Are you feeling burnt out in your present corporate job or probably seeing some other signs? If the answer is yes, then maybe it’s time to make that ‘big change’ in your life. Entrepreneurship is a very challenging yet fruitful domain, and a perfect choice for those who are willing to take the risk. You can gain substantial rewards from starting your own business coz it’s a destination in its own right and a constant learning curve. So here’s a guide on how to start a business on your own.
Anyone can become an entrepreneur even without a college degree or business experience. Many people take it up as a side hustle alongside their full-time job. However, the only thing that you may require is a strong business plan and the will power to see it through. Setting up a business from scratch may apparently seem an easy task but that’s not actually true. The steps involved may seem overwhelming and scary at first, but that shouldn’t stop you from doing what’s needed.
How to start a business?
If you’ve taken the decision to enter into the entrepreneurial arena, then you need to answer some important questions and complete all the steps that are involved. Here’s a comprehensive guide that we’ve created to help you get started.
Brainstorm, research and finalize on the perfect business idea
The first step in this ‘How to start a business’ guide is to brainstorm, conduct research, and finalize a business idea/solution that’s out-of-the-box and completely new to the target market. Ask yourself some important questions to gain more clarity and arrive at the perfect one:
- What problems are businesses or consumers still facing?
- What business or consumer need is still unfulfilled?
- Do you have the necessary skills to execute the business idea successfully?
- What skills will you need to build up or learn to help you with your idea’s execution?
- Do you have the necessary resources to start a business?
- Can you penetrate into the industry with existing players by doing something different or even better than what they’re doing?
- Is your business idea strong enough to sustain their market competition for long?
Test your business idea’s feasibility through extensive market research
Once your idea is finalized, do some extensive market research to test your idea’s feasibility. Interact with your target customers, find out who they are (potential buyer’s persona) and their demographics, and figure out what their problem areas are. You can collect first-hand information from them by conducting online surveys, online content campaigns or pilot focus groups.
To complement your primary research findings, conduct some in-depth secondary research related to your field. Skim through public data, economic data, current market statistics and industry trends. These may significantly impact your business idea in some way, so you better do your homework well! Click here to learn more about how to market research for a new business.
How to start a business: Create a detailed business plan
Use all the findings from your in-depth market research in drafting your detailed business plan. This is one of the most important steps in setting up a company. You go wrong here and you’ll literally land into some difficulty or the other while trying to manage your business later on.
A business plan needs to be strong, wholesome and fool-proof. It should also be able to answer all the possible questions that a potential investor or business partner would need to know (ideally a max of 30-50 pages in total). So, take a considerable amount of time to draft one. Have a look at some of the important elements that a strong business plan needs to cover. This step helps you further refine your initial idea into something more clear and which promises future success in the long run.
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Choose the legal structure for your business
Get all of the legal aspects out of your way early because we know it’s overwhelming and not so much fun! Decide on a legal structure that’s suitable for your business as it will impact a ton of other aspects too and have long-term implications on how you do business. For example, the roles of your team members, the process of filing state and business taxes, handling other legal liabilities, etc. If you’re confused, take the help of an experienced business attorney to arrive at the right choice. You can choose any of the following legal structures for your business:
● Limited Liability Company (LLC) -> Most Popular Choice
● Sole Proprietorship
Register your unique business name and fulfill all the associated tax formalities
The next step in this ‘How to Start a Business?’ guide is to register your unique business name with your state’s agency. Make sure it hasn’t already been registered by somebody else. You’ll also have to get your Tax Identification Number (TIN) or Employer Identification Number (EIN) from the income tax website for filing and managing your taxes efficiently.
Complete the legal requirements by applying for patents, trademarks and licenses
Close the legal formalities for your business by looking into the required trademarks and licenses. Obtain permits for your business before they can start running. Licenses can either be general or specific depending upon the type of business you’re in, so do check with your local authorities first.
File a patent, copyright or trademark as well if your business revolves around a new invention and you want to protect your intellectual property.
Arrange finances or obtain funding for your business
It’s time to familiarize yourself with the financial angle now! Some businesses are self-financed or bootstrapped. However, that’s not always the case. Some business owners also opt for external funding through investors and crowdfunding platforms, and loans are always the last resort. Here are a few financing options that you can consider:
- Venture capitalists
- Angel investors
- Business lines of credit
- Equipment financing
- Friends and family
- Term loans
Hire the right pool of people and assemble your team
Depending upon the kind of business you’re in, you can opt to hire full-time employees, freelancers, contractors, independent consultants or a combination. However, do make the right choice when hiring since bad hires can indirectly pull your business down and create unavoidable losses.
In this respect, take a substantial amount of time to create detailed job descriptions for each role and then interview all the qualified candidates. A person who has a proven history of taking initiatives to get results is more likely to be the ‘right fit’.
Don’t have the budget for a full HR team? You can hire a single HR consultant in-house or work with a professional staffing agency to fulfill all the required Hr responsibilities end-to-end.
Open a separate bank account for your business
Creating a separate business bank account is one of the most important steps for securing the future of your business’ financial growth. It’s the one place from where you’ll be receiving customer payments and paying your business expenses and bills. Keep your business account and personal accounts separate to avoid any kind of potential legal issues in the future.
Choose a business current account over a business savings account to keep your accounting and bookkeeping process simple. But do it as soon as you can to avoid hiccups.
Manage your finances through accounting softwares/docs or a professional CA
After you’ve opened up your business bank account, set up your basic accounting documents:
- Cash flow statement
- Income statement
- Balance sheet
It’s absolutely essential to update these documents regularly for proper business tax filings. Managing finances is not everyone’s cup of tea! You can either use a good accounting software that automatically does it for you or hire a professional CA to do it on your behalf. However, check-in with him from time to time and remain personally involved in your business finances to avoid any kind of fraud or theft. Lastly, fulfilling tax requirements should always remain your top priority over anything else.
