How to Start My Own Business: Everything You Need to Know
This will help you avoid creating assets and spending money branding a name you can't obtain and determine whether you need to file a business name reservation.16 min read
How to Start My Own Business
How to start my own business is a question that many people ask and, sadly, not having precise answers keeps many would-be entrepreneurs from reaching their dreams. If you see signs that it’s time to start your own business, start to do industry analysis, find the ideal market, and stop making excuses.
50 Signs You Need to Start Your Own Business
- You have a lightbulb moment. You have an entrepreneurial spirit, and now you’re ready to take steps to start a business.
- Your mind is go-go-go. Constant thinking is a common entrepreneurial trait, for better or worse. If you have this feature it may be time to get out of the daily rat race and start to put your reflections into motion.
- You have passion. If there is one business concept you love, it may be today that you finally turn it into a reality. For entrepreneurs and company owners who are in love with what they do, they are unstoppable when it comes to transforming their vision into a product or service to offer the world.
- Independent you. As a problem solver, you try to solve most issues alone, yet you’re not socially awkward, or you will ask for help if needed.
- You have motivation. When you get up in the morning, you know what to do and go about doing it, without needing to be reminded about it by someone else.
- You’re organized. When you first start a business, it’s usually on you to track financing" meaning_of_life="42" target="_blank">finances, dole out duties, and draw investors, so you need organizational abilities.
- You enjoy helping people. With a strong desire to help others with what you provide through your company, you’re likely a great candidate for starting a business. The passion for assisting people in bettering their lives can help motivate you through rocky times of business ownership.
- You can create a better business. Whether it’s egotistical or not, you are confident in your ability to build a company that is better than the others.
- You feel trapped job-wise. Do you dread going to work? If you’re not feeling your talents are being used well, then you may just have to be your own boss or at the very least try something new.
- You want to show your vision. If you have an idea but everyone else is panning it as not being doable, you might take this talk as motivation to go for it, one-upping those who said it wasn’t possible.
- Leave a legacy. If you want to make your efforts known and leave a legacy, like Bill Gates or other top entrepreneurs, here’s your opportunity.
- You desire to be your own boss. Do you relish control? If you’d rather tell others what to do than the way around, then you’ve got a boss mindset.
- Research shows a rise in hiring rates for independent workers. As per MBO Partners research, more independent workers, including freelancers and business owners, are on the rise, and will likely continue to increase
- Risks can be taken. Are you single or kid-free? If so, you likely won’t have to worry about supporting others, so take this time in your life by the reins and be adventurous, starting your own business.
- Commuting is not your thing. Traveling to and from work can be a time waster. If you start a business in your home, then you’ll just have to travel a couple of feet, on your own two feet.
- Strong work ethic. If you’re not sweating working some 10- or 12-hour days then you’re willing to put in the work required to start a company, and that can pay off down the road.
- Exploring is one of your key traits. If you are bored by monotony and instead crave uncertainty, then you’re someone who is up for the challenge of being a business owner.
- You strive to improve. If you’re always reaching to be better and do more, then you have a type of personality that fits with business ownership.
- Contractors are getting more projects. Looking around at your current workplace, is your employer outsourcing for jobs you know you’d be able to do better? If so, seeking to provide this product or service yourself may be what you decide to do.
- Teamwork excites you. You’re looking to build your team from the grassroots with others who have the same vision and are in it for the long haul with you.
- You detest working for others. Are you tired of taking orders? Then start to figure out how to be your own boss.
- You’re in a tight spot. Sometimes when the going gets tough, from mounting bills to scraping money together to buy groceries, it’s all you can do but take a step into the unknown and start a new journey.
- Job creation appeals to you. Giving people around you a new means of employment that uses their skills well is within your reach if you start your own company.
- You’re passionate about crafting a new product or service. You see a need to fill in the market. Bring it to fruition!
- The office lifestyle doesn’t fit you. That restricted feeling in your current work environment keeps gnawing at you, especially since you know you are capable of working how and when you want to your own business.
- You desire your own schedule. If you’re a night owl who works best a midnight, then you may relish in creating your schedule rather than being told within which hours to work.
- A creative spirit. If you’re always thinking outside of the box and it’s not being appreciated then perhaps it’s time to get out there and express yourself by setting up the business of your dreams.
- Your desire is to uplift. Are you looking to inspire others? If you seek this empowering feeling, then you can get your fill of it as a business owner, inspiring people around you.
- Craft a legacy for your children. If this idea appeals to you, then you may want to look into self-employment.
- You like being hands-on. If you don’t mind working hard and getting messy some days, then why not starting doing these things for yourself rather than for another person?
- You want a new challenge. If your current job leaves you feeling bored, then it may be time for a new adventure.
- Problem-solving is in your wheelhouse. If you are the problem solver in your family or group of friends, then this is a signal that you have the capacity to start your own company.
