How to Start Your Own Business in 10 Steps

Step 1: Conduct thorough research

The first step in how to open a brick-and-mortar business is to conduct thorough research. You must conduct a sufficient amount of market research before you decide to open your company.

Market research is important because you need to figure out how your company is going to fit in.

Who is your target market going to be? How are you going to reach them? How will you convince them to purchase your products and professional services instead of products from other companies that might be more established in your area?

If you collect this information, you can put your business in a position to succeed. This is an important part of finding the right clients for you and your business, and you will use this information to drive more sales.

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Step 2: Write a business plan

The next step is that you need to write a business plan. A business plan is going to be a general overview of how you will put your new business in a position to succeed. There are several important elements that need to be included in your business plan. They include:

• Executive summary: This is going to be an overarching statement of your company. You should mention what your company does, why your products and services are different from others, and who will be in charge of your business.
• Business description: You need to have a business description, which will go into the details about how your company will conduct its operations.
• Products and services: You should have a section that discusses the product or service you provide, including other products and services you may offer down the road.
• Marketing strategy: You need to have a marketing strategy, which should include the marketing optimization tools and techniques you plan to leverage for your business.
• Operations and management: You need to go into detail regarding how you will handle day-to-day operations and what the management structure of your business will look like.
• Financial plan: You should discuss a financial plan. This includes your overall budget, revenue targets, how you will spend your money, and where your funding will come from.

Once you have these components in place, you should have everything you need to get your business plan completed.

Step 3: Get funding

Your next step is to get funding. It is difficult to launch your business without any capital, but if you don't have any sales, there is no money coming in. There are several ways you can obtain funding for your business. They include:

Bootstrapping

This is the process of using your personal savings to fund your business. Even though this is probably where you will start, it will likely run out pretty quickly. Then, you will need to explore other options.

Family and friends

You can talk to your family and friends about loaning you money for your business. If they believe in what you're doing, they might be willing to provide you with money without charging interest.

Crowdfunding

You may also want to try crowdfunding to see if you can get small donations from a lot of people. You may want to provide them with items in return, such as cups and t-shirts.

Small business loan

Ultimately, you may need to ask for a small business loan. There might be a local bank or credit union in your area that can provide you with a loan at a favorable interest rate.

Consider these options if you are looking for a source of funding for your small business.

Step 4: Decide your business structure

Before you can launch your new business, you also need to decide on how you want to structure your business. There are several options available. They include:

Sole proprietorship

If you fail to choose a business structure, your business will default to a particular classification. Opting for a certain structure, however, comes with personal liability for your business's debts and obligations.

When running a business, a sole proprietorship can be a good starting point, but you may want to change to a more strategic business structure as your business evolves.

Partnerships

If you have another person going into business with you, you may want to choose this option. You can either choose a limited partnership or a limited liability partnership.

Limited partnerships have one partner with all the liability, while limited liability partnerships give a limited amount of liability to every business owner.

Limited liability corporation (LLC)

Usually shortened to LLC, this is a great option that helps you protect your personal assets in the event of a lawsuit. This could include your vehicle, your house, and your personal bank account, among other assets.

C corp

A C corp provides you with the most protection from business liability. C corporations are treated as separate entities from the small business owner or owners, meaning the corporation is subject to corporate income taxes, and individual small business owners or shareholders are subject to personal income taxes.

Even though it will shield you from personal liability, it requires more money to form, there's more oversight from the federal government, and you must deal with double taxation.

S corp

An S corp is a strong option because it prevents the double taxation that is applied to C corps. With an S corp, you can pass through some profits and losses to the small business owners while avoiding corporate taxes.

Take a look at the eligibility requirements and figure out which option is best for your business.

Step 5: Register your business with the government

If you want to run a successful business, you must remain compliant with all government rules and regulations. This means that you need to get a business tax ID.

Just as you pay personal income taxes, you also need to pay business taxes. Your business will collect profits and it will report losses. You will need to report both on your taxes, and your business tax ID is like a Social Security number for your business. You must comply with all business tax laws if you want to avoid fines and sanctions.

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Step 6: Apply for the proper permits

Next, you need to apply for the proper permits if you want to run a successful business. The exact type of permit you need to apply for will depend on the type of company you run.

For example, if you run a bakery or a restaurant, you will need to get a food seller permit. If you want to sell alcohol, you may need to get a liquor license, but the exact type of alcohol license you need will depend on the state in which you operate.

