How To Start A Business In 11 Steps (2023 Guide)
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Updated: Mar 3, 2023, 6:43am
Table of Contents
Before you begin: get in the right mindset, 1. determine your business concept, 2. research your competitors and market, 3. create your business plan, 4. choose your business structure, 5. register your business and get licenses, 6. get your finances in order, 7. fund your business, 8. apply for business insurance, 9. get the right business tools, 10. market your business, 11. scale your business, what are the best states to start a business, bottom line, frequently asked questions (faqs).
Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, with many important considerations. To help take the guesswork out of the process and improve your chances of success, follow our comprehensive guide on how to start a business. We’ll walk you through each step of the process, from defining your business idea to registering, launching and growing your business.
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The public often hears about overnight successes because they make for a great headline. However, it’s rarely that simple—they don’t see the years of dreaming, building and positioning before a big public launch. For this reason, remember to focus on your business journey and don’t measure your success against someone else’s.
Consistency Is Key
New business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.
Take the Next Step
Some business owners dive in headfirst without looking and make things up as they go along. Then, there are business owners who stay stuck in analysis paralysis and never start. Perhaps you’re a mixture of the two—and that’s right where you need to be. The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may take minutes while others take a long time. The point is to always take the next step.
Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.
If you don’t have a firm idea of what your business will entail, ask yourself the following questions:
- What do you love to do?
- What do you hate to do?
- Can you think of something that would make those things easier?
- What are you good at?
- What do others come to you for advice about?
- If you were given ten minutes to give a five-minute speech on any topic, what would it be?
- What’s something you’ve always wanted to do, but lacked resources for?
These questions can lead you to an idea for your business. If you already have an idea, they might help you expand it. Once you have your idea, measure it against whether you’re good at it and if it’s profitable.
Your business idea also doesn’t have to be the next Scrub Daddy or Squatty Potty. Instead, you can take an existing product and improve upon it. Or, you can sell a digital product so there’s little overhead.
What Kind of Business Should You Start?
Before you choose the type of business to start, there are some key things to consider:
- What type of funding do you have?
- How much time do you have to invest in your business?
- Do you prefer to work from home or at an office or workshop?
- What interests and passions do you have?
- Can you sell information (such as a course), rather than a product?
- What skills or expertise do you have?
- How fast do you need to scale your business?
- What kind of support do you have to start your business?
- Are you partnering with someone else?
- Does the franchise model make more sense to you?
Consider Popular Business Ideas
Not sure what business to start? Consider one of these popular business ideas:
- Start a Franchise
- Start a Blog
- Start an Online Store
- Start a Dropshipping Business
- Start a Cleaning Business
- Start a Bookkeeping Business
- Start a Clothing Business
- Start a Landscaping Business
- Start a Consulting Business
- Start a Photography Business
- Start a Vending Machine Business
Most entrepreneurs spend more time on their products than they do getting to know the competition. If you ever apply for outside funding, the potential lender or partner wants to know: what sets you (or your business idea) apart? If market analysis indicates your product or service is saturated in your area, see if you can think of a different approach. Take housekeeping, for example—rather than general cleaning services, you might specialize in homes with pets or focus on garage cleanups.
Primary Research
The first stage of any competition study is primary research, which entails obtaining data directly from potential customers rather than basing your conclusions on past data. You can use questionnaires, surveys and interviews to learn what consumers want. Surveying friends and family isn’t recommended unless they’re your target market. People who say they’d buy something and people who do are very different. The last thing you want is to take so much stock in what they say, create the product and flop when you try to sell it because all of the people who said they’d buy it don’t because the product isn’t something they’d actually buy.
Secondary Research
Utilize existing sources of information, such as census data, to gather information when you do secondary research. The current data may be studied, compiled and analyzed in various ways that are appropriate for your needs but it may not be as detailed as primary research.
Conduct a SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis allows you to look at the facts about how your product or idea might perform if taken to market, and it can also help you make decisions about the direction of your idea. Your business idea might have some weaknesses that you hadn’t considered or there may be some opportunities to improve on a competitor’s product.
Asking pertinent questions during a SWOT analysis can help you identify and address weaknesses before they tank your new business.
A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management to understand and absorb. Even if you intend to self-finance, a business plan can help you flesh out your idea and spot potential problems. When writing a well-rounded business plan, include the following sections:
- Executive summary: The executive summary should be the first item in the business plan, but it should be written last. It describes the proposed new business and highlights the goals of the company and the methods to achieve them.
- Company description: The company description covers what problems your product or service solves and why your business or idea is best. For example, maybe your background is in molecular engineering, and you’ve used that background to create a new type of athletic wear—you have the proper credentials to make the best material.
- Market analysis: This section of the business plan analyzes how well a company is positioned against its competitors. The market analysis should include target market, segmentation analysis, market size, growth rate, trends and a competitive environment assessment.
- Organization and structure: Write about the type of business organization you expect, what risk management strategies you propose and who will staff the management team. What are their qualifications? Will your business be a single-member limited liability company (LLC) or a corporation ?
- Mission and goals: This section should contain a brief mission statement and detail what the business wishes to accomplish and the steps to get there. These goals should be SMART (specific, measurable, action-orientated, realistic and time-bound).
- Products or services: This section describes how your business will operate. It includes what products you’ll offer to consumers at the beginning of the business, how they compare to existing competitors, how much your products cost, who will be responsible for creating the products, how you’ll source materials and how much they cost to make.
- Background summary: This portion of the business plan is the most time-consuming to write. Compile and summarize any data, articles and research studies on trends that could positively and negatively affect your business or industry.
- Marketing plan: The marketing plan identifies the characteristics of your product or service, summarizes the SWOT analysis and analyzes competitors. It also discusses how you’ll promote your business, how much money will be spent on marketing and how long the campaign is expected to last.
- Financial plan: The financial plan is perhaps the core of the business plan because, without money, the business will not move forward. Include a proposed budget in your financial plan along with projected financial statements, such as an income statement, a balance sheet and a statement of cash flows. Usually, five years of projected financial statements are acceptable. This section is also where you should include your funding request if you’re looking for outside funding.
Learn more: Download our free simple business plan template .
Come Up With an Exit Strategy
An exit strategy is important for any business that is seeking funding because it outlines how you’ll sell the company or transfer ownership if you decide to retire or move on to other projects. An exit strategy also allows you to get the most value out of your business when it’s time to sell. There are a few different options for exiting a business, and the best option for you depends on your goals and circumstances.
The most common exit strategies are:
- Selling the business to another party
- Passing the business down to family members
- Liquidating the business assets
- Closing the doors and walking away
Develop a Scalable Business Model
As your small business grows, it’s important to have a scalable business model so that you can accommodate additional customers without incurring additional costs. A scalable business model is one that can be replicated easily to serve more customers without a significant increase in expenses.
Some common scalable business models are:
- Subscription-based businesses
- Businesses that sell digital products
- Franchise businesses
- Network marketing businesses
Start Planning for Taxes
One of the most important things to do when starting a small business is to start planning for taxes. Taxes can be complex, and there are several different types of taxes you may be liable for, including income tax, self-employment tax, sales tax and property tax. Depending on the type of business you’re operating, you may also be required to pay other taxes, such as payroll tax or unemployment tax.
When structuring your business, it’s essential to consider how each structure impacts the amount of taxes you owe, daily operations and whether your personal assets are at risk.
An LLC limits your personal liability for business debts. LLCs can be owned by one or more people or companies and must include a registered agent . These owners are referred to as members.
- LLCs offer liability protection for the owners
- They’re one of the easiest business entities to set up
- You can have a single-member LLC
- You may be required to file additional paperwork with your state on a regular basis
- LLCs can’t issue stock
- You’ll need to pay annual filing fees to your state
Limited Liability Partnership (LLP)
An LLP is similar to an LLC but is typically used for licensed business professionals such as an attorney or accountant. These arrangements require a partnership agreement.
- Partners have limited liability for the debts and actions of the LLP
- LLPs are easy to form and don’t require much paperwork
- There’s no limit to the number of partners in an LLP
- Partners are required to actively take part in the business
- LLPs can’t issue stock
- All partners are personally liable for any malpractice claims against the business
Sole Proprietorship
If you start a solo business, you might consider a sole proprietorship . The company and the owner, for legal and tax purposes, are considered the same. The business owner assumes liability for the business. So, if the business fails, the owner is personally and financially responsible for all business debts.
- Sole proprietorships are easy to form
- There’s no need to file additional paperwork with your state
- You’re in complete control of the business
- You’re personally liable for all business debts
- It can be difficult to raise money for a sole proprietorship
- The business may have a limited life span
Corporation
A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C-corporation (C-corp) or an S-corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements. Larger companies and startups hoping to attract venture capital are usually taxed as C-corps.
- Corporations offer liability protection for the owners
- The life span of a corporation is not limited
- A corporation can have an unlimited number of shareholders
- Corporations are subject to double taxation
- They’re more expensive and complicated to set up than other business structures
- The shareholders may have limited liability
Before you decide on a business structure, discuss your situation with a small business accountant and possibly an attorney, as each business type has different tax treatments that could affect your bottom line.
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There are several legal issues to address when starting a business after choosing the business structure. The following is a good checklist of items to consider when establishing your business:
Choose Your Business Name
Make it memorable but not too difficult. Choose the same domain name, if available, to establish your internet presence. A business name cannot be the same as another registered company in your state, nor can it infringe on another trademark or service mark that is already registered with the United States Patent and Trademark Office (USPTO).
Business Name vs. DBA
There are business names, and then there are fictitious business names known as “Doing Business As” or DBA. You may need to file a DBA if you’re operating under a name that’s different from the legal name of your business. For example, “Mike’s Bike Shop” is doing business as “Mike’s Bikes.” The legal name of the business is “Mike’s Bike Shop,” and “Mike’s Bikes” is the DBA.
You may need to file a DBA with your state, county or city government offices. The benefits of a DBA include:
- It can help you open a business bank account under your business name
- A DBA can be used as a “trade name” to brand your products or services
- A DBA can be used to get a business license
Register Your Business and Obtain an EIN
You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. You’ll also pay a filing fee. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts.
Next, apply for an employer identification number (EIN) . All businesses, other than sole proprietorships with no employees, must have a federal employer identification number. Submit your application to the IRS and you’ll typically receive your number in minutes.
Get Appropriate Licenses and Permits
Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area.
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Open a Business Bank Account
Keep your business and personal finances separate. Here’s how to choose a business checking account —and why separate business accounts are essential. When you open a business bank account, you’ll need to provide your business name and your business tax identification number (EIN). This business bank account can be used for your business transactions, such as paying suppliers or invoicing customers. Most times, a bank will require a separate business bank account in order to issue a business loan or line of credit.
Hire a Bookkeeper or Get Accounting Software
If you sell a product, you need an inventory function in your accounting software to manage and track inventory. The software should have ledger and journal entries and the ability to generate financial statements.
Some software programs double as bookkeeping tools. These often include features such as check writing and managing receivables and payables. You can also use this software to track your income and expenses, generate invoices, run reports and calculate taxes.
There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself.
Determine Your Break-Even Point
Before you fund your business, you must get an idea of your startup costs. To determine these, make a list of all the physical supplies you need, estimate the cost of any professional services you will require, determine the price of any licenses or permits required to operate and calculate the cost of office space or other real estate. Add in the costs of payroll and benefits, if applicable.
Businesses can take years to turn a profit, so it’s better to overestimate the startup costs and have too much money than too little. Many experts recommend having enough cash on hand to cover six months of operating expenses.
When you know how much you need to get started with your business, you need to know the point at which your business makes money. This figure is your break-even point.
In contrast, the contribution margin = total sales revenue – cost to make product
For example, let’s say you’re starting a small business that sells miniature birdhouses for fairy gardens. You have determined that it will cost you $500 in startup costs. Your variable costs are $0.40 per birdhouse produced, and you sell them for $1.50 each.
