More than 99% of the businesses in the United States are small businesses. If you’re looking to start a small business, you’re not alone — roughly 4.35 million new business applications were submitted in 2020.
Starting a new business can yield a variety of benefits. You’ll be able to choose your own hours and generate profits, as long as you market products or services that customers want. As the head of your business, you’ll also have the freedom to make decisions that drive your company toward success.
If you’re looking for daily independence and the opportunity to make money in an industry of your choice, starting your own business might be for you. Consult the below steps to get started in formulating all aspects of your new company.
Write a Business Plan
Before you launch into the specifics of operating a new business, you’ll need a strategy. No matter how you structure your business plan, make sure you include a few key pieces of information such as your company’s mission statement, your internal structure, your marketing strategy, and anything that could give your business a competitive edge.
Even if you’re not ready to name your company or onboard employees, a business plan can serve as an excellent first step in starting a business.
Secure Startup Funding
When creating your business, you’ll likely need to secure startup funding. You can secure these funds in a variety of ways, though some businesses rely on investors. You might consider trusting private investors, like friends and family members. Other companies will source investors from social media, or by crowdsourcing.
You may also be able to secure startup funding through a loan. Contact your bank to apply for a small business loan, or trust a private business loan vendor for startup funds. If you do opt for a loan, make sure you have a plan to pay back the funds.
Register Your Business
You’ll need an officially registered business before you can begin to accrue sales. To register a business, you’ll first need to decide on the type of business you want to run. Options like a sole proprietorship, partnership, or limited liability corporation (LLC) might be best for you depending on your needs and company size.
You’ll need to register your company with an official name and a place of business, so make sure you decide on those details before beginning your application. Finally, you’ll need to register your business with the IRS to obtain your employer identification number (EIN).
Once you register your company with the IRS, you may also need to register with the state. Depending on the type of business you’re opening, you may also need to obtain one or more extra permits or licenses. Use the license and permit portal, made available through the U.S. Small Business Administration, to identify any extra documentation you might need to file.
Though the process might be similar, there are major differences between registering a business and registering a trademark. Depending on the type of business you decide to open, you may need to register a trademark in addition to your business.
During the trademark filing process, it’s important to understand the difference between the ® and ™ symbols. Before your trademark is accepted, use the ™ symbol to denote any to-be-trademarked brand assets. After the trademark process is complete, you can use the ® sign to indicate a fully functional trademark.
Create a Checklist of What You Need
No matter the type of business you’re opening, there are a few steps that every new company needs to satisfy.
- Purchase any necessary trademarks — Trademarks help your company stand apart, and they demonstrate to the rest of your industry that you retain full ownership over your brand’s name, processes, and product portfolio.
- Stock workspaces with office supplies — Office supplies like computers, notepads, writing utensils, and other essential tools help you fulfill daily tasks.
- Fund marketing campaigns — To expand your company’s reach and target new customer segments, consider funding one or more advertising campaigns.
- Register for software programs that improve business — Your company may need to register for a specific software program that helps streamline operations.
- Connect with an accounting company for bookkeeping and tax help — If your company has a particularly complicated product ordering system, or if you qualify for tax exemptions, you may want to trust a proven accounting firm to handle your finances.
- Obtain any industry-specific permits or licenses — Your company may need to obtain additional permits or licenses, depending on the industry which you service.
- Prepare legal documentation for future use — Before you need to use any legal stationery, it’s a good idea to prepare legal document templates for use.
These and other preparatory steps can help equip your company for business, as soon as you open your doors or begin online sales.
Track Business Data Carefully
Depending on the nature of your company, you may want to implement analytical tracking that helps you keep track of web and foot traffic.
You can learn a lot from the information you gather, especially after you take the time to analyze the data you’ve collected. The right data sets can teach you more about customer preferences, web and foot traffic trends, average order values, and opportunities for product bundles.
Behavioral data is some of the most valuable information you can obtain as a business owner. Your behavioral data indicates how customers interact with your brand, your website content, or your products.
If you can learn to interpret customer data, you’ll be able to conclude customer behavior that can immediately impact how well your company operates. You’ll be able to spend more time marketing popular products, optimize poorly-performing website pages, and even launch email sequences to follow up with satisfied customers after a purchase.
Profits and Losses
It’s also important that you track corporate profits and losses. Track weekly, monthly, and quarterly sales reports for a good indication of the money you’ve earned, or lost.
Even though it might be painful to read reports on lost revenue, this step is important in helping you diagnose and solve problems before they compromise corporate success. It’s very possible that over the same period, some products sold well while others decreased in popularity. Consider shifting marketing efforts according to profit and loss reports.
Make sure to pay close attention to transactional trends for any products you’re marketing. If a product’s popularity improved in tandem with a large marketing campaign, you’ve likely succeeded in generating more customer awareness.
When you’re analyzing marketing reports, pay attention to more than just total sales generated over a specific period. Examine how well your marketing content performed, and how many customers visited your website after viewing your ads.
Marketing doesn’t always increase product popularity. If you don’t notice improved sales or brand awareness for a product you’re marketing, consider other methods that may yield better returns, such as email sequencing, or social media.
Expand on Your Skills and Knowledge
Regularly, business owners depend on a wide variety of skills. Hard skills in marketing and data analysis help business leaders drive companies toward improved sales. At the same time, soft skills in leadership and empathy help business owners relate to, and dialogue with, the employees and customers that keep the company running.
Business owners might want to prioritize the following skills:
- Interpersonal communication — Effective, ongoing communication promotes a healthy level of transparency between business owners, employees, and customers.
- Bookkeeping — When you keep comprehensive records of your sales, purchases, and other financial affairs, you’ll minimize the possibility of misused or misplaced funds.
- Financial asset management — Business owners should take time to allocate funds appropriately throughout the company, ensuring that all investments yield sufficient returns.
- Business operations — Ensure that your company runs smoothly by paying specific attention to monthly sales, employee morale, and other data that indicates how your business is performing.
- Teamwork — Constant collaboration is important for ongoing company success, particularly when problems arise that are too large to be solved by a single employee.
While running your business, you might decide to outsource specific responsibilities. Outsourcing certain tasks can benefit your company in a variety of ways, helping you save time and reduce costs for ongoing or repetitive tasks. Outsourcing also allows you to retain focus on high-priority items while delegating tasks to individuals with expertise in specific fields.
When it comes to legal consultation, outsourcing can yield great results. Particularly if you’re facing an infringement of intellectual property or other intricate legal issues, professional legal help can help you limit damages and navigate legal proceedings.