How to Start My Own Business

Many entrepreneurs rush headfirst into their business launch, but this is one of the most serious mistakes you can make when starting your own business. Rather than keep your business idea in your mind, why not lay down the details on paper? That’s where a detailed business plan comes into play.

The important elements of a business plan include:

Although this part comes first, it should be written last. It provides an overview of your business plan, summarizing its key points so you (and other stakeholders) can get the basic idea. More importantly, a compelling executive summary persuades other parties to read through the plan.

You have some leeway when describing your company. For example, you can provide some information about your background and how you got the idea to start the enterprise. Stating the purpose and briefly fleshing out your product or service is also useful.

Amazon and other giants are blowing their competitors out of the water in numerous markets worldwide, but you can’t follow this approach out of the gate. Instead, choose one or two markets where you’ll provide your offerings. Specify your target audience, mentioning their demographics, tendencies, and other relevant factors.

Next comes your SWOT (strengths, weaknesses, opportunities, and threats). The first two are internal factors you control. The other two are external factors you must respond to. It’s your job to take advantage of opportunities and adjust to potential threats.

This is where you go into more detail about your products or services. Highlight any patents, trademark rights, and plans to avoid trademark infringement. Focus on the key features of your offerings, outlining what makes them ideal for your customer base.

Even if you come up with the most amazing product or service, what good is it if no one knows about it? Choose your marketing channels and promotion strategies, but don’t go overboard. Be careful not to exceed your budget when devising your marketing strategy.

This is the nitty-gritty of a business plan. It’s where you detail your finances, including those available from day one and those you plan to obtain through loans. Be sure to include costs, including startup expenses and overheads.

Timeline

A timeline will help keep you focused on moving your business plan forward.  Not only will a timeline help you stay on track with your goals, but it will also help you remember critical deadlines, like quarterly tax filings, payroll responsibilities, and annual report and tax filings.

Choosing the right business structure is critical when starting your own business. The most common business models are sole proprietorships, limited liability companies (LLCs), corporations, and partnerships.

Each structure has pros and cons regarding liability protection, taxes, ownership flexibility, raising capital, and regulatory requirements. For example, sole proprietorships offer simplicity but no liability protection, while corporations provide liability shields but require more complex tax filings and administration. The sections below outline some key advantages and disadvantages of each model.

• More complex tax filings and paperwork than sole proprietorships
• Not able to raise investment capital through sale of stock (like corporations)
• Less prestige than a corporation for some businesses

• Shareholders can benefit from limited liability for business debts and lawsuits
• Easier to raise investment capital by issuing stock
• Separate corporate tax rates

Cons:

• Profits are taxed at both corporate and shareholder levels (double taxation)
• More complex regulations and formalities than LLCs or partnerships
• Less flexibility in allocating profits and losses to owners

• No government filing required to form
• No separate business taxes beyond owner’s personal income tax
• Complete control over business decisions

• Personal liability for business debts and lawsuits
• Difficulty raising investment capital
• Responsible for self-employment tax on all net earnings

Pros:

• Easy to establish with a partnership agreement
• Profits pass through to partners’ personal tax returns
• Partners each bring unique skills and knowledge to the business

Cons:

• Partners have personal liability for business debts
• Difficulty raising large amounts of capital
• Potential for conflicts between partners’ interests (each partner can act on behalf of the partnership with or without the buy-in of the other partners)

You can’t register your organization if you haven’t named it, right? It might seem this only relies on your creativity, but a few other factors are at play. Namely, you’ll need to follow several state requirements when choosing a name for a new business. Generally speaking:

• The name can’t be the same as the name of another company in your state
• The name must contain a designation of your business structure, such as “LLC” or “corporation”
• The name can’t be similar to the names of government organizations, such as the “Department of State” or “IRS”

In addition to your business name, you may also need to file for a fictitious or doing-business-as (DBA) name. Banks in some states require it to open your bank account.

Choosing and reserving a business name, as well as filing a DBA, is relatively straightforward. In most cases, you can do it on the online portal of your Secretary of State’s office or send corresponding forms to the Secretary of State’s physical address.

