It seems like everyone is starting some kind of business these days, so it must be simple… right? Well, it can be if you’re willing to put in the work that it takes to build a successful business. Here are a few things that it takes to get a business started and running effectively before you decide to start.
Writing A Business Plan
A traditional business plan is a very detailed, comprehensive description of your business. It states what your business is for, who it plans to serve, how much money you expect to make from it, and also a prediction of all startup costs to request funding. There are usually nine parts to a business plan, and they are:
- Executive Summary
- Company Description
- Market Analysis
- Organization and Management
- Marketing and Sales
- Funding Request
- Financial Projections
As you can see, it’s going to take a lot of research and time to ensure that your business plan is accepted by an investor.
Picking A Location
While you’re waiting on financing, you can still look for locations for your business. First you must decide if you want to operate from a physical location, or if you’d prefer to run an e-commerce business— which is done completely online. As for a physical location, you’ll need to buy/rent commercial real estate, or a building used for conducting business. If this is the route you want to take, remember to include the cost of buying or renting a building/space in the “Funding Request” portion of your business plan.
Choosing A Business Structure
The next task is to choose a business structure to get a better understanding of the legal aspects of your business. The four main business structures are:
- Limited Liability Company (LLC)
- Corporation (S, C, or B)
- Sole Proprietorship
An LLC is the most common type of business structure among small businesses because it provides the legal protection of a corporation and the tax benefits of a partnership.
Developing Your Brand
If you haven’t already, you should really start brainstorming on your company’s brand identity. This includes your company’s name, logo, and slogan if you choose to have one. A brand identity also consists of abstract details, such as how you want your brand to make your consumers feel. It can take a while to create a solid brand identity, but start with these elements:
- Create a unique color scheme that resonates with your company
- Establish your core values and integrate them into your company
- Make a list of adjectives that describe your company
Registering Your Business, Tax IDs, Licenses, And Permits
In the U.S., prospective business owners must register their business with their local, state, and federal governments. You’ll receive a tax ID or an employer identification number so that you can file taxes with the government. Depending on the type of business you have, you may also need to retrieve licenses and permits before you can legally begin operations.
Purchasing Business Insurance
Having business insurance is also a must, just like you’d have homeowners insurance, car insurance, health insurance, and life insurance. If you’re operating from a physical location, you’re going to need commercial property insurance in case your property gets damaged. You’ll also need commercial auto insurance if your business requires you to use a vehicle and workers’ compensation insurance if you hire employees. Other types of insurance that all businesses need include:
- General Liability Insurance (GLI)
- Product/Professional Liability Insurance (depends on if you sell products or provide professional services)
- Business Interruption Insurance (if your business can’t operate for whatever reason)
- Commercial Umbrella Insurance (covers anything that exceeds the limits of other insurance)
Building Your Team
Your team can consist of employees, consultants, contractors, vendors, and other companies you choose to outsource to. Of course, your immediate team will be the people who are on your payroll. No matter what type of people you hire to do any kind of work for your business, you need to take your time with your selection. Anyone who works for you is going to be a reflection of your business, no matter how big or small their role or responsibilities.
Selecting Business Software
When selecting your team you also need to select business software, as this can save you from hiring and paying a person to do the job. Some examples of business software include:
- Project management
- Sales and marketing
- Website building
A lot of these software, such as communication and project management, are available as apps on a smartphone so you don’t have to spend money on computer programs.
With all that goes into setting up a business, it’s easy to overlook one important aspect: how you’re going to accept payment from your consumers. With checks quickly fading out and cash seemingly following— not to mention the increasing number of e-commerce businesses— here are three ways to accept payments:
- Automated Clearing House (ACH) Processing: accepting ACH payments involves the electronic transfer of funds from one bank account to another.
- Credit/Debit Cards: the most common form of accepting payment, can be done with a card reader that attaches to a phone, POS (point-of-sale) software, or a virtual terminal (e-commerce businesses).
- Contactless Payment: such as Apple Pay or Google Pay.
There are many more minor and major details to consider when starting and running a business, but these are just a few of the most important and most forgotten aspects. Remember, a successful business isn’t created overnight. It takes a lot of time, money, research, and effort.