When you decide to start a small business, you need to come up with a unique business idea and prepare yourself to take the plunge.
Is that enough to start a small business?
You need to manage a lot of things and make many important decisions.
Starting a small business requires planning, raising funds, completing legal paperwork, and a lot more. While it is an exciting proposition, it can be equally challenging, especially for first-time entrepreneurs.
There’s no need to worry. Read this article to find out the right way to start a small business and turn it profitable.
1. Conduct Market Research to Start a Small Business
Every successful business starts with a business idea and a robust plan to turn it into reality. You need to conduct market research to validate your idea and find information about your potential buyers and competitors.
You should conduct market research to determine:
● Is there a demand for your product or service?
● How many people will be interested in making purchases?
● Who are your ideal buyers and which channels do they use frequently?
● How many businesses are already offering the products and services that you want to sell?
● What makes your business idea unique? Why should prospects choose your brand over your competitors?
● What do your competitors lack?
● How should you price your products and services?
Conducting market research will help you discover industry trends, analyze your competitors’ positioning in the market, and give you insights to make informed decisions.
2. Write a Business Plan
You should definitely create a business plan that outlines the information you gathered from your research and your specific plan. It is a roadmap for how you will establish your business as a recognizable brand and scale it to drive growth. Your business plan should define how you want to structure, run, manage, and grow your small business.
It should include details about:
● Your company’s legal structure
● Ownership and operational structure
● Service or product line
● Marketing and sales plan
● Funding requirements and sources
● Financial management
● Growth plan
3. Pick a Business Name
Your business name plays an important role in every aspect of running and growing your business. You should choose a name that is:
● Unique, memorable, short and crisp
● Relevant to your niche
● Available in your state (check with the secretary of state)
● Available as a domain name
● Available as social media account names
● Free of copyright and trademark infringement issues
You should brainstorm and list all of the potential business names that you could think of. Once you’ve got a list of names, you can filter results based on their uniqueness, availability, and branding potential.
4. Register Your Small Business
To conduct business in the United States, you will have to register it as a legal business entity.
The main business entity options are a Sole Proprietorship, a Partnership, a Limited Liability Company (LLC), or a Corporation. Each business structure offers its own set of rules and regulations and benefits.
The entity type you choose will impact many factors from your business name to your personal liability and taxation options. However, no matter which entity type you choose, you will have to complete state and federal filings to operate your business legally.
Many small business owners choose to form an LLC due to the flexibility this business structure offers in terms of ownership, management, and taxation.
It is a good choice for first-time entrepreneurs.
Registering your small business requires that you submit a lot of paperwork and fulfill legal formalities. All of this can be quite challenging and confusing if you do it by yourself.
Don’t worry. You can leverage GovDocFiling’s state and federal filing service packages that help entrepreneurs like you register and start a small business.
The start up packages do all of the legal paperwork for you, as well as provide essential legal documents, tax analysis, and a free business start up guide with additional savings on business services. All of that, for a fraction of the cost of other filing services, or using a lawyer or accountant.
5. Generate or Secure Funds for Your Business
Starting a small business may not require a lot of money but you will need some initial investment to get your business up and running.
Many entrepreneurs start their businesses with their own savings. Or, you can also find other ways to fund your small business.
You can generate funds with the help of:
● Family and friends
● Small business loans
● Angel investors
The best way to start a small business is through bootstrapping, especially if you’re starting a service-based business. You can easily start your business using personal savings and then invest a part of your earnings to grow your business.
6. Acquire Necessary Business Licenses and Permits
If you want to keep your business running smoothly, you should ensure that it stays legally compliant. You may need licenses and permits to run your small business depending on the nature of your business, your industry, business activities, and other factors.
For example, if you want to run a small business that deals with alcoholic beverages, you may need to acquire proper licenses and permits from the Alcohol and Tobacco Tax and Trade Bureau.
Some specific state and local governments may also require business licenses and permits. You should check with the state where you want to run your business to see which licenses you may need to stay legally compliant.
Some licenses come with an expiry date. You should keep track of those dates and renew the license before it expires.
7. Promote Your Small Business
The most important part of any business is its customers. Once your business is up and running, you should look for ways to reach your target audience, generate qualified leads, and drive conversions.
When creating a marketing plan, you should list the strengths of your business model and identify opportunities to stand out among your competitors.
You should build a business website and create a strong presence on the top social media networks. You can also encourage your customers to share their experiences with your brand on social media to amplify your reach.
Many small businesses also partner with niche influencers to take advantage of their popularity and influential power.
Ready to Start a Small Business From Scratch?
Now it’s your turn to follow the steps we’ve mentioned above and start your entrepreneurial journey.
You should begin by validating your business idea, choosing a legal entity type, and registering your business with the Secretary of State. You will also have to craft an effective marketing plan to reach, attract, and engage your potential buyers.
Do you need help starting your own business legally? Get in touch with our business formation experts and we’ll guide you through the process.
Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.