Starting a business is one of the most exciting and rewarding adventures you may choose to take. But where do you begin?
There is no single way to start a business; multiple aspects require your attention. This step-by-step guide is designed to make your startup less mysterious and daunting while increasing your likelihood of building a successful venture. We want to walk you through everything from validating your business concept to registering, launching, and scaling it.
Before You Start: Get in the Right Mindset
Overnight success stories sell newspapers, if only because they distract us from all the years spent dreaming, building, and preparing for a public launch before your company goes BIG. Mind your business; if you can access a web browser, stop scrolling through Twitter or Instagram and focus on your business journey to get things right.
Consistency is the King!
Entrepreneurs often start with high motivation initially and give up when that same motivation dries up. This is why you need to build the habits and where you set up the routines that will drive you forward when the motivation runs dry.
Take the Next Step
Some business owners start without looking, making things up as they go along. Then, there are the business owners who stay stuck in analysis paralysis and wait to start. You may be a bit of both, but that's where you must be. The best way to accomplish any business or personal goal is to write out every possible step. Now, list those steps in order of what has to happen first. Some take minutes, and some take an enormously long time, but the important thing is always to do the next step.
Most business advice tells you to monetize what you love, but it often needs to include the two essential elements: it needs to be profitable and something you love to do and do it best. For instance, you may love music, but how viable is your business idea if you could be a better singer or songwriter? You may be a connoisseur of fragrances and want to open an ecommerce store. Then, you need to understand the market, your target audience, and the pricing strategy—it won't be easy for you as you would have to create a memorable brand experience with your logo, packaging, visuals, and, of course, your storytelling.
If you need to know what to start with, the following questions will help you understand your business.
These questions guide you to an idea for your business. If you already have an idea, it may help you expand it. Once you have your idea, measure it against whether you're good at it and if it's profitable.
What kind of business should you start?
These are the few things to consider before you decide what business to start :
Still trying to decide what business to start? Consider one of these popular business ideas:
Most entrepreneurs spend more time on their products than getting to know the competition. If you ever apply for series funding, the potential lender or partner will definitely want to know about your business idea and the USP of your products/services. If market analysis indicates your product or service is saturated, see what changes you add or alter to make it more user-driven. For instance, instead of housekeeping services, if you specialize in homes with pets or focus on garage cleanups, then that might add value to your services.
The first step of any competition study is Primary research, which means getting data directly from potential customers instead of basing your conclusions on previous data. You can use questionnaires, surveys, focus groups, and interviews to determine what consumers want.
Only survey friends and family if they are your potential target. People who say they'll buy something differ from those who actually do. The last thing you'd want is to take their word, bring the product to fruition, and then flop as you try to sell it because everyone said they would buy it, but don't because this isn't something they would buy after all.
Collect data for your secondary research from existing information sources such as census data. You could study, collate, and analyze available current data in several ways suitable for your requirements, but it may not be as specific as primary research.
SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis allows you to examine facts related to how a product or idea might function if taken to market; it can also help determine where the idea should be headed. Your business idea could have weaknesses you still need to consider, or there might be opportunities to improve a competitor's product.
A business plan is a dynamic document that forms a blueprint for a new business. The document makes it easy for potential investors, financial institutions, and company management to understand and digest. A business plan can help you flesh out your idea and spot potential problems even if you would self-finance your venture. The following are the sections to include when writing a well-rounded business plan:
Executive summary: The executive summary is the first item in a business plan but should be prepared last. It refers to the proposed new business and highlights the company's goals and how they will be achieved.
Company description: This generally relates to what problem your product or service will solve and why your business idea is the best. For example, your background is in molecular engineering, and you have put it into practice by developing a new type of athletic wear and having the proper credentials to make the best material.
Market analysis: This business plan section analyzes how well a company is positioned against its competitors. The target market, segmentation analysis, size, growth rate, trends, and competitive environment assessment should be mentioned.
Organization and Structure: Describe the type of business organization you would expect, what risk management strategies you propose, who would staff your management team and their qualifications. Will your business be a single-member LLC or corporation?
