How to Start a Business: Everything You Need to Know

Small businesses are the backbone of the economy, and entrepreneurs come from a variety of industries. More than half a million small businesses are founded each month in the United States, which shows that it’s never too late or too noble to take a business idea and start a new venture. However, it is very important to understand everything you need to know as a startup, from creating a business plan or creating a business name to identifying the type of business structure. business of your specific business.

So, Nav wants to make sure business owners nationwide have the resources and understand what it takes to start a business.

10 steps to starting a business

Regardless of the type of business entity you own, small business owners mostly follow the same basic steps to start their own business and get started. Here is the step by step guide on how to take your business idea and start any kind of business.

  1. Choose your business name

To have a business, it must be identified by its own unique name. This name will be used when looking for a business bank account, as a domain name for your site, to obtain an employer identification number, etc. As a sole proprietor, you can also operate under your own name. You don’t have to be completely married to the name, as many companies rebrand after a few years. (Example: Facebook has now become “Meta”.) However, it can still be proactive to secure a name by trademarking and owning the intellectual property.

In addition to choosing your business name, you will also need to register it. The United States Patent and Trademark Office can help you do an initial search to see if other business entities share the same name. But finding a lawyer to help you through the process is also a long-term benefit and can help you avoid offenses.

  1. Create a business plan

A business plan is broken down into several aspects. This will include the purpose of your business, who the business serves (target market), and projected goals for the months and years ahead. Your business model should be represented by this plan, regardless of the type of business you have.

Your business plan should have:

  • An executive summary. This is an overview of your entire business plan.
  • A business description. This sums up the purpose of your business, its uniqueness, and what your business does.
  • Market studies, strategies and market analysis. This would include your company’s specific market size, detailed information about your target market and potential customers, in addition to customer buying habits.
  • Competition analysis. Requires analyzing and evaluating direct competitors in your market while revealing their strengths and weaknesses.
  • A development plan for your products and services. A business plan describes the company’s goals and how it will achieve them. This will also include start-up costs, targeted milestones, and an expected timeline to achieve certain goals.
  • An exploitation and management plan. This details how your business operates. This may include whether your business will have a physical location or will be an online business, what equipment and materials are needed, team or staff, and anything else that focuses attention on the procedural practices of starting and operating the business. ‘business.
  • Business finance model, financial information and planning. Nav understands the importance of financing for small businesses and provides much-needed resources to help secure financing, from business credit to small business loans. Identifying your business’s early financial needs, goals, and usage can help you grow at a steady pace while protecting your personal assets.
  1. Determine which business structure your business belongs to

Forms of ownership include:

  • Individual company
  • Limited Liability Company (LLC)
  • Company C
  • S corporation
  • Non-profit

The legal structure of your business will determine the federal tax you will have to pay annually or quarterly and whether your business will require a board of directors, meeting notes, etc.

  1. Obtain your tax identification number

A tax identification number is also called an EIN or employer identification number. This is an additional way to identify your business and is similar to a social security number. Your tax identification number will help you apply for business credit, get a credit card, apply for a business license, and identify your business if you are applying for a small business loan or grant.

  1. Open a business bank account

There are many banking options available for small businesses and it’s important to keep your business finances separate from your personal finances to help you through tax season and to protect your personal assets. Once you have obtained an EIN or tax identification number, you can apply for a business bank account under that entity’s name.

  1. Create a marketing plan

A marketing plan is essential for any business that wants to grow and enjoy consistent success. A marketing plan outlines the goals your business wants to achieve, as well as how your business will be marketed to achieve those goals. This plan should include:

  • Who are your direct competitors?
  • What are the company’s goals?
  • Achievable steps.
  • How do you plan to measure and track results?
  1. Apply for funding

Starting a business is not cheap and will require additional sources of funding to pay for much-needed materials and services for your business.

  1. Get an Accountant or Accountant

Depending on your type of business and where your business is located, you may have to pay quarterly taxes. A bookkeeper or accountant can help you keep track of your finances as you grow your business. They can also help you get the maximum deductions as a newly created entity.

  1. Expand your business payment processing

To get paid for your services or products, you need to identify how your customers/users will pay you. These options include:

  • PayPal
  • ShopPay
  • Debit/credit card payments
  • Species
  • Money orders, checks, etc.

This may seem pretty self-explanatory, however, depending on the systems you use, it may also be a matter of how much you will have to pay to use this service. For example, online business owners pay a percentage to PayPal or ShopPay each time their customers use these services. Plus, how your customers pay can help you automate receipts and proof of income for your accountant, which comes in handy during tax season.

  1. Start your business

Launching your business is the last step in getting started. This means that your website is live, your social media accounts are created, your products or services are tailored to the demand of your customers/users, and you have completed your business registration with the government.

Things to consider before starting a business

When doing business, there are many aspects to making your business successful. And while there are some obvious things to consider before starting a business, there are also additional factors to ensure your business is doing well.

start-up costs

Being impatient to start a business can be very expensive. Considering your start-up costs, which may include inventory, office space, marketing, fulfillment, contractors or staff, or any tax-related expenses, this will keep you in good standing with the IRS as an accountant or accounting software.

Business insurance

The creation of a business creates liabilities in the name of the business. Having commercial insurance can be expensive upfront, but can save you a lot of money in the long run. Types of insurance can include workers compensation, liability insurance like product liability and general liability, risk insurance, etc.

Request

It’s great to come up with ideas that we personally think are great, but building a successful business structure starts with identifying if there’s a need for what you’re offering. Demand dictates the true value of your product or service and will therefore determine your success if your market wants what you have to sell.

How to start a business FAQ

Here are some frequently asked questions about how to start a business:

Will my business need permits or licenses?

Whether your business will need a permit or license will depend on the state, city, and county your business intends to operate. Your state may not have requirements, but the city or country your business will be operating from may have specific rules. This also includes companies that fall under the “non-profit” category, so it’s good to check beforehand.

How do I market my product or service?

There are many ways to market your company’s products and services, whether you have an e-commerce or brick-and-mortar business. Building an online presence is a great way to grow your customer base and attract new customers. Social media has helped many new businesses gain exposure with and without advertising. Additionally, your business can use:

  • Advertising by e-mail
  • Ads
  • Word of mouth
  • Using Search Engine Optimization (SEO)

Why do I need a business plan?

A business plan identifies that your business actually meets a need and/or solves a problem. It also helps project the future and growth of your business. And with a business plan, you can get funding such as venture capital or grants. The business plan can also give you an accurate overview of your direct competitors and the gaps in the market that you can fill and they are not.

How do I finance my business?

There are many financing options for your business, including:

  • Crowdfunding
  • Business credit cards
  • Small business loans
  • Subsidies

Nav is the best place to start — we can provide you with customized financing options based on your business data. The Small Business Administration (SBA) also offers businesses an assortment of options for obtaining financing in addition to local resources specific to where your business is located.

Starting a business can be an exciting journey and Nav is here to help you with a full marketplace of resources that will help you build a successful business.

This article was originally written on May 9, 2022.

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