Have you always dreamed of starting your own business? Being a business owner can be incredibly rewarding if you have an entrepreneurial spirit and have always dreamed of being your own boss. If your New Year’s Resolution for 2020 is going to be starting your own business at last, then you need to have a plan in order ready to get started. Here are the essential steps to get your business started in 2020, and start a business with all the right tools to succeed.
Step One: Research
If you’re keen on starting a business, you probably have a business idea that you’ve been nursing for a while. If you’re going to make this idea into a feasible business, you need to add a dose of reality to your dream. Do some research to make sure your idea has the potential to actually succeed.
For your business to work, it must solve a problem, solve a need or offer something that your market wants.
Start your research with a few different methods, such as classic research, focus groups and good old fashioned trial and error. Explore the market and answer some important questions. Be realistic with your answers.
- Is there a need for your services or products?
- Who needs your products or services?
- Is someone else offering something similar?
- Who are your competition?
- How will your business fit into the current market?
Step Two: Plan
Any new business needs a solid business plan. Your business is your blueprint and roadmap that will guide your business from new start-up to business growth and becoming an established business. Depending on the kind of business you plan to start, you will need a tailored kind of plan.
If you plan to fund your business with support from a bank or an investor, you will need a traditional business plan to get investors on board. These kinds of business plans are usually long and very thorough. Most investors will expect to see a common set of sections to help them decide if your idea is viable.
If you aren’t going to seek this kind of report, you can get away with a simpler business plan. You just need a plan that gives you clarity on what you want your business to achieve, and how you’re going to do it. A working business plan can be improved over time, but having something written down really helps.
Step Three: Plan Your Finances
Depending on the business, a small business may not need much startup capital, but it will need some funds to get started. You will need to have enough to cover your expenses until you can start earning profits.
Put together a spreadsheet with estimates for the one-off costs of starting your business. This should include things like license and permits, insurance, branding, market research, inventory, trademarking, property leases and other costs like this. Anticipate what you think you will need to spend to keep your business going for the first twelve months. This should include things like rent, utility bills, marketing, production, supplies, salaries and so on.
The combined price of this estimates is the initial investment you will need to get started. You can get this money together in a number of ways. You could opt for financing, a small business loan, a small business grant, angel investors or crowdfunding. You could opt for a merchant cash advance, which is an unsecured loan paid back with a percentage from your credit card sales over the first few months of your business.
You could also supplement this startup cash with your own savings to avoid having to borrow as much money. For most businesses, a combination of a few of these options usually works best to get you started.
Step Four: Choose Your Business Structure
There are a few options for business structures available for your small business. You could set up as a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The option you choose will impact several factors in your business, from your name to your liability and how you file your taxes.
However you choose to structure your business in the first place, remember that you can reassess and change your mind later as your business grows and its needs change.
To make the best choice, invest in a consultation with an attorney or CPA. They can advise you on the best choice for your business and clearly explain the advantages and disadvantages of the different business structure options.
Step Five: Register Your Business Name
The name of your business is important, as it will play a part in every part of your business. Make sure you choose a good one. When choosing a name, you want to make sure it is clear, easy to spell and understand. Check on any potential connotations with some googling, to make sure you don’t accidentally copy someone else’s name, or name your business by something that is slang for something inappropriate.
When you have chosen a name, check to see if someone has already trademarked it. If they haven’t, go ahead and register. This is usually done when with the formation paperwork. Make sure you also claim your social media channels in your new business name and register a domain name ready for a website, so nobody else can get it.
Step Six: Get Your Licenses and Permits
Paperwork is a big part of the process of starting a new business. Check to see what licenses and permits you might need to operate in your area and get these sorted out before you start working. Different businesses may need some different kinds of permits.
Step Seven: Find An Accounting System
The best way to get started on the right foot with a new business is to have all your important systems in place from the beginning. An accounting system is the best place to start with these systems.
An accounting system is necessary to create and properly manage a budget, set your rates and prices, conduct your business and file your taxes correctly. You can set up an accounting system yourself or hire an accountant to help you to make sure everything is done correctly.
Step Eight: Set Up A Business Location
A place of business is important for the daily operation of your business. Depending on the nature and the size of the startup that you’re planning, this place of business could be a home office, a desk in a co-working space, a shared or private office space or a retail location.
Think about how much location will matter. Will you be hiring staff or need customers to be able to easily access your business? Do you need good road links for deliveries? Do you need plenty of room for expansion, or do you just need somewhere quiet to work? If you’re going for commercial space, consider whether it makes more sense for you to buy or lease the space.
Starting a business takes a lot of planning, and it’s important to make sure you’re ready before you start hiring employees or targeting customers. Do your research, spend time constructing a solid business plan, and make sure you have all the permits, software and finances in order to get your business started in the best way. With hard work, a startup can be an incredibly rewarding thing to do, and can be worth the risk and the stress of striking out on your own.