Let’s write these out so it’s easy to follow:
This means that you need to sell at least 456 units just to cover your costs. If you can sell more than 456 units in your first month, you will make a profit.
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There are many different ways to fund your business—some require considerable effort, while others are easier to obtain. Two categories of funding exist: internal and external.
Internal funding includes:
- Personal savings
- Credit cards
- Funds from friends and family
If you finance the business with your own funds or with credit cards, you have to pay the debt on the credit cards and you’ve lost a chunk of your wealth if the business fails. By allowing your family members or friends to invest in your business, you are risking hard feelings and strained relationships if the company goes under. Business owners who want to minimize these risks may consider external funding.
External funding includes:
- Small business loans
- Small business grants
- Angel investors
- Venture capital
- Crowdfunding
Small businesses may have to use a combination of several sources of capital. Consider how much money is needed, how long it will take before the company can repay it and how risk-tolerant you are. No matter which source you use, plan for profit. It’s far better to take home six figures than make seven figures and only keep $80,000 of it.
Funding ideas include:
- Invoice factoring: With invoice factoring , you can sell your unpaid invoices to a third party at a discount.
- Business lines of credit: Apply for a business line of credit , which is similar to a personal line of credit. The credit limit and interest rate will be based on your business’s revenue, credit score and financial history.
- Equipment financing: If you need to purchase expensive equipment for your business, you can finance it with a loan or lease.
- Small Business Administration (SBA) microloans: Microloans are up to $50,000 loans that can be used for working capital, inventory or supplies and machinery or equipment.
- Grants: The federal government offers grants for businesses that promote innovation, export growth or are located in historically disadvantaged areas. You can also find grants through local and regional organizations.
- Crowdfunding: With crowdfunding , you can raise money from a large group of people by soliciting donations or selling equity in your company.
Choose the right funding source for your business by considering the amount of money you need, the time frame for repayment and your tolerance for risk.
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You need to have insurance for your business , even if it’s a home-based business or you don’t have any employees. The type of insurance you need depends on your business model and what risks you face. You might need more than one type of policy, and you might need additional coverage as your business grows. In most states, workers’ compensation insurance is required by law if you have employees.
Work With an Agent To Get Insured
An insurance agent can help determine what coverages are appropriate for your business and find 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
- Liability insurance protects your business against third-party claims of bodily injury, property damage and personal injury such as defamation or false advertising.
- Property insurance covers the physical assets of your business, including your office space, equipment and inventory.
- Business interruption insurance pays for the loss of income if your business is forced to close temporarily due to a covered event such as a natural disaster.
- Product liability insurance protects against claims that your products caused bodily injury or property damage.
- Employee practices liability insurance covers claims from employees alleging discrimination, sexual harassment or other wrongful termination.
- Workers’ compensation insurance covers medical expenses and income replacement for employees who are injured on the job.
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Business tools can help make your life easier and make your business run more smoothly. The right tools can help you save time, automate tasks and make better decisions.
Consider the following tools in your arsenal:
- Accounting software : Track your business income and expenses, prepare financial statements and file taxes. Examples include QuickBooks and FreshBooks.
- Customer relationship management (CRM) software : This will help you manage your customer relationships, track sales and marketing data and automate tasks like customer service and follow-ups. Examples include Zoho CRM and monday.com.
- Project management software : Plan, execute and track projects. It can also be used to manage employee tasks and allocate resources. Examples include Airtable and ClickUp.
- Credit card processor : This will allow you to accept credit card payments from customers. Examples include Stripe and PayPal.
- Point of sale (POS) : A system that allows you to process customer payments. Some accounting software and CRM software have POS features built-in. Examples include Clover and Lightspeed.
- Virtual private network (VPN) : Provides a secure, private connection between your computer and the internet. This is important for businesses that handle sensitive data. Examples include NordVPN and ExpressVPN.
- Merchant services : When customers make a purchase, the money is deposited into your business account. You can also use merchant services to set up recurring billing or subscription payments. Examples include Square and Stripe.
- Email hosting : This allows you to create a professional email address with your own domain name. Examples include G Suite and Microsoft Office 365.
Many business owners spend so much money creating their products that there isn’t a marketing budget by the time they’ve launched. Alternatively, they’ve spent so much time developing the product that marketing is an afterthought.
Create a Website
Even if you’re a brick-and-mortar business, a web presence is essential. Creating a website doesn’t take long, either—you can have one done in as little as a weekend. You can make a standard informational website or an e-commerce site where you sell products online. If you sell products or services offline, include a page on your site where customers can find your locations and hours. Other pages to add include an “About Us” page, product or service pages, frequently asked questions (FAQs), a blog and contact information.
Optimize Your Site for SEO
After getting a website or e-commerce store, focus on optimizing it for search engines (SEO). This way, when a potential customer searches for specific keywords for your products, the search engine can point them to your site. SEO is a long-term strategy, so don’t expect a ton of traffic from search engines initially—even if you’re using all the right keywords.
Create Relevant Content
Provide quality digital content on your site that makes it easy for customers to find the correct answers to their questions. Content marketing ideas include videos, customer testimonials, blog posts and demos. Consider content marketing one of the most critical tasks on your daily to-do list. This is used in conjunction with posting on social media.
Get Listed in Online Directories
Customers use online directories like Yelp, Google My Business and Facebook to find local businesses. Some city halls and chambers of commerce have business directories too. Include your business in as many relevant directories as possible. You can also create listings for your business on specific directories that focus on your industry.
Develop a Social Media Strategy
Your potential customers are using social media every day—you need to be there too. Post content that’s interesting and relevant to your audience. Use social media to drive traffic back to your website where customers can learn more about what you do and buy your products or services.
You don’t necessarily need to be on every social media platform available. However, you should have a presence on Facebook and Instagram because they offer e-commerce features that allow you to sell directly from your social media accounts. Both of these platforms have free ad training to help you market your business.
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To scale your business, you need to grow your customer base and revenue. This can be done by expanding your marketing efforts, improving your product or service, collaborating with other creators or adding new products or services that complement what you already offer.
Think about ways you can automate or outsource certain tasks so you can focus on scaling the business. For example, if social media marketing is taking up too much of your time, consider using a platform such as Hootsuite to help you manage your accounts more efficiently. You can also consider outsourcing the time-consumer completely.
You can also use technology to automate certain business processes, including accounting, email marketing and lead generation. Doing this will give you more time to focus on other aspects of your business.
When scaling your business, it’s important to keep an eye on your finances and make sure you’re still profitable. If you’re not making enough money to cover your costs, you need to either reduce your expenses or find ways to increase your revenue.
Build a Team
As your business grows, you’ll need to delegate tasks and put together a team of people who can help you run the day-to-day operations. This might include hiring additional staff, contractors or freelancers.
Resources for building a team include:
- Hiring platforms: To find the right candidates, hiring platforms, such as Indeed and Glassdoor, can help you post job descriptions, screen résumés and conduct video interviews.
- Job boards: Job boards such as Craigslist and Indeed allow you to post open positions for free.
- Social media: You can also use social media platforms such as LinkedIn and Facebook to find potential employees.
- Freelance platforms: Using Upwork, Freelancer and Fiverr can help you find talented freelancers for one-time or short-term projects. You can also outsource certain tasks, such as customer service, social media marketing or bookkeeping.
You might also consider partnering with other businesses in your industry. For example, if you’re a wedding planner, you could partner with a florist, photographer, catering company or venue. This way, you can offer your customers a one-stop shop for all their wedding needs. Another example is an e-commerce store that partners with a fulfillment center. This type of partnership can help you save money on shipping and storage costs, and it can also help you get your products to your customers faster.
To find potential partnerships, search for businesses in your industry that complement what you do. For example, if you’re a web designer, you could partner with a digital marketing agency.
You can also search for businesses that serve the same target market as you but offer different products or services. For example, if you sell women’s clothing, you could partner with a jewelry store or a hair salon.
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To rank the best states to start a business in 2023, Forbes Advisor analyzed 18 key metrics across five categories to determine which states are the best and worst to start a business in. Our ranking takes into consideration factors that impact businesses and their ability to succeed, such as business costs, business climate, economy, workforce and financial accessibility in each state. Check out the full report .
Starting a small business takes time, effort and perseverance. But if you’re willing to put in the work, it can be a great way to achieve your dreams and goals. Be sure to do your research, create a solid business plan and pivot along the way. Once you’re operational, don’t forget to stay focused and organized so you can continue to grow your business.
How do I start a small business with no money?
There are several funding sources for brand new businesses and most require a business plan to secure it. These include the SBA , private grants, angel investors, crowdfunding and venture capital.
What is the best business structure?
The best business structure for your business will depend entirely on what kind of company you form, your industry and what you want to accomplish. But any successful business structure will be one that will help your company set realistic goals and follow through on set tasks.
Do I need a business credit card?
You don’t need one, but a business credit card can be helpful for new small businesses. It allows you to start building business credit, which can help you down the road when you need to take out a loan or line of credit. Additionally, business credit cards often come with rewards and perks that can save you money on business expenses.
Do I need a special license or permit to start a small business?
The answer to this question will depend on the type of business you want to start and where you’re located. Some businesses, such as restaurants, will require a special permit or license to operate. Others, such as home daycare providers, may need to register with the state.
How much does it cost to create a business?
The cost of starting a business will vary depending on the size and type of company you want to create. For example, a home-based business will be less expensive to start than a brick-and-mortar store. Additionally, the cost of starting a business will increase if you need to rent or buy commercial space, hire employees or purchase inventory. You could potentially get started for free by dropshipping or selling digital goods.
How do I get a loan for a new business?
The best way to get a loan for a new business is to approach banks or other financial institutions and provide them with a business plan and your financial history. You can also look into government-backed loans, such as those offered by the SBA. Startups may also be able to get loans from alternative lenders, including online platforms such as Kiva.
Do I need a business degree to start a business?
No, you don’t need a business degree to start a business. However, acquiring a degree in business or a related field can provide you with the understanding and ability to run an effective company. Additionally, you may want to consider taking some business courses if you don’t have a degree in order to learn more about starting and running a business. You can find these online and at your local Small Business Administration office.
What are some easy businesses to start?
One of the easiest businesses to start also has the lowest overhead: selling digital goods. This can include items such as e-books, online courses, audio files or software. If you have expertise in a particular area or niche, this is a great option for you. Dropshipping is also a great option because you don’t have to keep inventory. Or, you could buy wholesale products or create your own. Once you create your product, you can sell it through your own website or third-party platforms such as Amazon or Etsy.
What is the most profitable type of business?
There is no one answer to this question because the most profitable type of business will vary depending on a number of factors, such as your industry, location, target market and business model. However, some businesses tend to be more profitable than others, such as luxury goods, high-end services, business-to-business companies and subscription-based businesses. If you’re not sure what type of business to start, consider your strengths and interests, as well as the needs of your target market, to help you choose a profitable business idea.
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Zoho desk review 2023: features, pricing & more, what is churn rate & how do you calculate it, what is customer lifetime value (clv), gender pay gap statistics in 2023, u.s digital tipping culture in 2023.
Kathy Haan, MBA is a former financial advisor-turned-writer and business coach. For over a decade, she’s helped small business owners make money online. When she’s not trying out the latest tech or travel blogging with her family, you can find her curling up with a good novel.
How to Start a Business: A Step-by-Step Guide
Starting a new small business? Find out where to begin and how to achieve success.
- You should prepare thoroughly before starting a business, but realize that things will almost certainly go awry. To run a successful business, you must adapt to changing situations.
- Conducting in-depth market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves running surveys, holding focus groups, and researching SEO and public data.
- In addition to selling your product or service, you need to build up your brand and get a following of people who are interested in what your business offers.
- This article is for entrepreneurs who want to learn the basic steps of starting a new business.
