So you want to know how to start a business…
… but you’re completely lost, right?
Don’t worry. Every aspiring entrepreneur feels this too.
And that’s why I’ve put together this easy-to-follow guide to demystify the startup process and help you start your business today.
Let’s dive in.
1. Brainstorm a Great Business Idea
A successful business starts with a great idea.
But choosing a business idea isn’t about monetizing something you love to do. It’s about finding that intersection between your passions, skills, and a need in the market you could potentially fill (or fill better than the competition).
For example, when entrepreneur, Alex Hormozi, wanted to launch his first business, he narrowed it down to three options:
- Test prep agency — because he was good at taking tests
- Frozen yogurt shop — because he was passionate about frozen yogurt
- Gym — because he felt most gyms underserved their customers, and because he enjoyed working out
Hormozi settled on opening a gym because he had a passion for fitness and felt he could deliver better service than the competition. That led to him opening several other gyms before starting other successful fitness-related businesses.
The bottom line is that a business idea that aligns with your interests and skills boost the likelihood of your business’s success, while also preserving your personal satisfaction. Without this alignment, you might lose interest in your business or fail to deliver a product or service that genuinely connects with your customers.
So if you’re mulling over business ideas, keep it simple. Start with your passions, interests, and experience, and then:
- look for problems that you can solve by leveraging those three components and,
- of those problems, consider the ones you genuinely want to solve.
- 20+ Small Business Ideas for Entrepreneurs in 2023
- How to Write a Winning Business Plan
- How to Write a Business Plan – Entrepreneurship 101 [Video]
2. Research Your Competition, Audience and Product
If a successful business starts with a great idea, then market research is the map that guides it there.
Researching your competition, audience, and product involves studying primary competitors, identifying your potential customers, and understanding the problem your product solves.
Without this critical step, you run the risk of creating an unwanted or unneeded product, targeting the wrong audience, or failing to stand out from the competition.
For example, let’s say you’ve honed your baking skills over the years and decided to open a bakery.
Here’s how the process of market research would unfold:
- Understanding your product: What sets your baked goods apart from everyone else? When people talk about your bakery, what do they immediately associate with? Is it that you bake with organic ingredients, offer gluten-free options, or maybe offer fine French desserts?
- Knowing your audience: Who would be interested in your baked goods? Are you targeting anyone with a sweet tooth, or a more refined audience, like foodies in search of exotic flavors? Understanding your audience’s needs/wants and likes/dislikes help you create products they’ll enjoy.
- Studying your competition: What do the competing bakeries offer? Do they serve carrot cakes and muffins while you offer croquembouche and macarons? How do they market themselves? What are their prices? Understanding the competition helps you differentiate your offering.
Let’s say your market research reveals there’s a strong demand for gluten-free baked goods in your locale, and very few bakeries cater to this need. You could meet this demand by offering delicious gluten-free alternatives.
The bottom line?
Immerse yourself in market research, and let it guide your product offering.
- Product Research: The Key to Building a Product People Will Love
- How to Do a Competitive Analysis: A Step-by-Step Guide
- What Is a Target Market (And How to Find Yours in 2023)
3. Draft A Solid Business Plan
Think of your business plan as your GPS for success.
It’s the ‘how-to’ guide that describes what your business is all about, where you want it to go, and the steps to get there.
Business plans come in all shapes and sizes and vary by industry, but these are the common elements you should include in your business plan:
- Executive Summary: This is a brief overview of your business. It should explain what your business is, what it does, and why it has a good shot at success.
- Company Description: This section is like your business’ “About Page”, where you explain, in detail, your business name, structure, location, and what it offers.
- Market Analysis: This is your business’s report card on the industry, competition, and target audience — it’s where you show off your deep knowledge about the market landscape.
- Organization and Management Structure: This is the organizational chart of your business, showing who’s who in your team, their roles, and the business’s legal structure.
- Service or Product Line: This section describes, in detail, the products or services your business provides and outlines their appeal to potential customers.