Take a look at the products and services you provide and make sure you apply for the right permits.

Step 7: Obtain business insurance

You need to get business insurance to make sure your company is adequately protected. Your business is one of your most valuable assets, and you need to protect it with the right insurance policy.

There are several types of business insurance you may need to get. Some of them might be wrapped up in a single policy. Some of the insurance policies you should consider applying for include:

General liability insurance

You need to make sure you have general liability insurance. This will protect your business in the event someone files a lawsuit against it.

For example, if someone enters your business, slips, and falls, they could file a lawsuit against your company. General liability insurance might protect you in this case.

Commercial property insurance

If your business owns the property, you may need to get commercial property insurance.

Commercial property insurance is like home insurance for your business. If something happens to the property, your commercial property insurance can protect you.

Business interruption insurance

Business interruption insurance is important if your business has to cease operations for a certain amount of time.

Then, business interruption insurance may replace the revenue that you lose as a result of the interruption. You should take a look at the details of your business interruption insurance policy to make sure you understand when it comes into play and when it does not.

Commercial vehicle insurance

You should also consider getting commercial vehicle insurance. This is similar to the insurance policy you have on your personal vehicle.

Commercial vehicle insurance is designed to protect your commercial vehicles in the event of an accident. Make sure it covers not only the property but also any medical bills stemming from the accident.

These are a few of the most common types of business insurance policies you may need to get. You may want to reach out to an insurance agent to make sure you aren't overlooking any important sources of insurance.

Step 8: Hire the right team

To place your business in a position to be successful, you need to hire the right team. There is a saying that it is difficult to find good help these days, but if you think carefully about who you want to work with, you hire employees who are the right fit. A few factors you need to consider include:

Suppliers

Your business will probably have suppliers. You need to find the right suppliers for your company.

Ideally, you should find multiple suppliers who can handle different areas of your business. That way, if one supplier has an issue, your entire business operation doesn't grind to a halt.

Staff

Think about how many staff members you need. Then, think about the qualifications you are looking for.

What type of training should they have? What type of experience should they have? How much do you want to pay them?

Do some market research to figure out what you will need to pay to be considered competitive for the right employees.

Contractors and partners

There is a good chance that you will also need to hire some independent contractors or partners.

These are people who are not considered employees, but they are still important to your business. You should try to find contractors and partners who would complement your skill set well.

If you know what your weaknesses are, find people to cover for those weaknesses with the right skills.

Hiring the right team can help you increase your chances of launching a successful company.

Step 9: Market your products and services

You may provide the best products and services in the world, but if nobody knows about them, you will have a difficult time generating any sales.

Therefore, you need to think carefully about how to market your products and services, and you can do so with a strong grassroots marketing campaign through Mailchimp.

You must have a comprehensive marketing plan in place, and Mailchimp makes it easy to do exactly that. The overwhelming majority of people have their phones in their pockets at all times, so Mailchimp provides you with an easy way to reach them. Some of the top benefits of using Mailchimp include:

• Target Your Audience: You can segment your target market into multiple parts. Then, you can personalize the email to each one of them, helping to increase your conversion rate.
• Re-Engage Subscribers: If you have subscribers who have fallen off a bit, you can re-engage them using Mailchimp. That way, you can not only acquire new customers but also keep your current ones.
• Detailed Analytics: With access to detailed analytics, you can figure out what is working and what is not. That way, you can figure out how to optimize the results of your marketing campaign.
• Easy to Use: Even if you do not have a lot of experience using advanced marketing tools, Mailchimp makes it easy. There is a convenient user interface that will walk you through the process.

For all of these reasons, you need to consider using Mailchimp to orchestrate your marketing campaign. That way, you can maximize the return on your marketing investment.

Other ways that Mailchimp can help you market your business including with paid advertising, social media management, smart content optimization, and email marketing.

Step 10: Grow your business

Finally, you need to grow your business. As your business gets off the ground, keep an eye on who is visiting your website, who is ordering your product and services, and what people seem to like.

Encourage your customers and clients to leave reviews. You may want to incentivize them to do so by providing them with a small discount when they make a repeat purchase or when they leave a positive review. You can even use Mailchimp to offer discounts, promotions, and coupons to your customers.