Starting a business can be hard work, but if you break down the process of launching your new company into individual steps you can make it easier. Rather than spinning your wheels and guessing where to start, follow this 10-step checklist to transform your business from a lightbulb above your head into a real entity.
How to start a business
1. refine your idea..
If you’re thinking about starting a business, you likely already have an idea of what you want to sell online , or at least the market you want to enter. Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, only faster and cheaper), you’ve got a solid idea and are ready to create a business plan.
Define your “why?”
“In the words of Simon Sinek, ‘always start with why,’” Glenn Gutek, CEO of Awake Consulting and Coaching, told Business News Daily. “It is good to know why you are launching your business. In this process, it may be wise to differentiate between [whether] the business serves a personal why or a marketplace why. When your why is focused on meeting a need in the marketplace, the scope of your business will always be larger than a business that is designed to serve a personal need.”
Consider franchising.
Another option is to open a franchise of an established company. The concept, brand following and business model are already in place; you only need a good location and the means to fund your operation.
Brainstorm your business name.
Regardless of which option you choose, it’s vital to understand the reasoning behind your idea. Stephanie Desaulniers, owner of Business by Dezign and former director of operations and women’s business programs at Covation Center, cautions entrepreneurs against writing a business plan or brainstorming a business name before nailing down the idea’s value.
Editor’s note: Looking for a small business loan? Fill out the questionnaire below to have our vendor partners contact you about your needs.
Clarify your target customers.
Desaulniers said too often, people jump into launching their business without spending time to think about who their customers will be and why those customers would want to buy from them or hire them.
“You need to clarify why you want to work with these customers — do you have a passion for making people’s lives easier?” Desaulniers said. “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.”
During the ideation phase, you need to iron out the major details. If the idea isn’t something you’re passionate about or if there’s no market for your creation, it might be time to brainstorm other ideas.
Tip: To refine your business idea, identify your “why,” your target customers and your business name.
2. Write a business plan.
Once you have your idea in place, you need to ask yourself a few important questions: What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? These questions can be answered in a well-written business plan .
Fledgling business owners can make a lot of mistakes by rushing into things without pondering these aspects of the business. You need to find your target customer base. Who is going to buy your product or service? What would be the point if you can’t find evidence of a demand for your idea?
This business plan template can help you launch and grow your business the right way.
Conduct market research.
Conducting thorough market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves conducting surveys, holding focus groups, and researching SEO and public data.
Market research helps you understand your target customer — their needs, preferences and behavior — as well as your industry and competitors. Many small business professionals recommend gathering demographic information and conducting a competitive analysis to better understand opportunities and limitations within your market.
The best small businesses have differentiated products or services from the competition. This significantly impacts your competitive landscape and allows you to convey unique value to potential customers.
Consider an exit strategy.
It’s also a good idea to consider an exit strategy as you compile your business plan. Generating some idea of how you’ll eventually exit the business forces you to look to the future.
“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,” said Josh Tolley, CEO of both Shyft Capital and Kavana.
“When you board an airplane, what is the first thing they show you? How to get off of it. When you go to a movie, what do they point out before the feature begins to play? Where the exits are. During your first week of kindergarten, they line up all the kids and teach them fire drills to exit the building. Too many times I have witnessed business leaders that don’t have three or four predetermined exit routes. This has led to lower company value and even destroyed family relationships.”
A business plan helps you figure out where your company is going, how it will overcome any potential difficulties, and what you need to sustain it. When you’re ready to put pen to paper, use a free template to help.
3. Assess your finances.
Starting any business has a price, so you need to determine how you will cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you’re planning to leave your current job to focus on your business, do you have savings to support yourself until you make a profit? Find out how much your startup costs will be.
Many startups fail because they run out of money before turning a profit. It’s never a bad idea to overestimate the amount of startup capital you need, as it can take time before the business begins to bring in sustainable revenue.
Perform a break-even analysis.
One way you can determine how much money you need is to perform a break-even analysis. This essential element of financial planning helps business owners determine when their company, product or service will be profitable.
The formula is simple:
- Fixed Costs ÷ (Average Price Per Unit – Variable Costs) = Break-Even Point
Every entrepreneur should use this formula as a tool because it tells you the minimum performance your business must achieve to avoid losing money. Furthermore, it helps you understand exactly where your profits come from, so you can set production goals accordingly.
Here are the three most common reasons to conduct a break-even analysis:
Ask yourself: How much revenue do I need to generate to cover all my expenses? Which products or services turn a profit, and which ones are sold at a loss?
Ask yourself: What are the fixed rates, 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: How can I reduce my overall fixed costs? How can I reduce the variable costs per unit? How can I improve sales?
Watch your expenses.
Don’t overspend when starting a business. Understand the types of purchases that make sense for your business and avoid overspending on fancy new equipment that won’t help you reach your business goals. Monitor your business expenses to ensure you are staying on track.
“A lot of startups tend to spend money on unnecessary things,” said Jean Paldan, founder and CEO of Rare Form New Media. “We worked with a startup with two employees but spent a huge amount on office space that would fit 20 people. They also leased a professional high-end printer that was more suited for a team of 100; it had key cards to track who was printing what and when. Spend as little as possible when you start, and only on the things essential for the business to grow and succeed. Luxuries can come when you’re established.”
Using accounting software can streamline your expense tracking. Read our reviews of the best accounting software to learn more and find the right platform for your needs. Try starting with our Intuit QuickBooks Online review — this vendor is our top pick for small businesses.
Consider your funding options.
Startup capital for your business can come from various means. The best way to acquire funding for your business depends on several factors, including creditworthiness, the amount needed and available options.
- Business loans. If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you cannot take out a bank loan, apply for a small business loan through the S. Small Business Administration (SBA) or an alternative lender. [Read related article: Best Business Loans ]
- Business grants. Business grants are similar to loans, but do not need to be paid back. Business grants are typically very competitive and come with stipulations that the business must meet to be considered. When securing a small business grant , look for ones specific to your situation. Options include minority-owned business grants, grants for women-owned businesses and government grants .
- Startups that require significant funding up front may want to bring on an angel investor . Investors can provide several million dollars or more to a fledgling company in exchange for a hands-on role in running your business.
- Alternatively, you can launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers. Crowdfunding has helped numerous companies in recent years, and dozens of reliable crowdfunding platforms are designed for different types of businesses.
You can learn more about each of these capital sources and more in our guide to startup finance options .
Choose the right business bank.
When you’re choosing a business bank , size matters. Marcus Anwar, co-founder of OhMy Canada, recommends smaller community banks because they are in tune with the local market conditions and will work with you based on your overall business profile and character.
“They’re unlike big banks that look at your credit score and will be more selective to loan money to small businesses,” Anwar said. “Not only that, but small banks want to build a personal relationship with you and ultimately help you if you run into problems and miss a payment. Another good thing about smaller banks is that decisions are made at the branch level, which can be much quicker than big banks, where decisions are made at a higher level.”
Anwar believes that you should ask yourself these questions when choosing a bank for your business:
- What is important to me?
- Do I want to build a close relationship with a bank that’s willing to help me in any way possible?
- Do I want to be just another bank account, like big banks will view me as?
Ultimately, the right bank for your business comes down to your needs. Writing down your banking needs can help narrow your focus to what you should be looking for. Schedule meetings with various banks and ask questions about how they work with small businesses to find the best bank for your business. [Read related article: Business Bank Account Checklist: Documents You’ll Need ]
Financially, you should perform a break-even analysis, consider your expenses and funding options, and choose the right bank for your business.
4. Determine your legal business structure.
Before registering your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong.
- Sole proprietorship: You can register for a sole proprietorship if you own the business independently and plan to be responsible for all debts and obligations. Be warned that this route can directly affect your personal credit.
- Partnership: Alternatively, as its name implies, a business partnership means that two or more people are held personally liable as business owners. You don’t have to go it alone if you can find a business partner with complementary skills to your own. It’s usually a good idea to add someone into the mix to help your business flourish.
- Corporation: If you want to separate your personal liability from your company’s liability, consider the pros and cons of corporations (e.g., an S corporation or C corporation ). Although each type of corporation is subject to different guidelines, this legal structure generally makes a business a separate entity from its owners. Therefore, corporations can own property, assume liability, pay taxes, enter contracts, sue and be sued like any other individual. “Corporations, especially C corporations, are especially suitable for new businesses that plan on ‘going public’ or seeking funding from venture capitalists in the near future,” said Deryck Jordan, managing attorney at Jordan Counsel.
- Limited liability company: One of the most common structures for small businesses is the limited liability company (LLC). This hybrid structure has the legal protections of a corporation while allowing for the tax benefits of a partnership.
Ultimately, it is up to you to determine which type of entity is best for your current needs and future business goals. It’s important to learn about the various legal business structures available. If you’re struggling to make up your mind, discussing the decision with a business or legal advisor is a great idea.
Did you know? You need to choose a legal structure for your business, such as a sole proprietorship, partnership, corporation or LLC .
5. Register with the government and IRS.
You will need to acquire business licenses before you can legally operate your business. For example, you must register your business with federal, state and local governments. There are several documents you must prepare before registering.
Articles of incorporation and operating agreements
To become an officially recognized business entity, you must register with the government. Corporations need an articles of incorporation document, which includes your business name, business purpose, corporate structure, stock details and other information about your company. Similarly, some LLCs will need to create an operating agreement.
Doing business as (DBA)
If you don’t have articles of incorporation or an operating agreement, you will need to register your business name, which can be your legal name, a fictitious DBA name (if you are the sole proprietor), or the name you’ve come up with for your company. You may also want to take steps to trademark your business name for extra legal protection.
Most states require you to get a DBA. You may need to apply for a DBA certificate if you’re in a general partnership or a sole proprietorship operating under a fictitious name. Contact or visit your local county clerk’s office to ask about specific requirements and fees. Generally, there is a registration fee involved.
Employer identification number (EIN)
After you register your business, you may need to get an employer identification number from the IRS. While this is not required for sole proprietorships with no employees, you may want to apply for one anyway to keep your personal and business taxes separate, or to save yourself the trouble if you decide to hire someone later on. The IRS has provided a checklist to determine whether you will require an EIN to run your business. If you do need an EIN, you can register online for free.
Income tax forms
You must file certain forms to fulfill your federal and state income tax obligations . Your business structure determines the forms you need. You will need to check your state’s website for information on state-specific and local tax obligations. Once you set this all up, the best online tax software can help you file and pay your taxes quarterly and annually.
“You might be tempted to wing it with a PayPal account and social media platform, but if you start with a proper foundation, your business will have fewer hiccups to worry about in the long run,” said Natalie Pierre-Louis, licensed attorney and owner of NPL Consulting.
Federal, state, and local licenses and permits
Some businesses may also require federal, state or local licenses and permits to operate. Your local city hall is the best place to obtain a business license. You can then use the SBA’s database to search for state and business type licensing requirements.
Businesses and independent contractors in certain trades are required to carry professional licenses. A commercial driver’s license (CDL) is one example of a professional business license. Individuals with a CDL can operate certain types of vehicles, such as buses, tank trucks and tractor-trailers. A CDL is divided into three classes: Class A, Class B and Class C.
You should also check with your city and state to find out if you need a seller’s permit that authorizes your business to collect sales tax from your customers. A seller’s permit goes by numerous names, including resale permit, resell permit, permit license, reseller permit, resale ID, state tax ID number, reseller number, reseller license permit or certificate of authority.
It’s important to note that these requirements and names vary from state to state. You can register for a seller’s permit through the state government website of the state(s) you’re doing business in.
Jordan says that not all businesses need to collect sales tax (or obtain a seller’s permit).
“For example, New York sales tax generally is not required for the sale of most services (such as professional services, education, and capital improvements to real estate), medicine or food for home consumption,” Jordan said. “So, for example, if your business only sells medicine, you do not need a New York seller’s permit. But New York sales tax must be collected in conjunction with the sale of new tangible personal goods, utilities, telephone service, hotel stays, and food and beverages (in restaurants).”
