Let’s Start a Business!

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Starting a business involves in-depth planning, making key business structure and legal decisions, and then following those carefully thought-out plans.

Step 1: Conduct market research

Take a look around your local area for a need. Conducting market research will tell you if there is an opportunity to turn your idea into a successful business. It is also a way to gather information about potential customers and similar businesses already operating in your area. Take the information collected during your research to create a vision board to outline (rough draft) your business idea. Your marketing research will also help you decide where to open your business (location) and what kind of business to open (physical – brick-and-mortar or virtual – online store).

Step 2: Choose a name for your business

It is not easy to pick a name, but you will want to spend some time selecting one that reflects your brand and captures the spirit of your business. Even though you are just starting out, it is very important that you plan for the future. Take a moment to research (internet search) your business name nationally, even if you only plan on doing business locally. Most states will not allow different business entities to have the same name even if they are located in different cities. You do not want to spent time building a brand to have to stop and reestablish your service under a new name. You might also consider whether a domain name is available for your new business venture.

Step 3: Choose a business structure

The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability.

For more information on business structure, take a look at the Small Business Administration (SBA) Choose a business structure website.

Step 4: Get federal and state tax IDs and register your business

It is vitally important that you get an employer identification number (EIN), even if you are establishing a sole proprietorship. The EIN is important because you will use the EIN to start and grow your business. You will use it to open a business bank account and for paying taxes. The EIN is the social security number for your business. Now take the name you selected in step 2 and register it with the federal and state government. Registering your business name will help legalize it and protect your brand.

Note: in some cases, you will have to apply for additional licenses and permits. Obtaining licenses and permits vary by industry, state, and location and keeps your business running smoothly and helps you stay legally compliant.

Step 5: Write a business plan

The business plan is the foundation of your business. Use the information you collect, and the rough draft you created, in step 1 to find a competitive advantage for your business and construct your business plan. The step-by-step plan is the roadmap for how to structure, run, and grow your new business. You will need the plan to convince people to work with you, invest money, or make a loan to your business.

Step 6: Fund your business

The business plan will help to figure out how much money is needed to start your business venture. If you do not have the funds needed on-hand, you will need to look for an investor or apply for a loan to acquire the necessary capital. There are also other methods of obtaining the capital you need:

No matter what form of fundraising you choose, always make sure you practice due diligence to make sure you are getting the best deal possible. This is especially true when dealing with angel investors or venture capitalists.

Step 7: Open a business bank account

It is important that you keep your personal and business transactions separate. Opening a small business checking account will help you accomplish this.?Your business account will help you keep track of expenses, tax responsibilities, and day-to-day issues. The good news is that if you have followed the steps above it will be easy to set up your business account because you will have the right registrations and paperwork already prepared.

Step 8: This is the most important step – FOLLOW YOUR PLAN!