- You enjoy learning and bettering yourself. If your quest for knowledge never ceases and you are driven to improve your skills, then you will have much to draw from as a business owner.
- Doing multiple tasks doesn’t faze you. If you can wear a lot of hats in one day and aren’t losing your head under the pressures of multitasking, then you’re off to a great start.
- You’re okay with failing. There’s going to be failures whenever you own a business, no doubt about it. If you’re capable of overcoming mistakes and getting back on the horse then you have characteristics of a wise business owner already.
- You want to control your own job security. If you work for someone else, then the fate of your employment rests in their hands. Rather than worrying about laid off tomorrow, you could start your own company.
- You see an opening. If you notice a gap in a particular industry that’s not being filled, and you have an idea of how to do so, maybe it’s your time to get in there and provide it.
- There’s a lot of talent around you. If you look around and see a lot of skilled people who seem to be wasting their talents, perhaps you could start a business that uses their capabilities to the max. Off them stock shares or other benefits to entice them.
- Now’s the time. The biggest error of start-ups is likely procrastination. Rather than making excuses not to start your own business, you could take the first step now.
- You see tax benefits. As a small business owner, you can apply for tax incentives. Make the most of them.
- Seeing results is important. If you like seeing the direct results of your activities with your own eyes, then you get this opportunity when you run your own business.
- You are a good communicator. If you are personable, then you’ll find networking and other business-related activities to be right up your alley.
- You have an innovative spirit. If you’re an outside-of-the-box thinker, it might be now that you decide to pursue your ideas by building up a business from scratch.
- Feeling less appreciated. Are you being forgotten when it comes promotion time? Or maybe you don’t feel satisfaction in your current job. If so, it might be time to get out on your own to feel like you’re making a difference.
- Leadership is in your blood. If you feel like a born leader and motivator, then you’ll find it easier to bring in others to your startup.
- You seek thrills. Brainstorming a business idea and following it through is amongst the most thrill-seeking of activities.
- Put your street smarts to use. Are you book smart and street smart? If so, combine these skills and put them toward work that genuinely excites you.
- Many online resources exist for entrepreneurs. You see there are several Internet-based tools and tips available for a new business owner.
- You're all set to cut loose. If you have been wanting to explore your entrepreneurial side for a while now, doing so may make you more content than you even realized.
- You don’t want your work to feel like work. Who says that your career shouldn’t bring you pleasure? If you desire a workplace that brings you happiness, then it may be time to take the leap to start your own company, based on the vision you’ve had for a while. To quote Thomas Edison, “I never did a day's work in my life. It was all fun!”
7 Steps to Starting Your Own Business
The seven steps to begin your own business are:
- Do a self-evaluation
- Analyze your industry
- Legalize it
- Start planning
- Achieve financing
- Start business operations
- Trial and error
Conduct a Personal Evaluation
Be honest with yourself about your strengths and weaknesses, working with your strengths to craft the perfect job for you.
Begin a self-assessment by asking yourself questions like “Why am I launching a company?”, “What is my skill set?”, and “What is the amount of money I have to use?”
Use the answers to help set goals, plan, and understand yourself better. Your strengths and imperfections will affect business operations and you can determine how exactly when you do a SWOT Analysis.
Keep in mind though that answering questions and doing self-analysis doesn’t automatically equate to success. It will, however, make you more thoughtful about your objectives, motivations, and passions. Put the knowledge gained toward matching you with the best business opportunity for you.
Analyze Your Industry
Your personal evaluation got you thinking about business ideas and also gave you a reality check. Now you’re finding which industry is of interest. Learn more about your industry to help safeguard your company and enjoy its benefits fully.
Industry analysis involves asking:
- Who is the audience for what you’re selling?
- Who are the competitors?
- How much money is needed for the startup?
Ways to research your industry include:
- Google searches
- Speaking with people already employed in the industry
- Reading related news sites and magazines
- Signing up for classes
- Short on time? Seek out government divisions and your local SBDC
- Advertising reps for competition statistics and information
- Industry suppliers
- Hire students to do inquiries for you
Evaluating Your Market
Although you consider your prospective market to be attractive, find out if it really is lucrative by asking the right questions. Is your product or service urgently needed? How big is the market? Knowing if customer acquisition would be simple and inexpensive, or if you need a bigger investment, would be useful.
Analyze who are your possible competitors and keep in mind that competitors are often a positive sign. It shows that people are willing to pay for what you’re offering and you’re not totally operating in the dark either. Gather knowledge from your competition, from which products and services they provide clients to how they entice their audience, and any customer grievances. Take away what may be missing and how you can make up for that gap. Endeavor to do all of this before you put down roots in a certain business location.
Make it Legal
The first step toward this being official is registering your business as a business. But take time to understand the benefits and drawbacks of the various business entities. It is advisable to work with a lawyer to smoothly make your business legal, without headaches about potentially doing it wrong.