Key takeaway: Register key documents like articles of incorporation or an operating agreement, a DBA, an EIN, income tax forms, and other applicable licenses and permits.
6. Purchase an insurance policy.
It might slip your mind as something you intend to get around to eventually, but purchasing the right insurance for your business is an important step to take before you officially launch. Dealing with incidents such as property damage, theft or even a customer lawsuit can be costly, and you need to be sure that you’re properly protected.
Although you should consider several types of business insurance , there are a few basic insurance plans that most small businesses can benefit from. For example, if your business will have employees, you will at least 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 (GL) insurance, or a business owner’s policy. GL covers property damage, bodily injury, and personal injury to yourself or a third party.
If your business provides a service, you may also want professional liability insurance. It covers you if you do something wrong or neglect to do something you should have done while operating your business.
7. Build your team.
Unless you’re planning to be your only employee, you’ll need to recruit and hire a great team to get your company off the ground. Joe Zawadzki, general partner at AperiamVentures, said entrepreneurs need to give the “people” element of their businesses the same attention they give their products.
“People build your product,” Zawadzki said. “ Identifying your founding team , understanding what gaps exist, and [determining] how and when you will address them should be top priority. Figuring out how the team will work together … is equally important. Defining roles and responsibilities, division of labor, how to give feedback, or how to work together when not everyone is in the same room will save you a lot of headaches down the line.”
8. Choose your vendors.
Running a business can be overwhelming, and you and your team probably aren’t going to be able to do it all on your own. That’s where third-party vendors come in. Companies in every industry, whether that’s HR or business phone systems , exist to partner with you and help you run your business better. For example, with a business phone system, you can design an IVR system to automatically route your callers to the right representatives.
When you’re searching for B2B partners, choose carefully. These companies will have access to your most vital and potentially sensitive business data, so finding someone you can trust is critical. In our guide to choosing business partners , our expert sources recommended asking potential vendors about their experience in your industry, their track record with existing clients, and what kind of growth they’ve helped other clients achieve.
Not every business will need the same type of vendors, but there are common products and services that almost every business will need. Consider the following functions that are a necessity for any type of business.
- Enabling multiple customer payment types: Offering multiple payment options will ensure you can make a sale in whatever format is easiest for the target customer. Compare options to find the best credit card processing provider to ensure you’re getting the best rate for your business. That’s because small business credit card processing is often a direct route to more revenue and a larger customer base.
- Taking customer payments: Set up a point-of-sale (POS) system so that you have a state-of-the-art interface for making sales. The best POS systems couple this payment technology — which largely overlaps with credit card processing — with inventory management and customer management features. As such, POS systems are especially important if you plan to sell products instead of offering services.
- Managing finances: Many business owners manage their own accounting functions when starting their business, but as your business grows, you can save time by hiring an accountant , or by choosing the right accounting software provider .
9. Brand yourself and advertise.
Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your literal or figurative doors for business.
- Company website: Take your reputation online and build a company website . Many customers turn to the internet to learn about a business, and a website is a digital proof that your small business exists. It is also a great way to interact with current and potential customers.
- Social media: Use social media to spread the word about your new business, perhaps as a promotional tool to offer coupons and discounts to followers once you launch. The best social media platforms to use will depend on your target audience.
- CRM: The best CRM platforms allow you to store customer data to improve how you market to them. A well-thought-out email marketing campaign can do wonders for reaching customers and communicating with your audience. To be successful, you will want to strategically build your email marketing contact list .
- Logo: Create a logo to help people easily identify your brand, and use it across all of your platforms.
Keep your digital assets up to date with relevant, interesting content about your business and industry. According to Ruthann Bowen, chief marketing officer at EastCamp Creative, too many startups have the wrong mindset about their websites.
“The issue is they see their website as a cost, not an investment,” Bowen said. “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.”
Creating a marketing plan that goes beyond your launch is essential to building a clientele because it should continually get the word out about your business. This process is just as important as providing a quality product or service, especially in the beginning.
Ask customers to opt into your marketing communications.
As you build your brand, ask your customers and potential customers for permission to communicate with them. The easiest way to do this is by using opt-in forms of consent. These forms allow you to contact them with further information about your business, according to Dan Edmonson, founder and CEO of Dronegenuity.
“These types of forms usually pertain to email communication and are often used in e-commerce to request permission to send newsletters, marketing material, product sales, etc. to customers,” Edmonson said. “Folks get so many throwaway emails and other messages these days that, by getting them to opt in to your services transparently, you begin to build trust with your customers.”
Opt-in forms are a great starting point for building trust and respect with potential customers. Even more importantly, these forms are required by law. The CAN-SPAM Act of 2003 sets requirements for commercial email by the Federal Trade Commission. This law doesn’t just apply to bulk email; it covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” Each email violating this law is subject to fines of more than $40,000 .
Tip: Create a strategic marketing campaign that combines various marketing channels, like a company website, social media, email newsletters and opt-in forms.
10. Grow your business.
Your launch and first sales are only the beginning of your task as an entrepreneur. To make a profit and stay afloat, you always need to be growing your business. That takes time and effort, but you’ll get out of your business what you put into it.
Collaborating with more established brands in your industry is a great way to achieve growth. Reach out to other companies and ask for some promotion in exchange for a free product sample or service. Partner with a charity organization, and volunteer some of your time or products to get your name out there.
While these tips will help launch your business and get you set to grow, there’s never a perfect plan. You want to ensure you prepare thoroughly for starting a business, but things will almost certainly go awry. To run a successful business, you must adapt to changing situations.
FAQs about starting a business
What are the four basics for starting a business.
The four basics for starting a business are your business name, business structure, business registration certificate and all your other licenses. You must take the proper legal and regulatory steps in each of these four areas before you launch your business. Obtaining external funding and putting together a business plan are also smart moves, but they aren’t legal prerequisites.
How can I start my own business with no money?
You can launch a successful business without any startup funds. Work on a business idea that builds on your skill set to offer something new and innovative to the market. While developing a new business, keep working in your current position to reduce the financial risk.
Once you’ve developed your business idea and are ready to start on a business plan, you’ll need to get creative with funding. You can raise money through investments by pitching your idea to financial backers. You could also gather funding through crowdsourcing platforms like Kickstarter, or set aside a certain amount of money from your weekly earnings to put toward a new business. Finally, you can seek loan options from banks and other financial institutions to get your company up and running.
Check out our list of low-cost business ideas for inspiration on how to start a new company when you’re on a tight budget.
What is the easiest business to start?
The easiest business to start is one that requires little to no financial investment upfront, and no extensive training to learn the business. A dropshipping company, for example, is one of the easiest types of new business to launch. Dropshipping requires no inventory management, which saves you the hassle of buying, storing and tracking stock.
Instead, another company fulfills your customer orders at your behest. This company manages the inventory, packages goods, and ships out your business orders. To start, create an online store by selecting curated products from the catalog available through partners.
Check out our list of businesses you can start quickly for ideas on how to launch your next business with ease.
Which types of businesses can I start from home?
In today’s world of remote work, you may be thinking of an online business idea . Any online-only business that doesn’t require inventory should be easy to start from home. Ideas that fall within this category include but aren’t limited to copywriting businesses, online tutoring operations and dropshipping businesses. Anything you’re good at or passionate about that you can do from home, and for which demand exists, can make for a great home business.
When is the best time to start a business?
Each person’s ideal timeline for starting a new business will be different. Start a business only when you have enough time to devote your attention to the launch. If you have a seasonal product or service, then you should start your business one quarter before your predicted busy time of the year. Spring and fall are popular times of year to launch for nonseasonal companies. Winter is the least popular launch season because many new owners prefer to have their LLC or corporation approved for a new fiscal year.
Max Freedman and Skye Schooley also contributed to this article. Source interviews were conducted for a previous version of this article.
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How To Start a Business in 11 Steps (2023)
- by Dayna Winter
- Dec 5, 2022
- 43 minute read
Being your own boss starts with the decision to make the big leap.
If you’ve found us here, you’ve already taken that crucial first step. Congratulations! Now you’re ready to learn how to start a business from scratch. But where do you begin?
Whether you already have a brilliant product idea or you’re just looking to build a future on your own terms, you’re in the right place. This guide will walk you through starting a business from pre-launch marketing to first sale.
Browse hundreds of business ideas. Explore helpful tools to manage your day to day when opening an online store . And bookmark this guide as a reference to return to as you build.
Let’s get started.
How to start a business in 11 steps
- Discover your big idea
- Research your product and audience
- Calculate your startup costs
- Source products
- Figure out your shipping strategy
- Develop a brand strategy and brand identity
- Build and launch your website
- Register your business
- Manage your money
- Market your business
- Grow your business
Ideate and validate
1. discover your big idea.
It all begins with an idea. To narrow in on that idea, it’s important to know what kind of business and lifestyle you want to have. Are you looking to sell existing products as a low-lift side gig? Do you want to go all in on an invention that will change the world? Or is your social media audience the perfect place to launch your personal brand’s merch?
If you’re stuck, start with our big lists of low investment business ideas , online business ideas , and popular business opportunities to get inspired. Next you’ll decide how to bring that new business idea to life: make, manufacture, or resell?
Developing your own product
You may decide to make a product with your own hands or develop one in partnership with a manufacturer, print-on-demand company, or private label partner.
🦘Want to sell something that’s ready to go? Jump to: Selling an existing product
Products to make or manufacture
Mine these lists of unique business ideas to discover items you can make or manufacture from scratch.
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🍝 Success Story: This 84-Year Old Grandma Taught Cooking Skills to the Masses
Nonna Nerina launched her virtual cooking experience when the pandemic all but ended tourism in her Italian village. Her granddaughter shares how Nonna runs a successful business selling a service online. 👉 Read Nonna's story
Print-on-demand ideas Print on demand is the process of working with a company to turn your designs into merchandise like t-shirts, jewelry, or mugs and shipping them directly to your customers. This is a quick and low investment way to start a business. Research print-on-demand companies to find the right fit for your business idea.
Private label (or white label) ideas
If you have a solid idea and no experience with manufacturing, private label or white label models allow you to work with an experienced manufacturer. They can customize generic products to your brand and specifications. There are a number of private label and white label product ideas to consider, from fitness equipment to cosmetics.
Selling an existing product
If you’re looking to get up and running quickly, selling an existing product is a great option. You can decide to dropship or curate and resell products from other brands.
Product ideas to dropship
Dropshipping is a business model that involves selling existing products on your own online store without handling inventory or shipping. An order from your customer will be fulfilled and shipped by the vendor or manufacturer, skipping you as a middleman. You can get started with dropshipping by finding a product and dropshipping partner.
💡 Tip: You can also dropship white label products, giving you the benefits of both a branded product and a low-lift business model.
Curation or resale ideas
Another way to start a business without your own products is through curation or resale. Some lifestyle and fashion brands will curate collections from a number of vendors or designers, buying inventory upfront. In this case, you will be responsible for inventory management and shipping. To find brands to work with, browse wholesale marketplaces . Resale business models are popular with antiques, collectibles, or vintage clothing .
Starting a side business
What if you just want to dip a toe into entrepreneurship? Starting a side hustle —that is, running your own business alongside your full-time job—is a low-risk way to test the waters and make supplementary income. Don’t quit your day job . Instead, browse our lists of passive income ideas and businesses that let you make money from home .
Building an audience can be one of the most challenging parts of starting a business. If you have already grown your fan base on social media channels, the hard part is already done! Online tools make it easier than ever to monetize that audience. Drill down to your platform of choice for creator-friendly business ideas.
