Starting a New Business: Where to Start

Saying that starting your own business requires hard work is an understatement. Talk with a few business owners about what it took to open their doors, and you will quickly hear the same truth: a strong idea matters, but it only becomes a real business through planning, persistence, and many demanding hours. Even if you understand the effort entrepreneurship requires, you may not yet know the steps between the first idea and opening day. If you are willing to put in the work and have the passion to build a business, this guide will walk you through the process that can move you toward that first ribbon cutting.

Naming your business and creating a logo are exciting early steps, but they are only the beginning. You also need to think through your business structure, marketing strategy, operating roadmap, mission and vision, vendors, insurance, team, and launch plan. As you dive into the process, the scale of the challenge can become clear quickly. Getting guidance early can help you avoid costly missteps and move with more confidence. This entrepreneurial insight will walk you through the following steps:

Whether you are launching independently, exploring a franchise, or still shaping an idea, the same foundation matters: clarify what you offer, who you serve, how you will operate, and what resources you need before you open.

1.      Refine Your Business’s Mission and Vision

2.      Write a Business Plan  

3.      Choose a Business Structure 

4.      Determine if Insurance is Necessary or Required 

5.      Build Your Team 

6.      Research Options for Vendors 

7.      Brand Your Name for Marketing 

8.      Open Your Doors and Grow

Refine Your Business’s Mission and Vision 

You most likely have an idea of the industry you want to enter and what you want to provide to customers, clients, or other businesses. Before you move forward, research companies that offer similar products or services so you can understand the market and later use that research in your business plan. Look at what competitors are doing, then identify how your idea can stand apart. Will your business specialize in one area, or will it offer a broader range of services or products? What will be different, better, or more useful than what is already available? After you research the market and brainstorm answers to these questions, you will be ready to draft your mission and vision statements. Coaches and consultants can help with this process because your mission and vision define your passion and guide the rest of your plan, including the culture you want to build within your team and brand.

"It is good to know why you are launching your business." Glenn Gutek

If you are considering a franchise, much of the concept, brand, customer following, and business model may already be in place. That can be helpful, but it also means you need to decide whether the established mission, vision, culture, and operating expectations align with your goals and passions. A franchise also requires the right location and enough capital to cover the buy-in and startup costs.

"Many people think they have a great idea and jump into launching their business without thinking through who their customers will be, or why these people should want to buy from or hire them. Second, you need to clarify why you want to work with these customers – do you have a passion for making people's lives easier? Or enjoy creating art to bring color to their world? Identifying these answers helps clarify your mission. Third, you want to define how you will provide this value to your customers and how to communicate that value in a way that they are willing to pay." Stephanie Desaulniers

Use these questions to sharpen your idea: why are you starting this business, who will benefit from it, and what value will you provide that customers are willing to pay for? Writing those answers down will help you test whether your inspiration can become a viable business. We will return to these questions as the planning process develops.

Write a Business Plan

Once you have your mission, vision, and market research in place, you need to ask yourself these important questions in order to draft a strong business plan: 

 ·        What is the purpose of your business? 

·        Who are you selling to? 

·        What are your end goals? 

·        Where will you be marketing?

·        How will you finance your startup costs? 

Take time to answer these questions with careful research and honest financial assumptions. Do not rush past the details or rely only on enthusiasm. Launching without enough information can put your business at risk, especially if the audience you expect to serve is too small, too hard to reach, or not ready to pay for what you offer.

Coaches and consultants will help you with all of the crucial aspects of a well-thought-out business plan. You need research on demographics that may require conducting surveys, holding focus groups, and researching public data. Exit plans are also important to consider because it makes you look into the future and iron out some of the details that may not be on your mind during this initial stage of the planning process.

