Have a great business idea you’ve been dreaming about bringing to life? We get it. Ideas can be exciting but executing can be hard. The prospect of starting a business can seem overwhelming. But with some direction and careful planning, you can turn your business idea into a thriving career. So, where should you begin?
Right here, with this eight-step guide for how to start a small business:
- Do some soul searching. Becoming a small business owner is a huge undertaking and can truly change your way of life. Before you invest a lot of time and money into it, take a moment to evaluate why you want to become a small business owner. If the answer is that you just want to get out of your current job, that’s not a good enough reason. Are you really ready for the challenges you might face by creating a business from scratch? If you answered ‘yes,’ keep reading.
- Solidify your business idea. Think about how to make it successful. Are you addressing a particular need for an existing set of customers? How do your skills, interests and prior experience differentiate you from the competition? Putting your answers to these questions down on paper will not only motivate you, but also serve to prepare you for writing a business plan later.
- Check out the competition. No matter how original your small business idea may seem, there’s sure to be someone else out there doing something similar. Spend time researching your target industry and its success rates — the U.S. Small Business Administration website is a good place to start. Also, look at your competitors and, if possible, survey potential customers for your prospective small business to figure out how you can meet their needs.
- Test out your idea. Do a trial run by offering your products and services to a few prospective customers for free in return for their honest feedback. This will help you determine what works — and what doesn’t — before you actually launch your business. This type of information can also go into your business plan.
- Create a business plan. Take everything you’ve done so far — the market research, reasons for starting your business and feedback from others — and turn it into a business plan. Looking for guidance to create one? There are numerous business plan templates available online.
- Secure funding. Now that you have a business plan, you can focus on financing your business. Unless you’re funding it yourself, you should consider pitching it to friends and family for a potential loan, crowdfunding online, applying for a small business grant or seeking investors.
- Make it legal. Before you begin taking on customers, make sure you get the basic legalities in order. Choose a business type (e.g., LLC, DBA), decide on a name and register your business with your municipality. You’ll also need a federal tax ID and state tax ID. Lastly, you’ll need to establish a business banking account. Depending on your line of work, you may also need to acquire a permit, license, copyrights, trademarks or patents.
- Get to work. The next step may be the most daunting: acquiring clients and exceeding their expectations. As you get your business going, solicit feedback from your customers so you can continue to improve your products and services. Learn from your mistakes (because you’ll probably make a few) and try to stay nimble. You’ve done a lot of work to get to this point, but you’ll find there’s always room for improvement.