- Instagram : Best Ways to Make Money on Instagram
- TikTok : Easy Ideas How to Make Money on TikTok
- YouTube : Make Money as a Full-Time YouTuber or Make Merch for YouTube
- Twitch : How to Make Money on Twitch: The Ultimate Guide
🌵 Success Story: TikTok’s Plant Mom Spun Online Virality Into a Brand
Get inspired by Sonja Detrinidad, a mortgage professional turned succulent influencer who monetized her audience to start her business, Partly Sunny Projects. She buys wholesale plants in her native California and ships across the US. 👉 Read Sonja’s story
💡 Tip: The Shopify Starter Plan is perfect for creators who want to get selling fast without building a website. Or, you can also use a tool like Linkpop to superpower your social bio and push fans to your store.
Superpowered social links
Linkpop is a tool that lets you create a customized landing page for all your brand links. It’s free, customizable, and best of all: shoppable.
Starting in a specific industry
If you’ve already honed in on a product of interest, it’s important to understand the nuances of that industry. If yours is below, click through to the corresponding guide to get tailored advice for how to start a business in your market of choice.
👗 Clothing: How to Start a Clothing Line 👕 T-shirts: How to Start a Successful T-Shirt Business Online 💍 Jewelry: Start a Jewelry Business: Step-by-Step Guide 🕯️ Candles: How to Start a Candle Business (with Examples) 🥝 Food and Drink: How to Sell Food Online (Step-by-Step Business Guide) 🙂 Stickers: How to Make and Sell Stickers Online 🛋️ Home: Sell Furniture and Home Décor Online: The Ultimate Guide 🌱 Plants: Fronds with Benefits: A Beginner’s Guide to Selling Plants Online 🎨 Art: How to Sell Art Online: A Complete Guide 📚 Books: Sell Books Online: Page-Turning Advice From the Pros 🐶 Pets: How to Start a Pet Business 🧴 Skin care: Start a Skin Care Line: Lessons From a Serial Beauty Entrepreneur
🦘 Ensure that you understand any legal constraints or requirements specific to your industry before going all in. Jump to: Operations
💄 Success Story: She Quit Her Wall Street “Dream Job” to Manufacture Lipstick
Melissa Butler started The Lip Bar by whipping up color formulations in her kitchen. The specific requirements of the cosmetics industry prompted her to work with a skilled manufacturer as the brand grew. 👉 Read Melissa’s story
🦘 Jump back to: Table of contents
2. Research your product and audience
Now that you have a killer idea, it’s time to validate it ! Your product or business idea may excite you, but it’s only worth pursuing if there’s an audience (a.k.a. future customers) looking for it.
There are many ways to do your research upfront before you start investing. You can look for gaps in the market, find an underserved audience, run a focus group, and investigate your competition.
Finding a target audience
Your target audience or target market refers to a group of potential customers for your brand. This is the group you’ll eventually aim all your marketing efforts and dollars toward. As a result, it’s critical to define them as thoroughly as possible.
Identifying and getting to know your target audience is important because:
✅ It helps you make smart and cost-effective marketing decisions ✅ It influences your product development (because you have a direct line of feedback) ✅ It can increase revenue (by focusing your efforts on the most promising customers)
Building buyer personas is an effective method for drilling down into your ideal customers’ needs. How old are they? What do they love? On which social media platforms do they spend most of their time? What’s important to them?
👩🏾🦱 Success Story: An Art Major Developed a Product to Fill a Market Gap
Yelitsa Jean-Charles was dissatisfied by the options for dolls with Black hair. So she designed her own. She built her successful business, Healthy Roots Dolls, to teach a generation to love their curls. 👉 Read Yelitsa’s story
Conducting market research
Market research is the process of gathering data about the potential customers (or “market”) for your brand. It can validate that you’re on the right track or inform you that you need to make a shift. You can conduct market research through surveys, focus groups, and interviews.
Market analysis is a similar concept but involves researching the industry as a whole, combining insights you get directly from your target audience with third-party sources like reports and industry publications.
🎧 PODCAST: Compound Studios Builds Brands For Unique Target Markets
Shane Vitaly says he ignores competition when conducting market research. For his multiple distinct brands, emerging trends are the key to defining the audience for each. 👉 Listen
Analyzing the competition
Understanding the competitive landscape can ensure that you’re setting your brand apart in the industry. This exercise will also help you clearly define your unique selling proposition (USP), which is the benefit that your product offers over that of your competitors. Explore the in-depth resources below to get started.
- How to Do a Competitive Analysis + Example Template
- How to Do a SWOT Analysis
- What Is Competitive Intelligence? Definition and Guide
👩🏻🎓 FREE COURSE: Building a Business for a Niche Market
In this 12-part course, host Vivian Kaye walks through the steps to launching a niche business, including how to define and target a niche audience for your brand.
3. Calculate your startup costs
Once you’ve validated that there’s an audience hungry for your product and you’ve nailed your value prop , it’s time to talk money. Your business will be viable if you have the funding to get it off the ground and you can identify a price that’ll turn a profit.
Writing a business plan
A business plan is a document you can use to help you secure funding from a bank or venture capital (VC) firm. But even if you’re not seeking outside funding, a business plan forces you to answer important questions about how you will run your business. It includes everything from your mission statement to your financials.
💡 7 business plan writing tips:
- Know your audience.
- Have a clear goal.
- Invest time in research.
- Keep it short and to the point.
- Keep the tone, style, and voice consistent.
- Use business plan software.
- Check out other business plan examples, like the ones here , to inspire your own.
Calculating startup costs
What does it really cost to start a business ? It depends on many factors, such as whether or not you carry inventory or you need to lease space. Much of the money spent in the first year consists of reinvesting profits back into the business, not spending out of pocket. This is called “bootstrapping” and you can learn more about it later in this section.
Accounting for all business costs
Your startup costs in the first year will help you cover everything from setting up a website to buying inventory to running your first paid ads. Here’s what business owners reported as the breakdown of their spending in the first year:
🚨 Tip: Don’t forget to consider unexpected costs like business insurance, taxes, legal fees, and shipping costs.
Conducting a break-even analysis
A break-even analysis is the process of determining at what point your business (or product) becomes profitable. It’s a financial calculation used to determine the number of products you need to sell to cover your production costs.
There are several benefits to conducting a break-even analysis:
✅ It helps you make smart decisions about product pricing. ✅ It can mitigate risk and eliminate surprise. ✅ It sets informed targets for your business. ✅ It can identify any missing expenses.
Determining profit margins
A profit margin is the measure of a business’ profitability expressed as a percentage. Your profit margin will depend on the industry you’re in, the retail price ranges set by the market, and your costs. You may have a lower profit margin if you’re selling a high volume of goods (say, selling digital art prints) or a high profit margin if you sell luxury products.
💵 FREE TOOL: Profit Margin Calculator
Determine selling prices for your products by entering your costs and markup. This handy tool will instantly calculate your retail price, profit amount, and profit margin.
Pricing your products
Knowing how to price your products can be tricky, but with a few basic calculations, you can confidently set prices that make sense. In a nutshell, there are three steps to setting prices:
- Add up your variable costs , or the costs that change depending on the amount of product you produce.
- Add a profit margin .
- Don’t forget about fixed costs , or the consistent costs to do business that aren’t affected by how much you produce (think office space lease or utilities).
As you’re setting your prices, consider common pricing strategies like competitive pricing, value-based pricing, or keystone pricing. Note: Each strategy has its pros and cons and not all will be right for your unique business.
Bootstrapping your business
Bootstrapping is the process of starting a business with little or no money and investing the profits back into the business as it grows. This method of funding a business may mean slower growth, but it also minimizes risk and debt.
💰 Success Story: How These Founders Turned $900 into an 8-Figure Brand
Skin care brand Bushbalm launched with a mere $900 investment from its three founders. They then funded their massive growth through crowdfunding and pitching investors. 👉 Find out how
Some businesses are easier to bootstrap than others. Low investment ideas like dropshipping or print on demand require no inventory and are great candidates for this method. Other small business owners use personal savings to cover startup costs before bootstrapping growth. It’s still important to have a solid business plan in case you decide to seek additional funding later.
🦘 Looking to grow more quickly? Jump to: Getting funded 2.0
Get access to the funds you need to grow
Skip the lengthy paper applications and get quick access to funding to help your business thrive. Access Shopify Capital from your dashboard in a few clicks.
Build your business
4. source products.
By now, you’ve validated your product idea, your business plan is locked, and you’re ready to bring it to life. It’s time to get creative. In this section we’ll take you through the options to make, manufacture, or source your product as you get ready to start a business.
Making or manufacturing a product
If your product is a handmade item, you can get up and running by setting up an appropriate space in your home, a rented studio or office, or a co-op. Be sure to check the legal requirements for setting up a home-based business, especially if you’re selling food or cosmetic items. There are generally rules around ventilation and other safety protocols.
🏭 Success Story: Making the Leap to Manufacturing
In this guide to starting a skin care line, Meghan Cox discusses the early days of starting her business, Amalie. While she launched on handmade formulations, she eventually made the move to manufacturing—and then opened her own lab. 👉 Read Meghan'’s story
🦘 Ensure that you understand any legal requirements for setting up a home-based business. Jump to: Operations
If your product is designed to be produced in a third-party facility, you’ll likely need to source a manufacturing partner . A good manufacturer is one who understands your industry, knows packaging and labeling laws specific to your product or market, and can be a true partner in your business.
Some manufacturers will be part of the product development process , advising you on best practices to get to your finished product.
In less than an hour, Jason Wong walks new business owners through the process of developing and manufacturing a product from finding a credible partner to managing shipping and logistics.
Finding a supplier
If you’ve opted to sell existing products, you’ll need to research suppliers or other brands that you can source them from. Find the business model that applies to you below and click through for a deep dive on how to find products for each, along with some examples:
- Dropshipping : Best Dropshipping Suppliers
- Print on demand : Best Print on Demand Companies and Sites
- Wholesale : How to Find the Right Wholesale Supplier for Your Business
🧾 FREE TOOL: Purchase Order Template
In 4 simple steps, complete your company and order information to automatically generate a professional purchase order that you can download and print.
5. Figure out your shipping strategy
Shipping is often cited by small business owners as one of the most challenging aspects of getting started. Luckily, the tools aimed at simplifying this task keep getting better. Ecommerce platforms like Shopify consolidate rates to help you make informed shipping decisions. And app integrations can solve specific shipping issues or help you more easily manage inventory.
Setting up shipping and fulfillment
When deciding on a shipping strategy for your business, you’ll first need to decide how you will handle order fulfillment . For many new business owners, that means personally packaging and shipping orders one by one. Unless you choose a dropshipping or print-on-demand model, managing your own fulfillment in the early days helps you better understand all aspects of your business.
As you grow, you may decide to outsource shipping and fulfillment to a third-party logistics (3PL) company. Research different fulfillment services to see which is right for your growing business.
Shipping cost is often a factor in a customer’s decision to buy from your business. You can decide to offer free shipping and build that cost into retail prices or, if you’re passing on the cost, take steps to keep those costs as low as possible.
Ways to reduce shipping costs include:
✅ Reducing weight of packages (by, say, using poly mailers instead of cardboard, if applicable) ✅ Choosing the right-sized packaging for the product ✅ Using flat-rate shipping when possible ✅ Using Shopify Shipping to cut carrier costs ✅ Knowing when rates change so you can adjust accordingly ✅ Offering local delivery or pickup as an alternative for in-town customers
💡 Tip: Take advantage of free tools and templates to create a shipping policy , generate shipping labels , and complete a bill of lading form.
🍕 Success Story: How Pizza Pilgrims Pivoted to Sending Pies by Mail
In this episode of Shopify Masters , founders Thom and James Elliot explain how they pivoted during the pandemic. Through trial and error (and “exploding dough”), the two developed a shipping strategy to suit their new pizza kit offerings. 👉 Read their story
Understanding international shipping
If you plan to ship internationally , keep in mind that there are a few more steps involved. First, be sure that your products are legal in their country of destination, that you adhere to labeling and packaging requirements in those places, and that you know how to complete customs paperwork.
