Many people have great business ideas, but do not know how to get started. Luckily, starting a business is not as difficult as one might think; most of us just need a little guidance to get started. Here are ten steps on how to start your own business.
1. Business Plan:
Whether an entrepreneur wants to run a local store or build an empire, he or she must write-up a basic business plan. This should include a basic idea on how the business will make money. Though, when writing a basic plan, it is not necessary to include complicated financial figures, unless you plan on going to a bank for financing. With a well-written plan, an entrepreneur will have a roadmap to follow going forward. This will make things much easier as you get going. The business plan will most likely change, sometimes very dramatically as you start growing your business, but the process of getting it down on paper is more valuable than most entrepreneurs realize.
2. Finance the idea:
An entrepreneur must have a financial plan. A new business owner should find a way to get adequate funding; an entrepreneur should get enough funding to build the company and not take a paycheck for at least six months, and sometimes much longer. One must remember, without financing, most people will not get off their ideas off the ground. Keep in mind when I say financing it not always borrowing money from a bank or investor, more often than not it is from funds you already have or money that you are making on the side as you start your business. Most of the time it is best to try and bootstrap your startup business.
3. Legal Structure:
The legal structure of a company is more important than most new entrepreneurs realize. When choosing the right legal structure, one can protect themselves against lawsuits and other problems. But the legal structure is not something that you need to get caught up in worrying about forever. I have seen many businesses go out and incorporate a company on day one when that is something they never needed to do and turned out to be a big waste of money. Majority of businesses are set up as a sole proprietorship, especially starting out. Then on the other side of things I have seen a number of businesses not set up any type of legal structure and pay for it later. So take some time and think about risks involved with your business and what kind of assets you need to protect, but don’t let this be the end all.
4. Register with the government:
When setting up a company, one must deal with the government. For starters, the new business must register their DBA with the state and county governments in most areas. Next, it is often wise for the business owner needs to get a tax identification number from the IRS. As long as one has everything in order, it should not be difficult to register the business with the government.
Now, some people may start their operations out of a spare room or the garage while others may need to rent a commercial building. A business owner should strive to find a site that will work for the company initially and in the future. But keep in mind the less money you spend at the beginning for a location the more money you will have for more important tasks, that is unless your business heavily relies on a location.
Depending on the location, your business may need to get permits and it is up to the owner, not the local government, to determine if the business needs permits. To get a permit, one must go to their local city hall and speak with someone in the permits or finance department.
7. Hire employees or contractors:
Some new entrepreneurs may not need employees when starting out, but often a company will need to hire outside help. A business owner should decide what he or she needs out of an employee before starting the search. Not only that, some entrepreneurs should explore other options such as finding contractors or interns. This step is crucial; employees truly are the backbone of most small enterprises and not getting the right ones can extremely limit your success.
8. Marketing plan.
When building up a business, one must create a marketing plan. Ideally, one should devise a multi-faceted marketing plan to attract a wide customer base. This would include flyer advertising, radio spots and a solid online presence. A marketing plan can make or break a business. Marketing done right can launch a business to amazing heights, while one done wrong can turn into a money put or worse yet not reach your desired audience.
9. Internet presence:
We have reached a new era, with the exception of a few all businesses should have some type of an internet presence. One must take steps to build their Internet presence. There is a huge range of what your business could do on the web and what will be right for your business. So you need to thoughtfully thing about where your audience is at on the web and how you can get to them, each business will be different and it is up to you to figure out what is right for yours.
10. Accept payments:
You need to get payed, after all isn’t that the whole reason you wanted to start a business. Some business owners neglect to accept multiple forms of payments; this is a mistake. When one can accept payments from multiple sources, the company will not lose out to competition.
Once you know how to start your own business, you have a much better shot of success. It is not difficult to become an entrepreneur, provided takes the time to really go over things and follows these steps. When getting started, it is important to ask questions and get help from multiple sources. In the end, starting a business is not as hard as most people think or are lead to believe, but the success of that business completely depends on how prepared you are going into it and how well you have assessed all aspects of the business you are starting.
Author: KC Beavers
KC Beavers is a semi-retired entrepreneur. The subject of personal finance has always fascinated him. In an effort to not bore those around him with all his love of personal finance as much he has come here to bore all of you instead.
The all 10 step is best step to start own business, great post! In Finance the idea, I have checked your both view when money in your hand or no money that’s really awesome. For Legal Structure, we can use LLC or Inc. both are good option.
Well information! Surely I will own start business in future on that time your points are very helpful for me. Thank you so much for sharing this information. I really appreciate this....)
"Then on the other side of things I have seen a number of businesses not set up any type of legal structure and pay for it later."
A sole proprietorship requires no special legal structure.
"4. Register with the government:
When setting up a company, one must deal with the government. For starters, the new business must register their DBA with the state and county governments in most areas. Next, it is often wise for the business owner needs to get a tax identification number from the IRS."
If you don't take payments in your company's name, you don't need a DBA as a sole proprietorship. If you are an LLC or an S Corp, you will have an actual legal structure and will not have a DBA. Also, you only have an EIN if you are an LLC or S Corp. (Or C Corp, but that's not likely.) Otherwise, you use your own SSN/TIN.
@Jenny at FrugalGuruGuide "A sole proprietorship requires no special legal structure. "
- That is why most business start up as one.
"If you don't take payments in your company's name, you don't need a DBA as a sole proprietorship. If you are an LLC or an S Corp, you will have an actual legal structure and will not have a DBA. Also, you only have an EIN if you are an LLC or S Corp. (Or C Corp, but that's not likely.) Otherwise, you use your own SSN/TIN."
- You can use your SSN as a sole proprietor but I would recommend against it. Sole proprietors can use EIN numbers. EIN's are very easy to get and help protect the business owner from fraud. I would push any business starting up to get one no matter legal entity you form.