- Obtain the right business licenses and permits
- Follow city, state, and country guidelines, permits, and licenses, if applicable
- Determine which insurance is necessary for your business
- Find a reliable accountant
Start the Planning Process
To achieve success involves planning and believing in your business vision wholeheartedly. More reasons to form a business plan are:
- It is a must-have if you seek outside financing
- It helps you determine how much money you will need to start operating
- A business plan alerts you to what needs to get done when
- It shows where you are going
- It reveals any holes in your thinking
Essentially, a business plan is a roadmap; it is useful for helping you track your progressions and steps to take to reach your goals. The plan is also necessary when you make pitches to investors and banks, or to appeal to possible co-owners and board members. It defines your strategy, policies, and how you plan to execute activities, with important days, deadlines, budgets, and cash flow all set out within the plan.
If you do not plan on showing your business plan to anyone then it does not have to be a formal paper. Instead, it can follow a lean planning process that consists of a pitch, estimates of the main business figures, major milestones you want to reach, and regular progress check-ins to review and alter the plan.
Parts of a Standard Business Plan
A typical business plan has nine sections:
- Managerial Summary
- Business Overview
- Products & Services
- Target Market
- Marketing & Sales Strategy
- Management Team
- Financial Plan
- Markers and Metrics
Types of Business Plans
The two kinds of business plans are the startup plan and the strategic plan.
If the reason for your business plan is to start a conversation with possible partners and allies, you might choose to opt for a startup plan, which is also called a feasibility plan. It is the operations or yearly plan and is only for use within your business; it won’t be seen by outside investors or financial institutions. It mainly reflects members’ needs within the company.
Uses for the start-up plan are to plan business growth or how it will expand, and to set your company’s priorities.
A strategic plan, on the other hand, includes a high-level strategy. It states strategic movements, certain responsibilities, specific actions, milestones, budgets, and a monetary plan.
The best option depends on your company’s size. It may be in your best interest to get financing from an angel investor of a venture capital firm. The majority of small businesses start with private financing; common sources are:
- Credit cards
- Personal loans
- Family assistance
Aside from your start-up costs, it is usually a good idea to have at least three months’ worth of savings in the bank. For financing your company, you must match the organization’s needs with the relevant financing option. The primary investment and borrowing choices that can help you to finance a new business are:
- A form of private equity called venture capital
- Angel or informal investors
- Banks (commercial option)
- AR (accounts receivable) financing
- Small Business Administration (SBA)
- Family members and friends
Keep in mind that a stunning business plan will not automatically obtain funding. It is actually not the main factor for raising money, as per entrepreneur Guy Kawasaki. Increasing your opportunity to get the desired funds to start your business involves spending significant time on your pitch.
Set Up Shop
Now that the business plan is formed and the bank account has been attended to, you’re set to start operations. Now you must:
- Look for a location
- Location affects which kind of client you draw in, promo campaigns you can run, and the length of time taken to develop your business
- A good location won’t equate to automatic success but is a positive step
- A bad place can spell the death of your company
- Negotiate for a Lease
- Buy inventory
- Install phone lines
- Print off stationary
- Hire employees
- Determine pricing
- Have a launch party
Set the upcoming stage for your business with your marketing. These efforts can generate excitement for your business, if done correctly, sets expectations, and draws customers. How will people know what you offer or where you are located if you aren’t marketing?
If you plan to have a physical store, its layout, scheme, and product placement set the tone for the whole store, as well as influencing what people notice and purchase when they enter the premises. Your considerations for store layout include:
- Decide where you want to be lit well
- Determine how to display any products
- Products on low shelves are hard to see
- Thus, put products at eye-level so seen first and more likely to be bought
- Choose colors
- Different shades alter people's emotions
- How will people move throughout the store
Your Choice of Products and How You Decide to Price Them
Your company’s reputation is formed at least partially from what products you sell and how you price them. Instead of carrying everything in a particular price range from a catalog, instead be selective about only picking the things that will craft the atmosphere you want to generate when people think about your business.
For your pricing, remember that:
- A low-priced option will cheapen your brand
- You might not want to carry it
- An expensive product or service limits your clientele significantly
- Perhaps cut back on some of these, for broader appeal
- If a more expensive option will severely limit your client base, maybe limit some of these offerings
Things to Consider in Thinking Where You Want to Set Up a Shop
- Fee: Are you able to afford the desired location? If the answer is no, keep looking
- Visibility: Can people find you easily? Are they able to see your sales? Are you on the outskirts of town and will this affect your company?
