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Starting a business with no experience is terrifying. If you have spent your career working for someone else, the idea of being your boss is simultaneously exciting and nauseating. It is as simple as following some basic steps, committing to the process, and maybe a little bit of luck. Just starting the options can seem overwhelming.
Know Your Market
The first step to starting a business is conducting market research. You can’t start a business in a market that you don’t understand, and to understand it, you need to talk to the people in it. It’s also essential to build relationships with the people in your industry. Entrepreneurialism is all about knowing your market and knowing yourself, and a business plan is your roadmap for how you’re going to get to where you want to be.
The market research and business plan are so crucial to each other that they cannot be overstated. Flawed market research leads to poor assumptions, which leads to poor planning, which will cause all of the later steps, like funding, to collapse.
Find Your Funds
Once you have established your business plan, it is time to seek funding. Your business plan will tell you how much capital you need. You will now have to take that number and compare it to where you are. Do you have savings available? Are there people who can help amongst your family and close friends?
If the answer to these questions is no, there are still options. You might be able to get a small business startup loan, especially if you are starting with a down payment. There are also angel investors and venture capitalists if you have a solid idea and are equipped to make it a reality. Seeking alternative means to funding might be the difference between living your dream or just daydreaming, so be persistent when looking for financing. There might be several nos before you get a yes.
Make it Legal
Legal structures affect everything from everyday operations to taxes to how much your assets are at risk. Selecting the proper business structure can give you all the protections and benefits you need. Research the differences between S-corps, incorporation, LLCs, and sole proprietorships/partnerships. There is no one-size-fits-all solution, which is why the different options exist.
Business names should be picked carefully. With creativity and research, you can find a name that fits your brand perfectly. The wrong name will follow you, and your entire brand identity will center around the name you choose. Logos, color schemes, and voice can all adapt over the years, but it is tough to change your name once it is established. To safeguard your name, register it with the appropriate agencies. This requirement will vary state by state, but you should confirm the name isn’t already taken before you begin the process as part of the process.
Unless you are operating as a sole proprietorship, you will need a federal tax ID and EIN. These numbers will allow you to establish your business credit and set up all of your tax documents. You will also need to get any licenses and permits required for your specific industry in your area.
There are industry-specific changes you might have to follow through with for different types of companies, but these are the standard steps for most industries in most states. Suppose your business requires you to have any specific certifications that apply as well. No one should be practicing law or medicine without the proper education and training, for example.
