factors relating to your actual business location.
Most locales require a business license to operate in their city or county. The state may also require licenses and permits depending on the products and services you will be selling or how your business will be operating. If you will be operating a vehicle for your business, most states and the federal government require that you obtain a commercial drivers license.
The federal government requires everyone to pay taxes, so you will also need to register for an Employer Identification Number (EIN). If you are going to be operating as a
Step 5: Open a business bank account
As soon as your business is a legally operating entity you need to open a business bank account. The business account will be used for all of your start up and operating costs. Even if you are a
Step 6: Hire employees and start producing your product or service
Hiring the right employees is a must when opening a new business. You need to have people on board that match your values and believe in the vision for your new company. The hiring process should be fair, meet all legal requirements, and result in quality hires that can bring your mission to life.
You can open your doors as soon as you are ready when you have completed these steps. Keep in mind that as your business grows, you will need to adapt the business plan and step up your game for your online store or online presence. Ecwid’s solutions are scalable to your business, allowing you to start small with a free account and increase your budget as your customer base grows.
Don’t forget to share your experience of starting a small business in the comments below!
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