How to Start a Business: Everything You Need to Know

How to Start a Business: Everything You Need to Know

How to Start a Business: Everything You Need to Know

Key Takeaways

  • When starting a business, it’s important to build a solid foundation and create a business plan. 
  • Build a strong brand identity and marketing plan to help attract customers and repeat business.
  • Set up your business finances the right way to make it easier to build a financially healthy business.

Small businesses are the backbone of the economy, and entrepreneurs are coming from various types of industries. Over half a million small businesses are founded every month in the United States, showing that it’s never too late or lofty to take a business idea and start a new business. However, understanding everything you need to know as a startup, from creating a business plan or coming up with a business name, to identifying the best type of business structure, probably feels like a steep learning curve.

Nav wants to make sure that business owners nationwide have the resources and understanding of what it takes to start a business.

10 Steps to Start a Business

No matter the type of business you start, small business owners often take similar steps to get started. Here are the main steps to starting your business.

1. Create a Strong Brand Identity

A business will be identified by its own unique name. This name may be used when you go to get a business bank account, as your website domain name, to get an employer identification number, and more. As a sole proprietor, you can also operate under your own name.

While you want to choose carefully, don’t be worried that you have to keep your name forever. It’s not unusual for businesses to rebrand themselves at some point. (Example: Facebook in now “Meta.”) However, it may still be proactive to secure a name through trademarking and owning the intellectual property.

In addition to choosing your business name, you may also need to register it. You may need to register your business name with your secretary of state (or similar government agency)  as a fictitious business name (“doing business as” or “DBA”). If you form a business entity, you must register your business name and there may be state legal requirements that apply.  You may even want to protect your business name with a trademark. You can use the U.S. Patent and Trademark Office website for an initial search to see if any other business entities share the same name. An attorney to help you through the process can also help you avoid infringement.

Besides a business name, you will likely need a website, social media accounts and other ways for prospective customers to find your business.

2. Create a Business Plan

A business plan will include the purpose of your business, who it serves (target market), and the projected goals for months and years to come. Your business model should be represented through this plan no matter what business type you have.

Your business plan should have:

  • An executive summary. This is an overview of your entire business plan.
  • A business description. This summarizes the purpose of your business, its uniqueness, and what your company does.
  • Business model. How will your business make money? 
  • Pricing. How much will you charge for products and services? How much will it cost you to deliver your product or service (Cost of Goods Sold – COGS)?
  • Market research, strategies, and market analysis. This would include the size of your company’s specific market, detailed information on your target market and potential customers, in addition to customer buying patterns. 
  • Competitor analysis. Requires analyzing and assessing your market’s direct competitors while revealing their strengths and weaknesses.
  • A development plan of your products and services. A development plan describes the objectives of the company and how it will achieve them. This will also include start-up costs, targeted milestones, and a projected timeline for achieving certain goals.
  • An operations and management plan. This details how your business will operate. It may include whether your business will have a physical location or be an online business, what equipment and materials are needed, the team or staff, and anything else that focuses its attention on procedural practices of getting the business up and running.
  • Business financing 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 to grow at a consistent rate while protecting your personal assets.

Business plans aren’t always complicated. Sometimes a one-page business plan is enough.

3. Create Your Business Structure

The forms of business ownership include:

  • Sole proprietorship
  • Limited liability company (LLC)
  • C Corporation
  • S Corporation
  • Nonprofit

While sole proprietorships are easiest to start, legal structures such as LLCs and corporations can provide significant benefits, including asset protection and potential tax savings. Learn how to choose the best business structure with these business formation resources.

4. Get Your Tax ID Number

An employer identification number (EIN) is a tax identification number used for business tax filing purposes. But it is also often used as a way to identify a business much like a Social Security number. Your EIN may be associated with your business credit report, and it may be requested when you apply for business credit, get a credit card, apply for a business license, and identify your business if you apply for a small business grant or loan.If you create a business entity, your business will get an EIN, but you can also get an EIN for free from the IRS if you operate as a sole proprietorship.

5. Open a Business Bank Account

There are many banking options available for small businesses. Separate your business’s finances from your personal finances as soon as you can when you start your business. Using a business checking account from the beginning will make it much easier to track your business finances (for tax deductions and more). It also helps your business appear more professional for clients and customers.