If you find that your customers and clients tend to gravitate toward a specific product or service, you may want to expand that product line. You may even want to talk to your potential customers to see if they have any ideas about more products and services you can offer. You should keep an eye on your market to identify opportunities for expansion.

If there is a need that is not being met by the current market, that might be a good opportunity for your company.

Finally, do not forget to check in with your employees from time to time. Employee retention is very important, and you need to do everything you can to keep them around.

How to start a business: Frequently asked questions

Starting your own small business can bring you personal financial freedom. It can form the foundation of generational wealth.

We all have heard stories about fabulously successful small businesses that go on to become major corporations. And most of us know one or more entrepreneurs who "have it made" after years of success in their own small enterprise that provides jobs for their workers and security for their families. But all of these successful small businesses grew out of the right mindset.

How can I come up with a business idea?

What's the right mindset for starting a small business? Here are three basic principles.

• You are ready to start your small business when you have achieved consistency in your planning. It's OK to think big. You just need to be able to put a foundation under your castle in the sky.
• You are able to overcome analysis paralysis. You have a sense of acceptable risks that allows you to go ahead even if you aren't totally sure of your outcomes.
• You are building your business around something you love to do. The best small business ideas involve finding the resources to do something you have never been able to accomplish before.

Once you have cleared these hurdles, you are ready to dive into operationalizing your business plan. Chances are remote that you will be a billion-dollar business in a year, but even "small businesses" can be financially significant.

How do I register my business?

There is nothing to stop you from doing consulting or making sales as a sole proprietor.

You may need a business license before you offer goods or services to the public (you get a business license from your city, county, state, or province), but in most North American jurisdictions, you can get started right away.

But don't.

Take the time to register your business name with your state. This gives you a unique presence in your market. You don't want to spend hours and dollars building your public presence only to have your business name usurped by a competitor. You also want to avoid presenting the appearance of a competitor and taking on legal liabilities when their customers are dissatisfied with them.

Even better, register your business as a limited liability company, better known as an LLC. The LLC protects your personal assets, for instance, your retirement bank account, your house, and your car, from legal judgments against your business. It also gives you access to significant federal income tax advantages if you earn income in the United States.

You can organize your small business as a corporation. Sometimes this makes financial sense. Ask your CPA for more details.

What is considered a "small business"?

The US Small Business Administration (SBA) uses the North American Industry Classification codes to label businesses as small, mid-size, or big.

The exact figures differ by the kind of industry you are in, but in general, a business is "small" if it has:

• Revenues of $1 million to $4o million, and
• 100 to 1,000 employees.

A software developer, for example, might be considered if it has 150 employees. A SaaS vendor might be considered small if it has $7 million in sales annually.

These guidelines establish the upper limits for certain kinds of financing. You won't get SBA financing if you exceed them, but you may get SBA financing if you have not achieved the definition of a small business yet.

How do I manage finances?

The cardinal rule for small business finances is easy to remember:

Keep your business accounts separate from your personal accounts.

There isn't actually a rule laid down by the IRS or state tax boards that you must keep business and personal accounts separate.

Problems come about when you commingle funds, and you can't document profits and losses to a lender or a tax auditor. Commingling your accounts may also jeopardize your LLC status, which protects your personal assets from legal claims against your business.

How do I start hiring employees?

If you are just starting out as an entrepreneur, one of the aspects of running a small business that is most likely to cause you serious problems is failure to collect, file, and pay your payroll taxes.

You must pay your employees' withholding to the IRS. You must pay your share of FICA. You cannot neglect worker compensation insurance and unemployment taxes.

Don't leave the accounting side of payroll management to chance. Get off on the right foot with your employees and with the tax authorities. Don't let a payroll scandal ruin all your hard work.

Set your business up for success with Mailchimp

These are a few of the most important steps you need to keep in mind if you are wondering how to start a business. There are a lot of challenges that come with starting a new business, and there are some hurdles you will need to overcome.

Fortunately, this is not something that you need to do on your own. There are plenty of tools you can use to help you put your business in a position to succeed.

For example, you can take advantage of Mailchimp, which makes it easier for you to orchestrate a successful marketing campaign. You can generate a marketing campaign that is customized to your strengths and also covers your weaknesses.

That way, you can convince your target market to take a chance on your product and services.

Sell more stuff with Mailchimp's e-commerce platform. Build your store, manage orders, and find new customers.