Mission and Objectives: It should include a short statement of the business's mission, what it hopes to accomplish, and how it will be completed. SMART objectives are precisely measurable, action-oriented, realistic, and time-bound.
Products or services: This describes how your business will operate. Included are what products you'll offer consumers at the outset of the business, how they compare to existing competitors, how much your products cost, who is responsible for creating them, how this entails sourcing materials, and how expensive it is.
Background summary: This is the most demanding and time-consuming part of the business plan to write. Gather and summarize data, news articles, and research studies on trends that positively and negatively affect your business or industry.
Marketing Plan: The marketing plan outlines the nature of your product or service, consolidates your SWOT analysis, and analyzes competitors. It further discusses how to market your business, the probable marketing expenditure, and the possible campaign duration.
Financial plan: The financial plan is the heart of any business plan because, with money, the business will get off the ground. Include a proposed budget in your financial plan plus projected financial statements, including an income statement, a balance sheet, and a statement of cash flows. Typically, five years of projected financial statements is sufficient. This is also where you request funding if you seek external funding.
An exit strategy is crucial for any business seeking to raise capital. It explains how to sell or transfer the business if one intends to retire or shift to other ventures. It also helps one get the highest value out of their business when it is time to sell. There are a few ways to exit a business; the best depends on your goals and circumstances.
Common exit strategies include:
The scalable business model ensures that with the growth of your small business, you can always accommodate other customers without increasing the costs. A business model is scalable if people can be replicated to be provided to serve more customers without incurring many increases in expenses.
Examples of popular scalable business models are:
Learn How to Start Your Business in 2025!
Before registering, you must determine what kind of entity you want for your business. Your legal business structure will factor into everything from how you file your taxes to your liability if things go wrong.
Sole proprietorship: You can do it as a sole proprietorship if you own the business and intend to bear all debt and liabilities personally. The downside of this route is that it can directly impact your credit.
Partnership: As its name describes, a business partnership is where two or more are personally and individually liable as business owners. If you can find a business partner with complementary skills to your own, then you don't have to do it alone: it usually makes sense to add someone to the mix to help your business flourish.
Corporation: If you desire to separate your liability from your company's liability, you should consider the benefits and drawbacks of corporations. Although unique laws govern each type of corporation, the legal status generally renders a business independent from its owners. As a result, corporations may acquire property and be liable for it, pay taxes and make contracts, sue, and be sued as if the corporation were an individual.
Limited liability company: One of the most popular forms of small business organization is the LLC. This hybrid entity provides liability protection for a corporation while offering tax benefits for a partnership.
Ultimately, it’s up to you to determine which entity is best for your current and future needs. Individuals need to learn the legal structures available. If you cannot decide which entity is best for you, you can discuss it with your legal advisor or consultant.
If you have done extensive research and feel your idea has longevity in the marketplace, it is time to make your business official.
To do so, you should,
Register your business with your state: This will grant you legal recourse to move forward under your brand's name.
Pick up the correct Licenses and Permits: Obtain the proper licenses and permits that apply to your business, such as food, liquor, health, or business licenses.
Obtain a tax ID number: This is issued through the IRS and will help them track any transactions done on your account. You will need this to open an account at the bank.
This process will ultimately help a brand name establish a trademark that cannot be used by anyone else. After formalization, one can open an office and establish an online business presence.
Any venture comes at a cost; therefore, you must determine how to meet those costs. Are you going to finance your venture or raise the money? If you are quitting your job to join your business, have you saved enough money to sustain yourself until you break even? Find out how much your startup costs will be.
Most startups fail because they have used all their money before achieving a profit. Estimating too much start-up capital is never a good idea, and it may take quite some time before the business begins to generate sustainable revenue.
Do a break-even analysis.
One promising approach for determining how much money you require is a break-even analysis. This is an essential part of financial planning and could help business owners identify when their company, product, or service will become profitable.
The formula is simple:
Fixed Costs ÷ (Average Price Per Unit – Variable Costs) = Break-Even Point
Every businessman should familiarize himself with this formula. It spells out your business's minimum performance to avoid losing money. It also pinpoints the exact sources of profits so you can set production targets accordingly.