6. Create a Marketing Plan

A marketing plan is key for any business that wants to grow and have consistent success. A marketing plan outlines the goals your company wants to achieve, besides how your business will be marketed to achieve said goals. This plan should include:

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

There are many types of marketing including local advertising, email marketing,  paid online ads, influencer marketing, and more.

7. Build Credit and Get Funding

Most businesses need funding at some point, whether it’s as simple as a small business credit card or net-30 account. A line of credit can help your business manage cash flow fluctuations, and SBA loans often provide crucial funding to businesses that have trouble accessing traditional financing. 

Expand your financing and business growth opportunities by taking the time to establish good business credit scores. Nav can help you find the small business loans your business needs.

8. Get An Accounting Solution

No matter what type of business you run, you’ll likely need to file business taxes. That may include local, state, and/or federal income taxes. You may have to pay other taxes such as payroll taxes, and sales or use tax. 

Bookkeeping software can be a great way to track your income and expenses, and make tax time much easier. Don’t want to do it yourself? A bookkeeper can take care of that task for you. Use accounting software or work with an accountant or CPA to make sure your business files taxes on time and gets maximum tax deductions.

9. Set Up Payments

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

Payment processing services can allow your business to easily accept debit and credit card payments, which can make it easier to sell online or in person. 

Read: How to Accept Credit Cards In Your Business

10. Launch Your Business

You’ll never have a perfect plan. At some point you have to flip over the “Open” sign (virtually or in person) and offer your products or services to customers so they can buy. It’s a scary and exciting step.

Nav can help with a marketplace of resources that will get you on your way to a successful business.

Use these business resources to get started:

Things to Consider Before Starting a Business

When doing business, there are many aspects for your company to be successful. And although there are some obvious things to consider before starting a business, there are also additional factors to ensure your business will do well.

Startup costs

Budget for your startup costs, which may include inventory, office or retail space, marketing, fulfillment, contractors or staff, and equipment. Your business plan will help guide you through these initial expenses.

Business insurance

Building a business creates some liabilities on behalf of the company. Having business insurance may cost upfront, but save you a lot of money in the long run. Types of insurance can include workers’ compensation, liability insurance such as product liability and general liability, hazard insurance, and more. 

Market demand

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

How to Start a Business FAQs 

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

How can I start a business with no money?

While it may be a lot easier to start a business with a lot of money, plenty of small businesses start with little to no startup funding. Some start as side hustles: the entrepreneur keeps a “day job,” while starting their business on the side. Others “bootstrap” and grow using revenue. And some use outside funding. That’s why it is helpful to work on your credit so you may be able to get funding for your start up if you need it.

Is $1000 enough to start a business?

There’s no minimum amount of money needed to start a business.That said, if funds are limited, you may need to steer toward a business that doesn’t require as much startup capital. For example, it would be very difficult to start a food truck with no money. But perhaps you can start by catering while you build a fan base.  

Will my business need permits or licenses?

Whether your business will require permits or licensing 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 operate from might have specific rules. This also includes businesses that fall under the “nonprofit” umbrella, so it’s good to check beforehand.

How do I market my product or service?

There are many ways to market your business’s products and services whether you have an ecommerce or brick-and-mortar business. Building an online presence is a great way to build your customer base and attract new customers. Social media has helped many new businesses gain a reach with and without ads. In addition, your business can use:

  • Email marketing
  • Ads
  • Word of mouth
  • Using search engine optimization (SEO)

Why do I need a business plan?

A business plan helps to identify that your business truly fulfills a need and/or solves a problem. It also helps with projecting the future and growth of your business. And with a business plan, you can secure funding such as venture capital or grants. The business plan can also give you keen insight into who your direct competitors are and what holes in the market you can fill that they aren’t.

How do I start my own business as a beginner?

The US government provides support for Americans who want to start businesses through the US Small Business Administration. You don’t have to know how to do everything yourself. 

Get help for free through the SBA and SBA Resource Partners such as Small Business Development Centers (SBDCs) and SCORE, which will match you to a business mentor. Find local assistance here.

How do I finance my business?

There are many funding options to explore for your business including:

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

Nav is a great place to start your search for financing. Get personalized financing options based on your business data.

This article was originally written on May 9, 2022 and updated on June 19, 2024.

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