Guidance on Starting a Business
Starting a business can look like an impossible task, and it is easy to feel overwhelmed with all you need to do. How do you take an idea and bring it to life? We’ve got your back in this easy five-step guide. We’ll be covering marketing to finance, branding, and taxes. We’ll walk you through finding grants and applying for permits and licenses.
1. Market research
The first step to starting a business is market research. It would help if you had an idea of your business’s potential and demand in the market. Remember that a successful business solves a problem for the customer. Knowing your market will let you know whether there is a window of opportunity for your idea.
How can you establish whether your idea fulfills a need or whether the market is saturated? Start by reaching out to your potential customers and getting their feedback. These could be friends, family, Instagram users, or even Facebook.Target your customers by using the U.S. Census Bureau’s information on customers’ spending. Check out the U.S. Bureau of Economic Analysis to understand where and how they spend their money. Also, tap into various online resources that provide government data on potential customers and their markets, employment, or trade statistics.
2. Prepare Your Business Plan
A business plan is your roadmap to starting a business and your calling card when pitching to potential investors or banks.
The business plan explains your concept and target audience and reflects your market research into the sector. It outlines the company’s mission statement and analyzes trends that might affect the business. Furthermore, it maps budgets, financial projections, and funding requests for the banks.
However, banks or financial institutions are not the only financing options available. Take advantage of many government grants for small businesses set up to help small businesses launch, develop or grow. Grants have an advantage over business loans as you do not need to repay the money. There are hundreds of grants available from local, state, and federal governments to bring your idea to life.
The business plan also presents your company’s legal framework. Research your options carefully for the best business structure for your idea. If starting alone, you can set up a sole proprietorship, where you and the company are one for tax and debt purposes. A limited liability company, or LLC, offers protection from debts but requires a registered agent. Similarly, a corporation protects you from business debts but has different tax brackets.
This brings us to the next point: taxes.
3. Register With the Government and the IRS
Once you decide on your business structure, the next step is to register the business with the government. Small businesses can register the business name with the local or state government. However, LLCs, non-profit corporations, corporations, and partnerships must register. There are instances where you do not need to register, but you might miss out on tax benefits.
File for your federal employer identification number with the Internal Revenue Service. You will use this number to pay taxes, open a business bank account and apply for permits. It is free, and you will receive it within a few minutes.
Also, find an accountant or bookkeeper to guide you through the process and keep in line with the government’s tax requirements.
4. Apply for Licences and Permits
How do you know whether to apply for a permit when starting a business? You can quickly check the U.S. Small Businesses Agency website. It lists business activities that need to register with either state or federal agencies. The website also guides you to the relevant agency, where you can check the requirements and fees for the permit.
Check your state’s website to see what local permits and licenses you need.
5. Choose Your Business’s Name and Logo
This is the phase where many new business owners get stuck. Think of a name that is easy to remember and reflects your brand. Remember, the simpler, the better. The most effective business names and logos are the ones that stick in the customer’s memory. Do not choose a name that is similar to an existing one.
Once you choose the logo and name, file a request with the U.S. Patent and Trademark Office to register them. You can also use the website to search for anything similar to your idea.
Three Tips for Newbie Business Owners
Don’t Overthink. Start.
It is easy to get stuck and overthink the process. If you feel that your idea can work, get cracking on it. Research your market, speak to your friends, reach out to the bank to sound out what they think. Don’t wait to tick all the boxes before starting. Take action, even if it is small steps.
Ask for Help
You don’t need to do it alone. Take advantage of a free mentoring system offered by the U.S. government. You can find businesses in your area and speak to them about your problems. They will guide you and give advice based on their experience.
Ensure Your Business
Filing for business insurance might seem like an extra expense, especially initially. However, it will protect you against liability damage, lawsuits, or other problems. You might not need it, but it’s good to have that peace of mind.
These five steps and three tips provide a solid framework for starting your business. Following these steps will cover the groundwork you need and take you in the right direction. There are many free resources with valuable information to help you make the right decisions.
It is easy to feel disheartened but keep in mind that all companies, including multinationals, started small.