- Marketing and Sales Strategy: This section is your game plan for attracting and retaining customers. It details how you’ll position your product or service in the marketplace.
- Financial Plan: This is where you forecast your business’s financial future, using projections to show your business’s profitability over time.
Without a solid business plan, you risk losing direction and any potential venture capital investments or loans.
Take the time to articulate a detailed business plan. It’s not just “busywork”. It’s a valuable document to help your business survive and succeed.
- The 10-Year Business Plan
- Business Plan: What It Is, What’s Included, and How To Write One
- How to Make Your One Year Success Plan [Video]
4. Register Your Business (& Finally Make it Official)
This is where things get real.
Registering your business makes it an “official” entity.
This is where you’ll choose your business name and structure, obtain any necessary permits and licenses, and get your Federal tax ID.
It might sound scary but let’s break each part down:
- Choosing your business name: This is the legal name for your business. It can’t be the same name as another registered business in your state and can’t infringe on any registered trademarks.
- Deciding your business structure: Are you a sole proprietorship? Partnership? S corporation? C corporation”? Or a Limited Liability Company (LLC)? Your business structure impacts everything from taxes to personal liability. Be sure to consult a tax professional or a lawyer to see what structure fits best for your business.
- Obtaining necessary permits and licenses: Most businesses need a combination of municipal, state, and federal licenses to legally operate a business. You may also need additional papers — like food or liquor licenses — depending on your business. Consult with your local chamber of commerce for specific requirements.
- Get your federal tax ID: Unless you’re a sole proprietor, you’ll need an employer identification number (EIN) for tax purposes. Obtain your EIN through the IRS.
Although registering your business seems like frustrating bureaucracy, it’s a necessary, foundational step for opening a business.
Not only does it afford you legal protection — and keep you out of hot water with the IRS — it makes your business credible, which is important for establishing trust with potential customers.
- How to Start An LLC in 7 steps
- Sole Proprietorship 101: The Easy Guide to Setting One Up
- How To Register A Business Name (2023 Guide)
- Apply for an Employer Identification Number (EIN) Online
- Launch Your Business (US SBA Guide)
5. Figure Out Your Business Finances
No one starts a business to tackle spreadsheets and calculate tax deductions.
But here’s the thing:
Having a firm handle on your finances prevents your business from drifting off course, especially in the early days.
Always consult a financial professional when launching your business. That said, these are the most critical areas for early business financial management:
- Open a Business Bank Account: First things first, separate your personal and business finances by opening a business bank account. This keeps your finances tidy and simplifies your taxes.
- Accounting Software: Next, choose an accounting software that suits your business needs. This digital helping hand will track income, and expenses, and can often help with tax preparations.
- Budgeting and Expense Tracking: Setting a budget and regularly tracking expenses ensures you’re heading in the right direction and alerts you if you veer off course.
- Tax Management: Understanding and managing your taxes are critical to avoid legal issues and potential fines. If you find taxes terrifying, consult with a tax professional when launching your business.
- Calculate Your Break-Even Point: Your Break-even Point is when your total revenue equals your total expenses. In other words, it’s the point where you start turning a profit. Knowing these numbers allows you to set realistic goals and expectations. It’s also a vital indicator of a business’s health.
A firm grip on your finances is a stepping stone toward profitable growth.
So, start with a sound financial plan, keep an eagle eye on your finances, and don’t hesitate to enlist the help of a financial expert.
- How to Write a Small Business Financial Plan
- Open a Business Bank Account
- Best Accounting Software for Small Businesses
- A Guide to Small Business Taxes
- How to Calculate a Break-Even Point
6. Apply for Business Insurance to Protect Yourself
Starting a business is thrilling, but it’s not without risks.
So to better protect yourself (and your business) from unexpected setbacks and losses, you’ll need business insurance.
Now, different types of business insurance provide coverage for specific cases.
- General Liability Insurance: Imagine a customer slipping and falling in your business — general liability insurance covers the legal costs and potential settlements associated with bodily injuries. It also covers property damage and reputational harm.