Duties and taxes are often the responsibility of the customer upon the arrival of the package. You can elect to make those fees transparent at checkout by collecting them upfront.
Managing inventory
If you’re working with a fulfillment service, or using a dropshipping or print-on-demand model, inventory management is usually handled entirely by this partner. Otherwise, keeping inventory organized ensures that you can make informed decisions about production and stock reorders—and avoid customer disappointment.
Here are a few top-rated inventory apps in the Shopify App Store . These apps integrate with your ecommerce store to automate tasks and send low-stock notifications.
👀 Forecasting: CartBite ⏩ Optimization: Realtime Stock Sync & Bundling ✉️ Tracking: Notify Me! Back in Stock Alert 🤝 Syncing: Stock Sync 🚰 Replenishment: SUPLIFUL 🔔 Stock alerts: Back in Stock - Out of Stock
Find your community
Access a network of over 900,000 business owners through Shopify Community. Make connections, share learnings, and engage in meaningful conversations.
6. Develop a brand strategy and brand identity
Aside from a unique product or exemplary service, your brand is the driving force behind a customer’s decision to buy from you. Your brand is more than a business name or a logo. It is a guiding set of principles and design specifications that tell your story, create consistency, and build trust. A branding exercise will create the foundation upon which you make creative decisions for your brand as you grow.
As you build your brand , be sure to consider all its components:
✅ The basics (who you are and what you sell) ✅ What you stand for (mission statement, brand values, and brand promise) ✅ Your unique selling proposition (why customers should choose you over the competition) ✅ Your brand story (sometimes one and the same with your personal story) ✅ Brand voice (the tone and language used consistently in brand communication) ✅ Your visual brand identity (logo, style guide, and brand name)
To develop your brand strategy , answer questions like: How do you want customers to feel when they interact with your brand? What’s important to you (such as giving back, excellent customer service, fair wages for staff)? What colors and design styles appeal to you and represent the mood you’re trying to achieve? The answers to these will help inform the rest of the branding exercise.
Next, brainstorm business names and domain names . It’s important that you research any potential business name to see if it is already used (and therefore could cause confusion or legal issues) and if the social handles and domain are available. Once you’ve landed on a name, secure it by setting up social profiles and registering the domain .
💡 Tip: If you’re stuck coming up with a name to represent your brand, try these free business name generator and domain name generator tools.
🎧 PODCAST: How Headphones.com Secured a Priceless Domain
Andrew Lissimore started his headphones business after seeing the impressive profit margins in consumer electronics. He negotiated a deal to secure a domain name that would help his business get discovered. 👉 Listen
Establishing brand voice and story
Brand voice is how your business speaks to customers and the world. It incorporates decisions around tone, personality, brand vocabulary, and slang. Defining your distinct brand voice is important as it can:
✨ Spark recognition 👓 Influence perception 🤝 Build trust 🔌 Create connection 👨🏽🤝👨🏻 Ensure consistency (no matter who’s writing brand copy)
Create and maintain a style guide, a document that sets out clear dos and don’ts for your brand voice (as well as your visual brand requirements—more on those below). For example: “Our brand voice is confident. Our brand voice is not condescending.” This will ensure that as you hire for or outsource marketing tasks, your brand voice will remain consistent.
🍊 Success Story: This Skin Care Founder Blended Her Personal Story with Her Brand
In this guide to brand storytelling, founder Charlotte Cho explains how her personal story and that of her culture were critical to building two skin care brands. As a popular beauty blogger first, she was able to build credibility when she eventually launched. Read more
💡 Tip: Your brand voice will inform brand storytelling on your About page as well as other copywriting throughout your website and marketing.
Designing a visual identity
Your visual identity encompasses anything that impacts how your customers, and the general public, see your brand out in the world. This includes your logo, fonts you use on your website, photography, and color choices.
These design decisions and assets will all be captured within your brand guidelines or style guide. If you’re not a designer, it’s still possible to DIY your visual brand and design a logo with some free tools and a few tips from the pros:
✅ Keep it simple. A simple logo will be the most versatile, allowing it to work on everything from a website favicon to a billboard ad. ✅ Create variations. Variations—like a wordmark as well as an icon—will help your logo fit into different applications. ✅ Consider context. If using recognizable symbols or objects in your logos, consider what message those symbols mean in various contexts and cultures.
DIY your brand identity
Hatchful is a free and easy-to-use tool for business owners. No skills are required to produce unique logos from a range of beautiful templates.
💡 Tip: If you’re struggling to DIY your visual identity, tap into Shopify Experts . These are vetted professionals who can help you build out brand elements like logos, color schemes, and social templates.
Bringing your brand to life
As part of branding design , you will make decisions about assets like photography, printed materials, and packaging. This will ensure a consistent experience across every customer touchpoint.
Shooting product photos
Photography is incredibly important for ecommerce brands that rely on 2D images to tell a story about a 3D product. Photography does a lot of heavy lifting as a stand-in for feeling or trying on the product in person. That’s why good ecommerce photography can increase buyer confidence—and conversion.
Most business benefit from having two types of photos for their collections:
- Product photos: These are generally detailed clear shots of the product itself, sometimes on a model, but almost always uncluttered and shot against a plain background. These are well-suited toward product and collection pages.
- Lifestyle photos: These are more aspirational shots that show your product in the context of an environment or action. They tell a story and inspire customers with ways to use or style a product within their own lives. These shots are useful for your home page, social media accounts, and digital lookbooks .
Using examples from Burst , a free stock photo resource for entrepreneurs, you can see the difference between the first product photo and the second lifestyle photo:
If you decide to go the DIY photography route due to budget constraints, you can still pull off professional looking photos with little more than a simple lighting kit and a smartphone .
📚 Read : DIY Guide to the Perfect Product Photography Setup
Your DIY photos may need a little editing to get them website-ready. You can access free and inexpensive design and photo editing tools online. 🛠️ Try : Shopify Image Resizer to optimize your product photos for the web.
In a pinch, stock photos are an excellent solution to fill in for photo needs until you can schedule a shoot. You can mine stock photo websites to find images that capture the lifestyle of your brand to use on collection pages, your homepage, or in marketing campaigns.
Designing product packaging
Your visual brand identity will also show up on product packaging, shipping materials, and other printed marketing assets (like packaging inserts). Customers should have a seamless experience from the initial interaction with your brand online to receiving their order.
🧁 Success Story: Why Getting Packaging Right Was Important to this Brand
The founder couple behind Pastreez moved to the US to share their love of traditional French sweets with a new market. They faced a challenge: packaging that would protect delicate confections in the mail but also represent their brand and be special enough to give as a gift. 👉 Read their story
💝 Browse these resources to help you design and choose the right packaging for your business:
- Ecommerce Product Packaging Guide & Tips for Memorable Unboxing Experiences
- 8 Eco-Friendly Packaging Ideas for Your Store
- Packaging Inserts Ideas: 7 Ways to Increase Customer Loyalty
🦘 Jump back to: Table of contents
7. Build and launch your website
At this stage, you’ve secured a product and committed to your brand. Now, it’s time to assemble all that hard work into a website and introduce it to the world. There are several ecommerce website builders on the market and you will need to weigh the options based on factors like available features, website cost , and ease of use.
🧰 Build a website in minutes
Easily create a stunning website packed with features and available integrations. Drag and drop sections to customize your site with no coding skills necessary.
Designing and building an ecommerce website
Once you’ve chosen a platform, you can build your website by uploading products and other brand assets. Consider browsing the Shopify App Store for apps to help you improve the functionality of your store. There are many free Shopify apps that can do everything from taking appointment bookings to automating the returns process.
Now, the fun part! Designing a professional looking website is simple, even if you have no design skills. That’s because there are several tools and templates that let you drag and drop design elements, with no code necessary.
Let’s start with themes. The Shopify Themes Store has over 100 themes to choose from—something for every taste and industry. For new business owners on a small budget, there are also several free Shopify themes .
💡 Tip: Unsure which theme is right for your business? Take our quiz .
Using your brand guidelines, you can:
🎨 Customize themes with your chosen fonts and colors 🎨 Rearrange the layout of your homepage to prioritize what’s important 🎨 Upload product and lifestyle images in web-optimized sizes 🎨 Add content to your About Us page , product pages , and landing pages
Stunning themes for every business
Choose from over 100 themes that can be customized to blend seamlessly with your brand.
🆘 Need help? Check out free online courses to design a website with zero experience or tap into the Shopify Experts network to hire a pro.
Launching your business
You did it! While there are still a few steps left to get your business fully up and running, you’re at a place where you can soft launch your website to the world. This is a critical phase in your journey where you can stress test your website, gather customer feedback, and tweak before your big grand opening .
🛑 Before you launch your website, have you thought of everything? Bookmark this 14-point ecommerce checklist to be sure you’ve checked all the boxes.
8. Register your business
Depending on the countries or regions where you do business, you may be subject to a set of rules that govern how you manufacture, market, and ship your products.
First, you’ll need to decide on a business structure. In some cases, you will need to officially register your business. Check with your local government agency to ensure you’re doing business above board.
Deciding on a business structure
There are several types of business structures (or legal structures or business entities) to consider, but before you land on one, it’s important to understand the characteristics of each. For example, do you know the difference between a limited liability company (LLC) and a soleproprietorship ? Is a C corp right for you?
Dive into the below resources to learn more:
- LLC : How to Start Limited Liability Company
- Sole proprietorship : A Guide to the Sole Proprietor Business Structure
- C Corporation : How to Form and Operate a C Corp
- B Corporation : How to Apply for B Corp Certification
- S Corporation : What is an S Corp? Learn the Benefits
- LLP : Limited Liability Partnerships: 4 Benefits
- DBA : What is Doing Business As? Definition and Guide
Registering a business
In some cases, you may not need to officially register your business to get up and running. For example, in Canada, small businesses making under a certain threshold in revenue are not required to officially register or collect and submit sales tax. However, there are perks to registering your business upfront, such as benefitting from certain protections.
In the US, the requirements to get a business license can vary state to state, and in some cases you may not need one. If you do need a business license, be sure you have the following before starting your application:
✅ Owner name and contact information ✅ Business name and contact information ✅ Your employer identification number (EIN) or equivalent ✅ Any required permits ✅ Any required forms or paperwork ✅ Associated fees with filing this paperwork
Securing business insurance
It’s important to protect yourself, your business, and your employees in the event of unexpected hardship. Consider all the possible scenarios that could grind your business to a halt, including: natural disasters, health issues among staff, a bad batch of product, or even a lawsuit.
There are several types of business insurance to consider. These include: commercial property insurance, workers’ comp insurance , professional liability insurance , product liability insurance , and business interruption insurance, to name a few. Understand the features of each to see if they apply to you—you may also be interested in a business owner’s policy (BOP) , which bundles many of the above types of coverage together.
🛑 Note: Depending on the business structure, you may or may not be subject to personal liability in legal matters pertaining to your business. Talk to a pro to see if personal liability protection is necessary for you.
🍭 Success Story: How an Indie Brand Fought For Its Intellectual Property
Illustrator Tuesday Bassen was shocked to discover a large fashion chain was stealing her designs. That’s when the artist sought legal advice to take action against the brand—and protect herself going forward. 👉 Read Tuesday’s story
You may also want to implement other types of protections as you grow:
- Offering employee health insurance alongside fair and competitive wages is a great way to attract and retain talent.
- Registering a trademark or filing for a patent can legally protect your intellectual property, like an invention or your business name.
- Writing and posting a set of terms and conditions that protect your company by outlining to customers what is legally required of them if they use your service.
💡 Tip: An insurance adviser or lawyer can help you sort which types of business insurance are right for your business.
9. Manage your money
The key to a successful business can usually boil down to finding the right product for the right market at the right time. But sustaining that success depends on many other things happening behind the scenes. When you have a good handle on your finances, you’re ensuring that you’re not overspending and that you have a safety net if your luck changes.