"Too often, new entrepreneurs are so excited about their business and so sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business." Josh Tolley

A business plan is a roadmap for your company’s direction and how your company will solve problems. A very important part of the plan is the assessment of finances for starting the business. If you seek lending from third parties your business plan is essential and must have detailed research in all of the previously discussed issues. Assessing your financial needs correctly and accurately is essential and will be determinative of success or failure. Questions to ask and answer are:

1.      How much money does it take to start up your business?

2.      How long will it take to start making a profit?

3.      Do you have enough funds to support the business during the beginning months/years?

4.      Do you have the means to fund your startup?

5.      Do you need to borrow money? 

6.      If you are planning to leave your current job to focus on your business, do you have money put away to support yourself until you start making a profit?

Startup businesses often fail because they run out of money too quickly before turning a profit. Overestimating the amount of capital you need is always recommended. Stay away from overspending and ask if the expense is a need or a want. “Wants” can wait. Don’t sacrifice your goals with high-pressure salespeople or fancy shiny unneeded equipment that may create future hardships. 

"A lot of startups tend to spend money on unnecessary things. Luxuries can come when you are established." Jean Paldan

Commercial loans or a small business loan through the Small Business Administration (SBA) are options to acquire funding. Startups requiring significant funding up front may want to consider an investor. Investors can provide several million dollars but may want to have a hands-on role in running your business. Another option is to launch a fundraiser campaign through one of the many crowdfunding platforms. 

Choose a Business Structure

Consider what kind of entity your business will be so that you will be ready to file it with the appropriate authority. The business structure affects everything from filing your taxes to personal liability. There are many structures that have their own legal effect. Business structures include sole proprietorship, a partnership, a limited liability company, a for-profit corporation, or a non-profit corporation. Depending on the state in which you file there are various options within each of these structures. Some information to understand is how each entity affects your personal liability, liability shared with others, how property is titled, how profits and losses are shared, and many other exposure issues.  

Ultimately, it is up to you to determine which type of entity is best for your current needs and future business goals. If you are struggling to make up your mind, it is not a bad idea to discuss the decision with a CPA or legal counsel.  

After you have decided on a business structure you are now ready to register with the federal and state governments in order to become recognized. The Internal Revenue Service (IRS) has requisite processes including obtaining an EIN and filing certain tax forms. Visit IRS.gov for more information. Each state has different requirements so be sure to visit your state’s secretary of state’s website for requirements and filing fees. Likewise, each kind of business structure has different document requirements. For example, corporations need articles of incorporation and bylaws whereas limited liability companies need articles and an operating agreement. Trademarks and Doing Business As (DBA) names/designations also need to be registered with your state. Registering as a foreign entity in a subsequent state all have different requirements and filing fees as well. A complete list of the forms, licensing requirements, and state-specific tax obligations for each type of entity can be found on the SBA’s website.  

Don’t panic! That is a lot of information and if you feel overwhelmed, you are not alone. Coaches and consultants are ready to help dig through all of these issues, so you do not waste time and money on filing the wrong documents or providing incorrect information. Take a deep breath and continue reading - the next steps in the process of starting a business are more exciting!

Determine if Insurance is Necessary or Required 

Purchasing the right insurance for your business is an important step to do before you officially launch. Dealing with such incidents as property damage, theft or even a customer lawsuit can be costly, and you need to be sure that you are properly protected. 

If your business will have employees, you will need to purchase workers' compensation and unemployment insurance. You may also need other types of coverage depending on your location and industry, but most small businesses are advised to purchase general liability insurance that covers property damage, bodily injury and personal injury to yourself or a third party. Most of the time if you have a leased premise your landlord will require an insurance policy so be sure to read the requirements which will be stated in your lease.

If your business provides a service, you may be required to purchase professional liability insurance. It covers you if you do something wrong or neglect to do something you should have done while operating your business. 

Other considerations are health insurance if you offer benefits. Life insurance is recommended especially if you or others are key personnel in your business. What would happen if you or your partner were to unexpectedly pass away? Can your business survive the financial hardship until a replacement can be found or the business wrapped up? 

The insurance needs of every business vary. Do not hesitate to seek help in determining which policies are mandatory, necessary, or recommended for your situation. At the same time, keep your budget in mind and evaluate whether each policy addresses a real risk. Once you understand your legal and practical protections, you can turn to one of the more energizing parts of building a business: finding the right people to join your vision.