All states require you to legally document the creation of an LLC or corporation If you want to establish an LLC, you’ll need to submit your articles of organization. Corporation owners are required to file articles of incorporation. Again, your Secretary of State usually processes these documents.

Red tape is a pain in the neck, but following rules is essential for your traditional or e-commerce-based online business to start on the right foot. More specifically, you may need to obtain a range of local, state, and federal permits when starting your new business, some of which may include:

• Business licenses
• Business tax ID (your EIN or state tax ID)
• Real estate, medical, auto repair, and other permits relevant to your type of business

If you want to eliminate the guesswork associated with this process, get in touch with your Secretary of State. Some states provide a list of the permits you need to get your company underway.

As a future small business owner, your financial life might seem challenging. A business bank account can make your life much easier and will help with limited liability protection by creating separation between your business and personal assets. You can do a lot with a checking account for your new business, including:

• Separate personal from business finances for easier organization
• More easily categorize spending
• Enable small business loans
• Smoothly manage business taxes

To apply for your account, visit the desired bank and provide the necessary documents. Most banks require the following paperwork:

• Business license
• Ownership agreement
• Formation documents (articles of organization or incorporation for LLCs and corporations)
• EIN or other tax ID number

Strong financial management is key to success in the entrepreneurial landscape. To start, conservatively estimate expenses and revenues in your business plan. Then implement strategies to control costs, separate business and personal finances, secure adequate capital, and leverage accounting tools. Essential financial steps include:

Lease instead of buying properties, reduce overheads, and only hire indispensable staff to minimize startup expenses. Be sure to keep good records of these costs as they may be tax deductible.

Open a dedicated business bank account to avoid commingling personal and business finances. Business accounts help organize finances, earn credibility with suppliers, enable capabilities like merchant services, and limit personal liability.

Look for low-interest loans from reputable lenders to increase your startup budget. Consider grants and business credit cards, which can offer rewards, cash flow management, improved credit rating, and many other perks.

How do you plan on presenting your small business to your target market and establishing a firm position in your market? Keep these principles in mind when devising your brand strategy:

Empathy

Whether launching a traditional or e-commerce business, empathize with your customers. If necessary, revisit your business plan to determine the pain points you wish to address. Make sure all content released within your SEO and marketing plans makes it clear that you understand your audience.

Specificity

Stick to a specific niche at first. For example, if your business idea is to target middle-aged women, don’t include other groups in your strategy right away.

Consistency

Consistently put out great content to build your authority. For instance, you can start a podcast or social media vlog and invite guests with experiences relevant and interesting to your target audience.

We’ve laid down the basic business idea and business plan for budding entrepreneurs who want to start a company. The rest is up to you. Once your business gets off the ground, make sure it goes in the right direction. Hire committed employees, work with an experienced tax advisor, collaborate with other brands, and choose your financing sources carefully to skyrocket your growth.

As you navigate launching your business, it’s important to consider your personal situation and needs of your business. Laws vary from state to state. This article is intended to be informative, but it is not legal advice or a substitute for legal advice. A business attorney can help you understand your specific circumstances and guide your decisions. Likewise, the Secretary of State’s office in most states offers resources for small business owners, including online information that may help you decide on the best options – and possible requirements – for your specific circumstances.

FAQs

The four basic elements of starting a business are coming up with a business idea, creating a business plan, securing financing, and registering your business.

The best way to start a small business for beginners (and even those with a more advanced skill set) is to create a bulletproof roadmap that lists key milestones (financing, creating a business plan) and follow it to its tiniest details.

If you have no money, consider asking your family or friends for a loan or applying for one at a bank. As for limited experience, many online guides, like this one, can point you in the right direction. You may also want to join your local chamber of commerce to connect with more experienced business owners in your area.

Depending on your business, yes. An initial investment of $1,000 can be enough to start a business, such as photography, personal coaching, or virtual assistance.

This article is for informational purposes only and should not be construed as legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.