- Property Insurance: Whether it’s your IT gear or office furniture, property insurance safeguards your business assets against risks like theft, fire, and certain weather-related damages.
- Professional Liability Insurance: If you’re in the service sector, this is a must-have. It protects your business against claims of negligence, errors, or omissions in the services provided.
- Workers’ Compensation Insurance: When an employee gets injured on the job, this coverage provides wage replacement and medical benefits, protecting your business from legal complications.
- Product Liability Insurance: If your business involves manufacturing or selling physical products, this insurance shields you against financial losses from defective products that could cause injury or bodily harm.
- Business Interruption Insurance: In case of a major disruption, like a natural disaster, this coverage compensates for the lost income during the downtime.
Think of business insurance as an investment, not an expense. It’s a buffer that absorbs financial shocks, ensuring your business’s survival.
Not only that, but insurance enhances your business’ credibility and shows customers that you’re reputable and trustworthy.
- Get Business Insurance (US SBA Guide)
- Types of Business Insurance Every Business Needs
- Business Insurance: What Is It & What Does It Cover?
7. Build Your Brand Strategy, Identity and Awareness
A successful business isn’t just about delivering a product or service.
It’s also about carving a unique identity in the marketplace.
Building a strong brand can be the key to standing out from the crowd and building trust with your target audience.
Here’s how you can navigate this journey:
- Brand Strategy: Begin by defining your brand strategy. It’s your game plan, outlining your business’s mission, vision, and values. It also pinpoints your target audience, unique selling proposition (USP), and market positioning — all of which you would’ve outlined in your business plan.
- Brand Identity: Next, create your brand identity. It’s the visible elements of your brand like the logo, typography, and color palette. Think of your brand identity as a uniform that makes your brand instantly recognizable. Your brand identity should visually represent your brand’s personality and values.
- Brand Awareness: Once your identity is established, focus on boosting brand awareness — this means getting your brand known and remembered. Use marketing strategies like social media campaigns, content marketing, SEO, and influencer collaborations to increase your brand’s visibility and reach.
Building a brand is a long-term investment, and it takes time to earn recognition and trust.
But the payoff can be immense because it’s what makes your business memorable, relatable, and ultimately, irreplaceable.
- 10+ Great Branding Ideas to Help Your Business Stand Out
- 7 Amazing Brand Positioning Examples (+ Takeaways for Each)
- 5 Brilliant Ways to Increase Your Brand Awareness
8. Build Your Business Website
As a modern aspiring entrepreneur, a website is non-negotiable.
You see, your website is the hub where customers can discover your offerings, connect with your brand, make purchases or book appointments.
It can also help you establish your online presence and reach a broader audience.
So, let’s dig into the key steps for launching your website:
- Define Your Purpose: Your website should be a direct reflection of your business goals. Do you aim to inform, to sell, or to entertain? Knowing your site’s purpose will shape its design and content.
- Choose a Domain Name: Your domain name is your website’s address. It should be memorable, easy to type, and related to your business name or industry.
- Select a Website Builder: There are several Content Management Systems and eCommerce platforms that provide user-friendly interfaces to build and customize your website, even without coding skills.
- Design Your Website: Keep user experience at the forefront. A clear navigation menu, consistent branding, and high-quality visuals are vital.
- Write Engaging Copy: Populate your site with engaging, relevant copy that offers value to your visitors. This could include product descriptions, blog posts, or customer testimonials.
- Test and Launch: Before going live, test your website thoroughly to ensure all links, forms, and scripts work correctly. Once you’re confident everything runs smoothly, it’s time to launch.
Remember, your website is an essential tool in building trust and credibility with your customers. And launching a well-designed, user-friendly website can open up a world of opportunities for your new business.
- 30 Small Business Website Examples
- Building a Business Website: A Small Business Guide
- How to Make a Small Business Website
9. Market Your Business to Get The Word Out
Marketing isn’t about shouting the loudest.
It’s about reaching the right people with the right message at the right time.
So now that your business is up and running, it’s time to let the world know you’re here.