Build Your Team

Unless you are planning to be your only employee you are going to need to hire a great team to get your company off the ground. 

“Entrepreneurs need to give the ‘people’ element of their businesses the same attention they give their products.” Joe Zawadzki 

 Questions to ask as you build your team:

·         Identify your needs - do you need engineers, data entry clerks, cashiers, stockers, human resources, office managers, etc.?

·         What personnel are absolutely necessary and which ones can be hired later?

·         Can you use contractors instead of full-time employees?

·         How will the team culture stay together?

·         What are the roles and responsibilities of each position?

·         Can some positions be combined to start?

·         What compensation structure will you offer?

·         Do you have a bonus or benefit plan?

·         What processes do you have in place for division of labor? For recognition? 

As you define the company’s staffing needs, get specific. Your employees are one of your biggest investments and one of your most important assets. The right team can strengthen a company, while unclear roles, poor hiring decisions, or weak culture can slow it down. Stay close to the culture you want to build and remain engaged in the work. Coaches and consultants can help you identify the roles you need first and build an initial team that supports your vision.

Research Options for Vendors

Your business will need vendors, whether that means product suppliers, professional services, technology platforms, or software that helps your team stay organized. Because third-party vendors may have access to important and sensitive business data, choose partners carefully. Look for vendors with experience in your industry, a strong track record with current clients, and systems that can grow with your company. Software decisions are especially important because moving company data into a larger system later can be time-consuming and costly. A restaurant, for example, may need a reliable point-of-sale system, while a sales office may need a strong platform for tracking leads. Coaches and consultants can help you identify which vendors, programs, contractors, or consultants are necessary now and which can wait.

Brand Your Name for Marketing

Before you start selling your product or service you need to build your brand and get a following of people so when you open your doors, they are ready to buy. Create a logo that easily identifies your brand and be consistent in using it across all platforms including your website, social media, and print media. Social media is a great way to spread the word about your new business as a promotional tool to offer coupons and discounts once you launch. Always stay up to date with relevant and interesting content about your business and industry. Do not underestimate the importance of your website. It can be a vital investment because many customers will use it to decide whether your business looks credible, current, and easy to work with. Many startups try to save money here, but a weak online presence can make it harder to build trust before launch.

"The issue is they see their website as a cost, not an investment. In today's digital age that's a huge mistake. The small business owners who understand how critical it is to have a great online presence will have a leg up on starting out strong."  Ruthann Bowen

Creating a marketing plan that includes future goals is essential to building and growing by continually and consistently getting the word out about your business. This process, especially in the beginning, is just as important as providing a quality product or service. Coaches and consultants help with all stages of this process including building your website and social media, providing advice, customizing content, and much more. 

Open Your Doors and Grow

Opening your doors and making that first sale is only the beginning. To stay profitable, you need to keep growing your customer base, strengthening relationships, and maintaining a steady pipeline of future business. Stay active on social media and in print marketing where appropriate, keep networking, reward recurring customers and referrals, and look for meaningful ways to show up in your community. Contract or automate where it makes sense, but remain visible and engaged because you are still the face of your business. Let your passion show through your service, your leadership, and your follow-through.

While these tips help launch your business and get you set to grow, remember your plan is a living document and needs attention from time to time. You want to make sure you prepare thoroughly for starting a business but as situations occur and times change so will your plan. Adapt and grow at all times. Avoid rigidity and expect the unexpected. Enjoy the journey!  

"Be prepared to adjust. There's a saying in the military that 'no plan survives the first contact' meaning that you can have the best plan in the world but as soon as it is in action, things change, and you have to be ready and willing to adapt and problem solve quickly. As an entrepreneur, your value lies in solving problems whether that is your product or service solving problems for other people or you solving problems within your organization." Stephanie Murray

Be passionate, be excellent, be energetic, and above all, be present. Starting a business is demanding, but careful planning, trusted guidance, and steady attention can help turn your idea into something sustainable.