Opening a business bank account
Setting up a business bank account is an important first step. At the very least, it allows you to separate your personal and business finances . At best, it allows you to build a good relationship with your bank as a partner in your long-term financial success.
Skip the bank
Get paid faster by managing your money and business in one place with a free Shopify Balance account.
Explore the various business banking products (like a business credit card) available on the market to determine which suits your needs. When choosing the right bank for your business , ask questions like:
💰 Is the bank small-business-friendly? 💰 What is the reputation of the bank in the market? 💰 Does it offer solutions and financial advice tailored to your industry? 💰 What is the fee structure offered by the bank? 💰 Does the bank have a hassle-free loan process?
Managing your finances
Your business plan (that handy document you created in Step 2) should also include a financial plan. If you’ve already completed this step, it’s time to put it into action. If not, consult the resources below to get started.
👩🏻🎓 FREE COURSE: How to Create a Solid Financial Plan
A financial plan gives you the power to better manage your business, project expenses, and even apply for financing in the future. This course walks you through the basics from balance sheets to income statements.
Business finance glossary
You’ll possibly encounter some new terms as you make sense of your business finances. Here are a few financial statements and concepts explained.
Balance sheets
A balance sheet lists your business’s assets, liabilities, and shareholder equity. Balance sheets offer a quick glance at how much your business is worth after all liabilities or debts and shareholder payouts are accounted for.
Income statements
An income statement (or earnings statement or profit and loss) calculates revenue minus expenses to tell you how much money your business is earning. These are usually prepared monthly, quarterly, or annually, depending on your business.
Cash flow statements
Choosing small business accounting software
Many business owners swear by a simple spreadsheet to manage their small business accounting , and this method is perfectly fine for most small businesses just starting out. If you want more functionality and automation, or you have a more complex business structure, there are several small business accounting tools on the market.
💡 Tip: A professional accountant can help you navigate the ins and outs of business accounting, including advising you on accounting software and preparing you for tax time.
Paying business tax
Being ready for tax time means managing your finances all year long, not scrambling at the last minute. That’s because if your business owes taxes, you don’t want any surprises. Be sure you understand the business tax deadlines and the types of taxes you’re on the hook for, depending on your business structure.
Remember that you can offset many types of purchases as tax deductions as a small business owner. This is a non-exhaustive list of those items:
- Shipping costs
- Workspace rent and utility costs
- Fees for professional services (like accountants)
- Website fees
- Travel expenses
Check with your accountant before writing off any expense—rules around what qualifies as a business expense vary by industry and country.
Charging tax
Should your business be charging sales tax for online purchases? The answer isn’t that simple. This will depend on a number of factors including where you’re running your business, where your customer is located, the type of goods you sell (some products are non-taxable), and how much revenue you bring in.
Once you’ve determined that you should be charging sales tax, you’ll need to apply for a sales tax permit (or tax number or EIN), set tax rates in your online store, collect taxes from eligible purchases, and remit those taxes at tax time.
💡 Tip: Set collected taxes aside in a separate business bank account so that they remain untouched until tax time and do not get lumped in with earnings.
Market and grow
10. market your business.
Marketing is reported as one of the most challenging aspects of running your own business—but it’s also the area where you will spend much of your time and budget. Launching a successful website requires ongoing campaigns to actively drive traffic to it and convert those visitors into buyers.
Creating a marketing plan
Along with your financial plan, your business plan should also include your overall marketing plan . A marketing plan is the strategy your business uses to get products in front of your target audience. It's a roadmap that helps you set goals and have a back-up plan.
💡 Tip: If you’re stuck staring at a blank page, browse examples of marketing plans and best practice ideas for increasing traffic to get you inspired.
Now, let’s dive into each type of marketing tactic and channel and get ready to make your first sale !
Investing in organic marketing
Organic marketing refers to marketing efforts that don’t cost anything. With changing social media algorithms and more competition, organic traffic becomes increasingly harder to get. But there are still clever ways to attract customers on a small budget.
A few ideas include:
- Taking pre-orders
- Running giveaways to incentivize actions like social sharing or following
- Offering discount codes and coupons
- Hosting grand opening events to draw people to your brick-and-mortar location
- Doing content marketing (like creating blogs or videos)
- Understanding search engine optimization
- Offering affiliate programs
- Proactively engaging in social communities
- Even more low-cost and free ways to promote your business
We’ll take a closer look at many of these ideas in upcoming sections.
🦠 Success Story: How This Brand Used Pre-Orders to Launch Their Business
The founders of portable hand sanitizer brand Sanikind launched in the wake of the pandemic, using pre-orders and crowdfunding to drum up excitement for their new business idea. 👉 Read their story
Exploring marketing channels
There are several channels you can use to market a product . But which is right for you? The best place to start is often the channel where you already feel most comfortable or the place where you know that most of your target audience is already spending time. Test each to see which gives you the best return on your efforts and spend.
Learn more about marketing channels below.
Email marketing can be a successful tool to convert leads to customers, encourage repeat business, and incentivize loyal customers to buy more. This is a cost-effective marketing tool, but it does require higher effort than some paid channels. Growing your email list and producing engaging content at the right cadence are the keys to winning at email marketing .
🔎 Explore more:
- Amazing Abandoned Cart Emails Tips
- Email Marketing Examples: Campaigns to Inspire You
- Awesome Welcome Email Examples that Work
👩🏻🎓 FREE COURSE: Ecommerce Email Marketing 101
In this course, led by host Drew Sanocki, you’ll learn how to build an engaged email list and automate your email marketing campaigns for maximum impact on your bottom line.
Google offers up a goldmine of potential customers searching for the very thing you’re offering. But to be sure that they’re finding you, you’ll need to show up in search results. This can be achieved in a number of ways, including search engine optimization (SEO) and paid Google Ads ( search engine marketing ).
SEO is an organic marketing tactic that involves improving your website to rank higher in search engines. By sending signals to Google that your site offers value and matches the search intent of a user, it is more likely to appear higher in ranking.
- Ecommerce SEO: The Ultimate Beginner’s Guide
- The 18 Types of Google Ads and When to Use Them
- Beginner’s Guide to Google Shopping Ads
Instagram is a visual social media channel that can be an effective marketing tool for certain brands. Whether you run Instagram Ads to get your product in front of potential customers, organically grow your audience with engaging content, or use it as a sales channel, it’s a platform worth exploring.
- A Beginner’s Guide to Instagram Marketing
- Top Instagram Hashtags to Get More Likes
- How to Get More Followers on Instagram
- Instagram Bio Ideas (with Examples)
💡 Did you know? You can sell directly to your audience using Instagram Shopping . Also check out LinkPop and the Shopify Starter Plan to get even more out of Instagram.
Facebook is still the largest social media platform in the world, with 2.9 billion users. And it’s an effective tool for many businesses that use it to engage with their community, run paid Facebook ads , and sell products directly.
7 tips to success with Facebook marketing:
✅ Understand your target audience. ✅ Diversify your content formats. ✅ Post when your audience is active. ✅ Share influencer or user-generated content. ✅ Encourage reviews. ✅ Get involved with Facebook groups. ✅ Track Facebook insights.
- Facebook Marketing: Step by Step Guide for Your Business
- Facebook Ad Sizes and Specs + Free Resizing Tool
- How Much Do Facebook Ads Cost?
- Facebook Ad Targeting Tips
💡 Did you know? You can sell your products on Facebook for a seamless experience for your social audience. Also explore Shopify Apps to use Facebook Messenger and keep the conversation going with customers post-purchase.
As a newer platform on the market, there’s still opportunity to win with organic marketing on TikTok . Finding success on the platform means paying attention to trends and serving up catchy content that’s relevant to your target audience.
🔥 5 TikTok marketing tips:
- Create value with your content (what does your audience want?).
- Be relevant and relatable.
- Aim for substance over polish (production value isn’t important here).
- Don’t sell to people, move them.
- Engage in the TikTok community.
🧪 PODCAST: How a Slime Business Found Success on Social
Angelina Ly was 14 when she saw slime take off among her peers. She started making her own, and in the five years since, expanded Firefly Slime into an empire. She found success in building communities on platforms like TikTok and Instagram, where she tailors content to each channel and audience. Hear Angelina’s story
- A Step-By-Step Guide to Advertising on TikTok
- How to Find Trending Sounds on TikTok
- What’s the Best Time to Post on TikTok?k
Other channels
There are many other platforms out there that might be perfect marketing channels for your business. Twitch, popular with gamers, might be the right place to find customers for your electronic business. And Pinterest, a go-to channel for DIY and style content, could be an effective place to market your home décor brand.
Browse through the following resources to help you market your product on each channel:
- Twitter: Twitter Marketing: A Beginner’s Guide
- YouTube: YouTube Ads for Beginners and Your YouTube Marketing Starter Guide
- Reddit: How to Use Reddit for Business
- Snapchat: How to Advertise on Snapchat Ads
- Pinterest: The Beginner’s Guide to Pinterest Ads
- Twitch: How to Make Money on Twitch
- WeChat: How to Sell on WeChat: Everything You Need to Know
💡 Tip: On whatever marketing channel you choose, you’ll want a strong call to action (CTA). This may be asking your audience to shop directly through the platform or to visit your website. Learn how to make the most of your link in bio to achieve your goals.
Building a content strategy
Whether it lives on your site as an SEO strategy or on another platform like YouTube, content marketing is a great way to grow traffic, build authority in your industry, and offer value to your customers.
🗒️ Content marketing formats include:
- Blogs and written content
- Virtual courses and tutorials
- Social media content
- Infographics
- Visual content
- PDF and digital downloads (templates, recipes, guides, free fonts)
Content that lives on your site can be used to increase traffic (using SEO) or it can be “gated” to help you build your email list. Free content, like short tutorials or recipes, can give your potential customers a taste of your offering and make them feel confident about purchasing paid content like a cookbook or full-length course.
Potential customers can also find your business organically through other platforms like YouTube. Offering relevant content on YouTube is another way to show up in search results and build a community.
- Brand Ecommerce Blog Examples for Better Content Marketing
- Video Marketing Guide: How to Build a Video Marketing Strategy
- The Best Free Video Editing Software Programs
- The Best Paid and Free Content Creation Tools for Online Businesses
- Cash In on Your Expertise: Create an Online Course That Sells
🍜 Success Story: How a Vegan Chef Built a Business on YouTube
Wil Yeung dabbled in everything from dropshipping violins to developing his own consumer goods. The serial entrepreneur and self-taught chef built his latest business with a YouTube content strategy. He now sells his recipes as books, ebooks, and online courses. 👉 Read Wil's story
Understanding conversion rate optimization
Conversion rate optimization (CRO) is a set of marketing tactics for increasing conversion (the percentage of your traffic that makes a purchase) on your website. Through design choices, efficiency improvements, and testing, effective CRO can encourage more visitors to take action.
Ways to improve conversion rate on your site include:
✅ Simplifying the user experience ✅ Adding testimonials ✅ Using high-quality images ✅ Optimizing thank you email messages ✅ Offering free shipping ✅ Optimizing page load times
- Traffic But No sales? Diagnose and Improve Your Store
- A/B Testing: The Complete Guide with Expert Tips
- CRO and Growth: Top Conversion Rate Optimization Tips From 19 Experts
Setting up marketing analytics
Running ads without understanding ecommerce metrics likely means you’ll be wasting money and time. Take the time to learn analytics tools and get to know the terms. This will give you an accurate picture of your marketing spend and performance so you can double down on what works and stop what doesn’t.
Social platforms often have native analytics dashboards to help you track the effectiveness of content and campaigns. You can find marketing analytics for your website on your ecommerce platform’s built-in reports or through a tool like Google Analytics .
- How to Calculate and Increase Customer Lifetime Value (LTV)
- What is Customer Acquisition Cost (CAC)? Calculate and Reduce It
- Five Ways to Grow the Average Order Value (AOV) of Your Online Store
Building a community
Community is key for brands catering to niche markets. Both winning the hearts and trust of well-established communities and creating a new one of your own takes consistency, authenticity, and a personal touch.