Here’s how to get started:
- Engage and Interact: Marketing is not a one-way conversation. Engage with your audience, respond to their comments and messages, and show them that there’s a human behind your brand. When customers feel valued and heard, they’re more likely to become loyal advocates for your business.
- Incorporate Storytelling: People connect with stories, not just products or services. Share your business journey, highlight customer testimonials, or explain how your products are made. Make your brand relatable and memorable.
- Provide Excellent Customer Service: Great customer service is one of the best marketing strategies. It not only encourages repeat business but also leads to positive word-of-mouth referrals. When your customers are thrilled with your service, they become your ambassadors.
- Stay Consistent: Consistency in your branding, message, and posting schedule helps you build recognition and trust with your audience. It shows you are dependable and committed.
- Monitor and Adjust: Use tools to track the performance of your campaigns. Are you reaching your target audience? Are they engaging with your content? Use this data to refine your strategies and maximize your returns.
So, remember, successful marketing is less about a massive budget and more about authentic communication, relationship-building, and consistently delivering value.
- The Definitive Guide to Storytelling For Business
- 50 Ideas for Your 2023 Small Business Marketing Strategy
- 12 Powerful Digital Marketing Examples to Inspire You
10. Scaling Your Business to New Heights
A successful business isn’t a destination — it’s a journey of constant growth.
And navigating this journey will be a mix of challenges and triumphs.
So when you’re ready to grow your business, here are a few things to keep in mind:
- Set Clear Goals: Growth begins with a clear vision. What does expansion look like for you? Higher revenues? An expanded product line? Wider market reach? Define SMART, measurable goals that align with this vision.
- Listen to Your Customers: Your business should evolve alongside your customers’ needs. Regularly seek their feedback, monitor market trends, and adapt your offerings accordingly. Their insights will help guide your growth strategies.
- Invest in Your Team: A solid, dedicated team is vital as your business scales. Prioritize hiring, training and retaining individuals who share your vision and can contribute meaningfully to your growth.
- Scale Your Operations: As you grow, your operations need to keep pace. Evaluate your current systems and processes, identify bottlenecks, and leverage technology or outsourcing to increase efficiency and productivity.
- Explore New Markets: Expanding to new demographic or geographic markets can significantly boost growth. Whether targeting a different age group, lifestyle or entering a new region, expanding your reach offers greater opportunities.
- Monitor Your Finances: Financial health is critical as you scale. Regularly review your financial status, manage cash flow efficiently and ensure you have reserves for growth investments.
In business, standing still is the fastest way to move backward. So stay agile, embrace change and continuously strive for growth. You’ve got this!
And if you want help in taking the right actions to start and grow your business… don’t miss my FREE Workshop on unlocking the science of consistent action.
Because the key to a successful business isn’t motivation or even innate talent — it’s taking tiny steps each day! And when you attend, you’ll also grab my Companion Guide with the 5 brain hacks to beat resistance and smash your goals (backed by science!).
See you there!
- How to Scale a Business: 6 Tactics to Utilize
- The Five Stages of Small-Business Growth
- How to Grow a Small Business in 10 Easy Steps
- How to Grow & Scale a Business [Video]
And That’s How To Start a Business
That roller-coaster ride you’re feeling?
That’s what starting a business is all about.
With these 10 steps as your trusty roadmap, you’re well-equipped to get your business up and running.
But if you want to take it even further and get a major jumpstart on your business success… you need to take consistent action on the right things.
Which is what I’m sharing in my FREE Workshop >> Unlock the Science of Consistent Action: The Overwhelm-Free Way to Finally Start Building Your Business One Tiny Step at a Time
And when you attend, you’ll also grab my Companion Guide with the 5 science-backed brain hacks to help you beat resistance and smash your goals.
So grab your spot here and don’t forget to invite a friend 🙂
So, what business are you starting this year?
Let me know in the comments below.
Love it? Hate it? Let me know...
I appreciate, cause I found just what I was looking for. You’ve ended my four day long hunt! God Bless you man. Have a great day. Bye