Start running, marketing and promoting your business
With this last step, we’ve covered everything you need to know on how to start your own business. You need to build your brand before you start selling your product/service, hence it’s essential to promote or market them well. The idea is that you already have a few people who are ready to jump when you launch your business officially for sales.
Deciding which marketing channels and methods to use should be a top priority. You can also learn new tactics along the way, track your metrics, and readjust your marketing strategies accordingly.
How to start a small business from home?
Starting a small business from home is probably the most convenient option. Home-based businesses help you bypass many traditional logistic costs including that of retail space, initial inventory and warehousing.
However, deliberate over some important questions like: (1) Will the job have heavy in-person demands? (2) Will the job require a lot of physical equipment and tools to successfully build and market it? (3) How big will your team be? and (4) Many more operational questions that may come to mind.
It may seem a herculean task at first, but it will all depend upon the kind of small business idea that you’ve chosen. The trick to successfully getting your business to rocket off is to meticulously plan and execute it. Post that, staying on top of the performance of each of its moving parts as you go will keep you ahead of the game!
How to start an online business?
If you’re a new entrepreneur who’s not willing to spend much but eager to gain that learning experience, starting an online business will be your best bet! It’s nothing short of a cakewalk plus it’s inexpensive as well.
You can work anytime from anywhere (home or a cozy cafe) and make a decent living from the internet. You just need a separate business computer, a business website, some or no equipment (basis on the business you choose), and a high-speed internet to get things rolling.
Here’s an overview of the steps that are involved:
Choose an appropriate business structure
Decide whether you want to operate as a corporation, limited liability company (LLC) or sole proprietorship. If you’re going for the first two then you’ll have adequate protection from liability for your business’ obligations and debts, and will not have to pay it out of your personal pockets. A corporation is an ideal choice if you’re bringing in money from investors while an LLC is much more flexible.
Choose a good business name
The next step is to brainstorm various business names and choose a unique one for your online business. While doing so, conduct a basic google search to see if there are any similar named businesses, lest you’ll be sued for trademark or copyright infringement. If you’re still not sure, then quickly head to MCA’s official website. (For Indian Readers) A unique name will increase your chances of getting a domain name and website that exactly matches your business name.
Decide your primary business location and file your business formation papers
Once you’ve decided on the appropriate business structure and a business name, file the formation documents in the state where you’ll be primarily located. You’ll need to pay a filing fee based on the state that you live in and then you’ll get an official certificate confirming that your new business entity exists.
Set up your business bank account and associated finances
The next step is to set up your finances and obtain a TAN ID (Tax Deduction Account Number) from the income tax govt. website. (For Indian ReadeHowever, if you’re a single-member LLC or a sole proprietor or then you can use your PAN number instead. Additionally, you also need to open a separate business bank account or a Paypal account for your online business transactions. According to the 2022 Chargeback Field Report, approximately two-thirds of merchants saw a rise in chargeback fraud, an increase of 28%. Make sure you have a decent refund policy before taking payments with your business account.
Clearly understand licensing and sales tax requirements
You’re bound to collect and pay sales tax for transactions in the state where your online business is primarily located. It’ll be a good idea if you contact your state’s taxation department to gain more clarity and find out your responsibilities. Also, check if you need a business license or not. The rules and formalities differ from state-to-state.
Finally register your website or domain name and set it up
Once your business name is finalized, you can always buy a domain or website name (ends in “.com”) and web hosting too. Make sure you do it as soon as you can, lest it gets snapped up. Check its availability by simply typing the name in the browser’s address bar and see if the same name already exists. Some companies can also do this process on your behalf in return for an annual fee.
Next is to get your website up and running with a friendly UX and UI design. Do it yourself if you know it all or hire a professional instead. Finally, promote or market your online business on various social media channels for your target audience to get to know you better and organically visit your website.
Want to have an in-depth understanding of how to start your business online? Click here.
Use an online survey software:
Once your business is up and running, it’s bets advised to adopt an online survey software like SurveySparrow. Online surveys are the need of the hour. It helps you understand customer preferences, roll out customer satisfaction, customer feedback surveys, and check your customer pulse. If your business is blooming and want to improve your employee engagement, you can use SurveySparrow’s employee 360 degree feedback software to roll out employee satisfaction surveys, conduct performance reviews and appraisals,
Looking for some low-investment business ideas to get started?
If you’re a bootstrapper or a complete beginner in this field, we’ve made your job a little easier by curating a list of the best business ideas to inspire you. The most exciting part is that you can start them right from your home with a small investment from your side.
And if you have a really tight budget and can’t afford to spend much, we’ve got you covered there too, mate! Check out the most trending online business ideas that you can experiment with right away.
Please note that the list is non-exhaustive and there’s no dearth of the options that you can go in for. However, we’ve tried our best.
The bottom line is that starting a business from scratch and then running it sustainably is no easy task! There are tons of things that you would need to figure out beforehand. Once you’re ready with a solid business plan and all the necessary steps involved, you’re already on your way to running it successfully. We hope this how to start a business guide helps you create a business plan.
However, take the plunge only if you’re ready for a 24×7 roller coaster adventure that has its equal share of ups and downs. You’ll come out victorious only if you’re in it with a 100% commitment.
Hope this blog has given you a comprehensive lowdown on how to start your own business and what all that needs to be done. We wish you good luck! Have any more new business ideas to share? Meet us in the comments section below as we would love to hear from you.