What Do You Need to Start a Business?
First of all, if you are thinking of starting a business, congratulations. Entrepreneurship is a great experience, but it demands time, effort, and dedication. However, commitment alone isn’t enough. You’ll have to do thorough market research to determine your customer base, the revenue model, and more. After all your brainstorming, you may be wondering which to do first: find funding, develop the product, register the company, or get a logo?
Frankly, it’s more about the process than the result itself. You must factor in all the requirements for a successful business and plan accordingly. So, what do you need to start a business?
1. A Practical Business Idea
The first step is to come up with a legitimate business idea. Knowing the purpose of your business may help you choose one. Apart from your interests, the factors you should consider are your skills, experience with the industry, available resources, and more.
After you have an idea, make sure that it is in demand and relevant to people. Also, you need to identify your idea’s advantages and shortcomings and modify the plan accordingly. You will have to research the market to find your possible value in the industry. It is essential to find out your target audience and competition. This research will help in upfront investments and the pricing of your product(s) or service(s). Additionally, keep in mind whether there is room for your business to grow.
Talking to experts, reading relevant books, and general internet searches are great ways to develop your idea. You can also approach local government bodies like SBDC for a second opinion.
You will need funding to execute your idea. The amount you need to start will depend on the products or services you offer and on which scale. If you’re freelancing or starting a small service-oriented business, you could probably invest your own money without external funding. Moreover, you could also ask your friends and family to invest in and support your business.
For businesses that will require a larger sum of money, you could get a loan at minimal interest rates from your local bank. Moreover, you could seek funding and help from government bodies like the SBA. Furthermore, reaching out to investors is an excellent way to get consistent funding. However, you’ll need a solid idea and a good business pitch.
Another trending option is to crowdfund your business. Crowdfunding involves people donating money for some reward in return. Also, it’s a great way to test the demand for your product or service.
3. Registration and Licenses
Registering and getting licenses for your business is the way to make it legally public. You need to provide the local government bodies with the relevant details regarding your business operations. You must have selected a brand name for your business by this time.
The most popular forms of business formations are sole proprietorship (individual), limited liability company (LLC), partnership (two or more people), and corporations. You should only register under the title that is in the best interest of your business.
Afterward, you’ll need to get various licenses from the state. The most common ones are the general license, the state tax license, the professional license, the health and safety license, etc.. These licenses vary from business to business. At this point, you should open a business account with the bank and get insurance for your business. Also, you’ll have to register for filing income tax returns.
Registering the business and applying for licenses can be hectic if you do it yourself. More importantly, you won’t want to falter with this step. So, it is best to consult a consultant or an attorney to help you with this step.
4. Location and Other Resources
Now that your business is public, you need to figure out some things to get it up and going. Firstly, location. Suppose you are a freelancer or have an online business. In that case, all you need is a laptop and an internet connection to get going. So, you can make do with home-office and co-working spaces.
If you need a physical storefront, you’ll have to lease or buy a space. Afterward, you may need to design the area according to the requirements. For example, there’ll be different interiors for a shop, cafe, showroom, and office. Furthermore, you’ll have to maintain inventory, buy machines (if any) and hire staff, among other things.
A logo is mandatory for every business. Also, it is recommended to have a website to showcase and promote the business. So, you will have to find professionals to help you with these. Lastly, you’ll need to find an accountant, supplier(s), marketer(s), and distributor(s) if necessary.
To conclude, the key is to have an entrepreneurial spirit. As discussed, starting a business requires some significant decisions. For example, you’ll need quite a few licenses, funding, and other necessities. The process can be a great learning curve, and it’s okay to make mistakes as long as you learn and grow. We hope that this guide has given you a basic idea of what goes into starting a business.