- Competitor Locations: Are they close by? If so, you may have chosen a prime location for attracting potential customers. However, it may also mean you won’t sell anything. Think about how best to proceed
- Rules and regulations (local, city, state, and country): Determine what you need to follow before choosing your final location as they may restrict you
Trial and Error
Every entrepreneur makes mistakes, and it is great if you learn from them. Not making a mistake means you are not making the most of the opportunities or learning how to make more with less. Be open to new ideas, innovative, adaptable, and enjoy yourself!
How to Start a Small Business in a Few Hours
Doing so involves putting aside the stress of whether you’ve found the perfect company name, brand, and unique way to sell your product or service. Put aside the business identity literature and brainstorming for the ideal URL or website design.
Do this instead:
- Obtain your Employer Identification Number (EIN)
- It is the federal tax number that identifies your business
- You only need one if you plan to have employees or are looking at partnerships, LLCs, or corporations
- Submit your trade name, if the business won’t be under your name
- Only if your local area requires it
- Obtain your business license, as required by your city or country
- This form is fast to complete
- Involves using your EIN to identify your business, rather than your Social Security number (to help safeguard your privacy)
- Fill out a business personal-property tax form, if needed
- Businesses, like individuals, pay tax on "personal" property
- If you plan to work from home, you needn’t list the computers, tools, and other items you already own that you’re using for the business on this tax form
- Ask your locality if any other permits, such as a home occupation permit, are required
- Regulations vary between areas
- Get a business bank account
- Divide personal and business monies and activities to prevent IRS issues
- Open an account using your business name and EIN
- Use it for any business-related transitions
- Create a simple accounting spreadsheet
- Spend your time generating revenue rather than taking hours understanding complex accounting software right now.
- Use it to track your expenses and funds received
- Have two columns: Revenue and Expenses
- Add columns over time
Start Your Own Business for $100 or Less
You needn’t break the bank when you launch a small business. If no one hires you then maybe you will simply hire yourself. It all starts with getting the word out.
Get the Word Out
Start by putting it into writing. Draft up a brief plan that states your goals. Include a one-sentence description of your business. This sentence is based on your answers to:
- Who is your ideal customer?
- What is the amount of money needed to start?
- What is the price for your product or service?
- How much money will it take to deliver it?
- What is the least amount of income you can expect?
Spend time researching your competition. If you don’t reinvent the wheel, don’t stress out. Also, don’t let your competitors intimidate you; stand behind your quality offering. Take time to create marketing materials too as a marketing plan is essential to getting the word out about your business to the right people. There are many free and cheap marketing options.
You will need to set up a website too. When someone wants to buy something, the first step taken to search for it is usually to go onto the Internet. This is true for any industry, whether it be for a computer or a pie.
Network using different forms of media and platforms. Business cards and flyers are traditional media for those seeking quality printing at budget-friendly prices. Phones may also be an ideal system, but remember to keep your children from answering calls from clients. 800 numbers with voicemail are available for only about $10/month. Facebook and LinkedIn are examples of free networks that can tell people more about your business. You could also form business partnerships with benefits for all involved. Partnering with a popular local business may help you reach more people quickly. Email local papers and respond to journalist queries in order to get free media coverage.
Find volunteers who can lend a hand. If money is tight at the start of your business venture, then it makes sense to be resourceful. Get started by offering your product or service to your target audience. Quality free expert sources to contact include:
- Local Chamber of Commerce
- Get advice on any part of your business, from licenses needed to tax and insurance factors
- Small Business Association
Things That Stop Us from FINALLY Starting Our Own Business
- Excuse 1 – I don’t have the money to start a business
- Excuse 2 – Operating a business seems like a ton of work; all I want to do is sit on a beach with my computer
- Excuse 3 – My boss (or spouse, friend, or another person) is against my launching a business
- It is YOUR decision what is right for you or not. It’s within your hands.
- Excuse 4 – I can’t seem to find an idea
- Ask yourself: (1) What do your friends complain about that you do easily? (2) What do others say you are good at? (3) How do your friends introduce you? (4) If you had a few hours free in a week, what would you do?
- Excuse 5: I’m very overwhelmed with the business options
- Excuse 6: I’m not sure my idea is any good
- Then plot a demand matrix to figure out if you have a decent idea
- Excuse 7: There are so many materials – how do I know where to start?
- Business cards, websites, and bank accounts aren’t the most vital things
- Excuse 8: I don’t live in the right location or have the appropriate skills
- There will always be a reason to opt out. Rather than focusing on why other people became a success, look at what you can do now to get closer to your objective.
- Excuse 9: What happens if I fail?
- Everyone fails but the sooner you accept this fact, the quicker you get past these excuses and start your own business.
Are you wondering what legal requirements are necessary to start your own business? They vary between cities and states, so it’s wise to consult with a legal professional. Easily connect with attorneys from leading schools, such as Harvard Law, once you post your legal need in the UpCounsel marketplace. The lawyers in the marketplace work for professional firms, such as Google, and have 14 years of legal experience, on average.