Here are the three most common reasons to perform a break-even analysis:
Ask yourself: How much revenue do I need to generate to cover all my expenses?
Ask yourself: What are the fixed costs? What are the variable costs? And what is the total cost? What is the cost of any physical goods? What is the cost of labor?
Ask yourself: What am I doing to reduce the average fixed costs? What can I do to reduce my average variable cost per unit? What can I do to improve sales?
There are many ways to fund your business for starting a business—most of them require lots or almost no effort. There are two kinds of funding: internal and external.
Internal funding includes the following:
When the business is funded with personal savings or credit cards, you will have to pay off the credit cards, and you lose a portion of your wealth when the business fails. By allowing your family members or friends to fund your business, you risk the chances of hard feelings and strained relationships if the company goes under. External funding is recommended for business owners who wish to mitigate such risks.
These comprise:
Small businesses may need to consider a combination of several sources of capital. Consider how much money you want, how long it will be until the business can repay it, and how risk-tolerant you are. Regardless of the source, you must always be prepared for profit.
Some funding ideas include:
Invoice factoring: You sell those unpaid invoices to a third party at a discount.
Business lines of credit: It works similarly to how a personal line of credit functions. The business line of credit will be calibrated based on your business's revenue, credit score, and financial history.
Equipment finance: If you buy expensive equipment for your business, you can take out a loan or lease.
SBA Micro Loans: The quantum of the microloan can be as small as INR 5,000, while the maximum amount shall not exceed 50% of the annual income of the household of INR 3 lakh. Such loans are advanced to households (a family of husband, wife, and children) whose aggregate annual income does not exceed INR 3 lakh. Popularly, authorized financial institutions advance such loans to self-help groups (SHGs) or joint liability groups (JLGs) under the group lending guidelines of the bank.
Grants: The government has provided grants for businesses that boost innovation and export growth, even those located in historically disadvantaged areas. You can also obtain grants through local and regional organizations.
Crowdfunding: You can raise funds by crowdsourcing, asking people from a large crowd to donate, or selling your company's equity.
Choose the proper funding for your business, considering how much you need, the repayment time frame, and your risk tolerance level.
You would need insurance for your business, whether it's home-based or if you don't have workers. The kind of insurance you would need depends upon your business model and the risks you would face. You'll need more than one policy and other coverage as your business grows. In most states, a law requires workers' compensation insurance if you have workers.
Work with an Agent to Get Insurance
An insurance agent can determine what types of coverage are appropriate for your business and locate policies from insurers that offer the best rates. An independent insurance agent represents several different insurers so they can shop around for the best rates and coverage options.
Basic Types of Business Insurance Coverage
Many entrepreneurs spend too much money getting their products to the market, leaving them without a marketing budget by the time they're launched. Conversely, they've spent so much time developing the product that marketing is an afterthought. Marketing should be a well-thought-out concept before launching your product.
Even if you're a brick-and-mortar business, a web presence is essential. Creating a website takes little time, but you can have one done in as little as a weekend. You may build a standard informational site or a business-to-consumer e-commerce site through which you sell products online. If you sell products or services in a brick-and-mortar setting, you will have a page listing locations and hours on your site. Other pages you can add to your site include an "About Us" page, product or service pages, FAQs, a blog, and contact information.
Now that you have a website or e-commerce store, optimize it for search engines (SEO). If potential customers search for specific words for your products, the search engine can point them to your site. SEO is a long-term plan; thus, do not expect a lot of traffic from search engines initially, even if you use all the right keywords.
Create quality digital content on your site that will enable customers to find accurate answers to their questions. Content marketing ideas include videos, customer testimonial blogs, demos, and blog posts. Contemplate content marketing as one of the most critical tasks on your daily to-do list. This is used together with social media posting.
More customers use online directories such as Yelp, Google My Business, and Facebook to find local businesses. Many city halls and chambers of commerce also have business directories. Try to include your business in as many relevant directories as possible. In addition, create listings for your business on specific directories that focus on your industry.
Your potential customers check social media daily, and you should be, too. Share relevant content that is interesting to your audience. You want to drive people back to your website, where customers can learn more about what you do and buy your products or services.
