9 steps to guide you as you start your business
Written By: Monna Eve Senara
The moment you decided to start a business will often go down as one of the most definitive moments of your life. You are finally taking the plunge into the vast and often uncertain world of business, which is truly exciting as much as it is nerve-wracking. To make sure you’re as prepared as possible, here is a list of the most important points you should consider when starting a business – but you can find even more on stepstostartingabusiness.com.
Step 1: Have a Business Idea
Every business starts with an idea. Yet it’s not enough to bank on this idea alone. You have to act on it. Most successful business ideas often came out of a need to solve a problem or from an unexplored opportunity in the market. Some are derived from already existing business concepts but with marked improvements in quality, efficiency, or packaging.
Don’t just start a business for the sake of starting one. Create something that will differentiate you from the others. Determine your strengths, uniqueness and construct your business idea around these qualities.
Step 2: Conduct Market Research
To find out how feasible your idea is in the real world, it needs to be backed up with research and statistics. Market research will help you evaluate the potential of your business and prepare for the challenges that you may encounter.
As what Benjamin Franklin once aptly remarked, “The one who fails to prepare, prepares to fail.”
Identify your market, competitors, and realistic opportunities. Evaluate and explore your business idea then set your personal and business goals. This is an important stage that will lead you to formulating your business plan.
Step 3: Make a Business Plan
Once you have a clear and realistic view of your ideas and goals, you need to transform them into a concrete business model. This is like a blueprint of the different aspects of your business, such as sales, marketing, advertising, promotion and location. As you develop your business plan, important decisions will be made and this is where your market research will come in handy. The business plan will serve as the core of your business and will be a valuable tool in its implementation and the evaluation of its success thereafter.
Step 4: Secure Funding
After you have finalized your business plan, it’s now time to realize it. Finances will be your next concern. There are several options of getting the funds for your business. You can use your personal money or get a loan from the bank. You can also opt for alternative lenders like Kabbage, OnDeck or CAN Capital. For even bigger funding, you might want to consider applying to a venture capital firm for several million dollars worth of investment. There are also other means of funding such as angel investors and crowdfunding sources. You can learn more about them in “How to Secure Funding for Your Startup.”
Step 5: Decide on the Business Structure
The next important stage in starting your business is deciding which business structure is appropriate for your company. You can register as a sole proprietorship, a partnership, a corporation, or more commonly, a limited liability corporation. This is important as this will determine the documents you need to process, your personal liability on investments, and the taxes you need to pay. If you want a more comprehensive discussion of each business structure, here’s “A Quick Look of Business Structures for Startups”.
Step 6: Register your Business
Now that you’ve chosen your business structure, you are now set to process the paperwork. First stop is registering your business with the government. For example, if your business would be a corporation, you will need to file your name, business purpose and description, corporate structure, and stock details, among others.
If you plan to conduct business using another name other than your own, you will need to register your “Doing Business As” name. Application for your DBA will be filed through your county clerk. If you are starting your business in California, you can find a list of county clerks in your state here.
Step 7: Register for Tax in your Local government
Next, you will have to register for tax and get your Federal Employer Identification Number. Additionally, it is important to learn about corporate, payroll, income, and sales taxes, which will all concern your business. For startups in the state of California, you can learn more about these from the California Secretary of State’s website. If you’re planning to start a UK business, you’ll need to register your company with HMRC.
Step 8: Obtain the necessary Permits and Licenses
Depending on the type of business you have, you will need to obtain particular licenses and permits from your local city for the legal operation of your business. CalGold is an example of an online database which will help you identify which permits and licenses your business will need and how to get them.
Step 9: Study Employer Responsibilities
Legal responsibilities do not end with the business registration. As a business owner, you must also be aware of the legal considerations when managing employees and engaging in business dealings and processes as you build up your company. The US Small Business Administration discusses this in more detail. These steps involving legal procedures may vary in each state and you must look into the rules and requirements of the state where you belong.
Start your Business
Starting a business truly has its challenges but with the right information and direction, it will be easier to lay out the foundation of success.