While you don't need to be on every social media platform ever invented, you will need to have a presence on both Facebook and Instagram, as each of those spaces also offers e-commerce capabilities, allowing you to sell directly from your social media accounts. Both platforms offer free ad training to help you understand how to market your business.
The number of customers and revenue must grow to expand and scale up the business. There are often four ways to do this:
Reflect on ways to automate or outsource tasks to scale up your business. For example, you can use a platform called Hootsuite to help you manage your accounts or even wholly outsource the time consumer if social media marketing takes up too much of your time.
Technology can also automate specific business processes, such as accounting, email marketing, and lead generation. This will free you up to concentrate on other aspects of your business.
The scale will require monitoring your finances and ensuring you are indeed profitable. If you do not bring home enough money to cover your costs, it is time to cut your expenses or find ways to increase revenue.
As your business grows, you must start delegating tasks and building a team to help manage the day-to-day operations. This could mean hiring additional staff, contractors, or freelancers.
Some tools for building a team include:
Hiring platforms: To find suitable candidates, hiring platforms like Indeed and Glassdoor help post job descriptions, screen résumés, and conduct video interviews.
Job boards: LinkedIn and Indeed allow free posting for open positions.
Social networks: LinkedIn and Facebook can be helpful when searching for an employee.
Freelance platforms: Tools like Upwork, Freelancer, and Fiverr can be used to find talented freelancers for one-time or short-term projects and to outsource projects such as customer service, social media marketing, or bookkeeping.
Consider partnering with other businesses in your industry. For example, if you are a wedding planner, you may find some support in partnering with a florist, photographer, catering company, or venue. This will allow you to offer your customers one-stop shopping for most of their needs in getting a wedding done and dusted.
Another example would be an e-commerce store partnering with a fulfillment center. This partnership can save money on shipping and storage and, more importantly, get the product to your customers much faster.
In finding potential partnerships, search for businesses in your industry that complement what you do. For example, if you are a web designer, you could seek to partner with a digital marketing agency.
You can also search for those businesses that share your target market but provide or offer different products and services. For example, if you have women's clothes, you may partner with a jewelry shop or a hair salon.
There are several funding opportunities for new businesses. Most require a business plan to access the funds. Some of the most frequently encountered ones are SBA, private grants, and angel investors, with crowdfunding and venture capital being relatively more modern examples.
The best business structure will depend entirely on what kind of company you form, your industry, and what you want to accomplish. However, any successful business structure will help your company set realistic goals and follow through on set tasks.
The size and type of business you want to start determines the cost of setting one up. For example, it is much cheaper to have a home-based business than a brick-and-mortar store. The higher it goes, depending on whether you need to rent or buy commercial space, hire employees, or sell stock. You can start almost for free by dropshipping or selling digital goods.
There are various answers to this question since the most profitable type of business will depend on several things, such as your industry, location, target market, or even your business model. Still, some businesses, such as luxury goods, high-end services, business-to-business companies, and even subscription-based businesses, are more profitable than others. If you are still deciding what type of business to start, think about your strengths and interest points besides getting a clue about the needs of your target market.
Starting a business takes time, effort, and persistence. But if you are willing to put in all the work, it can work wonders in helping you achieve your dreams and fulfill your goals. Once you ensure you've done your due diligence, have a good business plan, and pivot when you need to, stay focused and organized to continue to grow your business once you get operational.
Want to Start Your Business? Get Started Now!
J
I am planning to start a business but was not very confident about how to start but after going through this post, it really made me feel confident about my execution plan.
K
Well-written blog! Though the steps mentioned in this post are very clear, I thought for proper execution I need to outsource to a professional team.
H
Is it efficient to create a website on its own from website builders like Wix or Shopify or better to outsource web development services?
C
I have started my online store one year back but still not getting good leads and sales, suggest to me what best I can do to improve this situation?
R
For online surveys do we need different apps? If yes, from where we can get it?
B
I am a non-technical person, but I want to build my website because of low-budget. What should I do?
C
How much can it cost to start an online business?
S
Nice Blog! It really helped me in starting an online business. Can you help me with the process?