Whether your target audience is breast cancer survivors , Indigenous communities , or drag queens, it’s important to understand the community you’re serving. Listen, engage, and ask for feedback as you grow.
Many new brands opt to build businesses that serve the communities they’re already part of. This way, they have a deep understanding of their customers’ needs and gaps in the market. If you’re not part of the community you hope to target, ask yourself if you’re the best person to build for that group.
🍬 Success Story: Community is Central to This Marshmallow Brand’s Growth
When the founders of XO Marshmallow moved their business from farmers markets to their online store, they brought their in-person touch with them. Their robust social communities help them gain valuable feedback and win new business through positive word of mouth. 👉 Read their story
Once you’ve built a community, it’s important to nurture it. Community management involves growing your relationship with your audience in public spaces. Effective community management has four parts:
👀 Monitoring: tracking conversations that relate to your brand 💬 Engaging: proactively engaging with customers, leads, and influencers 🚔 Moderating: removing comments and conversations that don’t add value or violate the terms of your brand or the platform 📐 Measuring: analyzing how your brand is perceived and getting real, unfiltered feedback
Customer service for marketing
While customer service will be part of your ongoing day-to-day operations to help keep customers happy, consider it a marketing tool, too. Great customer service inspires word-of-mouth referrals —people want to share positive experiences. You can also modify your typical customer service communications to inform customers about upcoming promotions or new product launches and drive future sales in the process.
11. Grow Your Business
By now, your small business should be a well-oiled machine. Your product photos are on point, you’re building online communities, you’ve nailed your fulfillment process, and you’re hopefully making regular sales.
Take a moment to celebrate your wins! If you’ve made it this far, you’ve successfully turned a kernel of an idea into a living, breathing small business. So what’s next? You may decide to stay small, dedicating yourself to building relationships with a loyal customer base and managing everything solo. Or, maybe you’re ready for the moon.
Here, we touch on the next steps for your growing business, from seeking additional funding to hiring and managing staff.
Getting funded 2.0
You may have started your business with a personal investment and bootstrapping, but if your plans are bigger, you might need to seek business funding. Additional funding can help you open a brick-and-mortar business, hire employees, or develop new products.
Before you get started there are a few items to get in order:
✅ Update your business plan with your vision for growth ✅ Gather your financial statements ✅ Write and practice your elevator pitch ✅ Find a business mentor to help you prepare to pitch and polish your business plan
There are a number of sources for funding your business growth, including:
Business loans
Small business loans can be acquired from a number of sources, including major banks, credit unions, and alternative lenders. It’s important to review the options available from each to decide which type of loan best suits your business. A financial adviser can help you make an informed decision.
💵 FREE TOOL: Business Loan Calculator
Use this tool to calculate how much your loan will cost including total interest and monthly payments, and the length of time it will take to pay it back.
Business grants
Small business grants are offered by many types of organizations. These organizations are looking to offer grants to small businesses that embody their organization’s purpose and add value to a particular community. With that in mind, the criteria for each grant varies widely.
Small business grants are not loans and you don’t have to pay back the money you’re granted. However, there may be some non-monetary expectations that you are required to meet.
Crowdfunding
Crowdfunding involves running a private campaign, usually through a crowdfunding provider, to raise money for your business in advance of its launch, a growth milestone, or a new product. These funds come from the general population. They do not need to be paid back, but brands often offer incentives like products, membership, or swag.
Growing your team
To meet your long-term business growth goals, you’ll likely not be able to wear every hat forever. As you grow, focus on the aspects of running the business that you like the most and the ones that best suit your skillset. For the rest: delegate. There are three main ways to get some tasks off your plate.
Initially, you can use bot apps to automate your processes . These apps can do everything from send customer communication to generate financial reports, freeing you up to do more.
But soon, you’ll likely need human help, especially if you need to offload manual tasks or hire employees for customer service. If your brand guidelines didn’t include any philosophy around hiring, it still serves as a great jumping off point to hone in on what qualities you’re looking for in new hires.
If you’re not ready to set up payroll or manage employees, outsourcing is another way to increase your humanpower without cloning yourself. Freelancers, virtual assistants , and contract employees are all options for growing businesses.
Selling in international markets
Another way to grow your brand is to expand into other markets. That might be finding new audiences within your existing sales markets or selling across borders. Before diving head first into global ecommerce , be sure to do your homework. Each country will have a specific set of regulations. Seek the advice of a lawyer before you sell in or open locations or warehouses abroad.
Level up with Shopify Plus
Ready to take your business to the next level? Flexible and fast to launch, Shopify Plus is a cost-effective enterprise platform that’s built for change.
Start a business, design a life
You did it! You’ve achieved boss status and you’re already on your way to your next big goal. Along the way, you’ve gathered knowledge and learned from mistakes to help your business be the best it can be. The most exciting part? You’ve built a lifestyle around your passion. Enjoy the ride and remember: take care of yourself along the way.
How to start a business FAQ
Can you start a business with no money.
Yes, you can start a business with no money! A low-investment side gig such as a dropshipping store or a print on demand business is an easy way to get started while you’re still working. You can fund that business by bootstrapping as you grow or consider a small business loan or crowdfunding campaign. Tap into a skillset you already have and take advantage of free tools.
How can I start my own small business?
You can start your own small business in a few steps:
When should you start a business?
There’s never a “right” time to start a business. You should start a business when you have the time, attention, and funds to commit to it. Starting a business while you’re still working is a low-risk way to test the waters before making the leap to full-time entrepreneurship.
What are the most successful small businesses?
The most successful small businesses are those that match the right product with the right customer at the right time. They are run by founders who understand their market and have built a compelling brand to suit it. You can find success in any industry with any business model provided you do the work to assess your idea's viability. Determine what “success” means to you before you set out and map your business plan to that goal.
How can I start a business in my state?
You can start a business in any US state. Refer to our extended guides for information specific to your region:
- Connecticut
- Massachusetts
- New Hampshire
- North Carolina
- North Dakota
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
How do I start a limited liability company (LLC) in my state?
You can start an LLC in any US state, but pay attention to the legal requirements unique to each region. Refer to these handy guides to get started:
- Alabama LLC
- Arizona LLC
- Arkansas LLC
- California LLC
- Colorado LLC
- Connecticut LLC
- Delaware LLC
- Florida LLC
- Georgia LLC
- Illinois LLC
- Indiana LLC
- Kentucky LLC
- Louisiana LLC
- Maryland LLC
- Massachusetts LLC
- Michigan LLC
- Minnesota LLC
- Mississippi LLC
- Missouri LLC
- Montana LLC
- New Jersey LLC
- New Mexico LLC
- New York LLC
- North Carolina LLC
- Oklahoma LLC
- Pennsylvania LLC
- Rhode Island LLC
- South Carolina LLC
- Tennessee LLC
- Virginia LLC
- Wisconsin LLC
- Wyoming LLC
Feature illustration by Isabella Fassler Additional research by Wesley Ng and Leah Mennies
About the author
Dayna Winter
Dayna Winter is a Lead Writer at Shopify, telling stories about the humans behind brands and the moments that motivate them to create. On the side, she resells vintage, runs a film-themed vacation rental, and is working on her green thumb.
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- Business Strategy
- How to Start a Business in 10 Easy Steps
- Expansion Strategy for Startups
How to Start a Business From Scratch
How to start a business in 7 easy steps, 1. start with a good business idea.
- Business consulting
- Cleaning services
- Tax preparation and bookkeeping
- Event planning
- Jewelry making
- Copywriting services
- Personal training
- Music lessons
- Computer training
- Graphic design
- Landscaping
- Financial planning
- Photography
2. Conduct Research About Your Business Idea
- Understand your customers’ needs
- Identify potential problems with your product or service
- Lessen financial losses by helping you make more informed decisions
- Find niche markets you may not have known about
- Set goals that can guide your business
3. Write a Business Plan
- Title page and contents: Investors use your business plan to get a feel for your company. That’s why keeping it organized and easy to navigate is helpful.
- Statement of purpose : This summarizes your products, market and business operation. It also states if you’re looking for funding or not.
- Product descriptions : Explain each detail of your product or services and how they benefit your customers.
- Market analysis: Outline your target demographic, selling trends and customer expectations.
- Competitor analysis: This should highlight strengths and weaknesses of companies that have similar products or services.
- Finding potential weaknesses
- Communicating your ideas to stakeholders
- Organizing important information about your business
- Hiring employees that are right for your company
4. Make Your New Business Official
- Register your business with your state: This gives you legal grounds to move forward using your brand’s name.
- Pick-up the right licenses and permits: Depending on your business, this can include food, liquor, health or business licenses.
- Get a tax ID number: This allows the IRS to track your transactions. You’ll also need this to open a bank account.
5. Know Your Finances
- Asking your friends and family for extra money
- Getting a small business loan
- Looking for grants or local funding
- Encouraging angel investors to back your company
- Freelance writing
- Dog walking
- Book keeping
- Interior design
6. Protect Your Business
- General liability insurance to help protect your company from liability claims alleging bodily injury, property damage, libel or slander.
- Business income insurance for help replacing lost income if you have to temporarily close your operation due to fire, theft or wind damage.
- Data breach coverage which helps pay costs if your customers, patients or employees private data is lost or stolen.
- Professional liability coverage for protection if you’re sued for negligence or errors in the services you provide.
- Commercial property insurance which helps pay for damages to your building, equipment, inventory, furniture and fixtures.
7. Build Your Business
How to start a startup.
- Make a business plan
- Secure funding
- Surround yourself with the right people
- Follow the right legal procedures
- Establish a location
- Develop a marketing plan
- Build your customer base
- Plan to change
Lean Startup Methodology
Early stage startup.
Need Business Insurance?
Explore all expansion topics for startup business.
5 People You Must Have on Your Startup Team Setting Up an Office Should You Start a Business in Retirement? Are You Thinking of Buying a Franchise? How to Start a Business From Scratch
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So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .
How to Start a Business in 15 Steps
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .
1. Find the right opportunity
2. write a business plan, 3. choose a business structure, 4. get a federal tax id, 5. apply for licenses and permits, 6. open a business bank account, 7. understand your startup financing options, 8. get a business credit card, 9. choose the right accounting software, 10. prepare to pay your taxes, 11. protect yourself with business insurance, 12. establish your online presence, 13. figure out how you’ll accept credit card payments, 14. learn how to hire employees, 15. get financing to grow your business.
Starting a business takes research, smarts and self-confidence — and a measure of fearlessness. You may already be asking yourself: How can I start my own business with no money? What's the right equipment? Am I getting the best advice?
Here are the essential steps on how to start a business, from choosing the right business idea, creating a solid business plan and structuring your company to opening a business bank account and choosing the right accounting software.
» Ready to start now? 9 essential business tasks that take an hour or less
What business should you start? It depends on your expertise, plus how much time and money you’re able to invest. Some small-business ideas can be launched from home.
If you’re not sure what kind of business you want to run, use these lists to get the wheels turning:
50 Best Small-Business Ideas
The 23 Most Profitable Business Ideas
Home Business Ideas: 40 Remote Jobs to Explore
44 Online Business Ideas You Can Start Now
A strong business plan can help you prepare for every aspect of your business. This document should include details of the products or services you plan to offer, how you plan to make money, who you need on your team and more.
You’ll need a business plan to show to potential investors and lenders. But the process of writing it will help you chart a course for your business, too.
How to Write a Business Plan, Step by Step
The Best Business Plan Software
The legal structure of your business can affect everything from your taxes to what you're liable for. Talking with a tax professional can help you choose the right business structure for you. And you can change your structure as your business grows.
How to Choose the Right Business Structure
Pros and Cons of a Limited Liability Company
LLC vs. Sole Proprietorship: How to Choose
Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. The online application only takes a few minutes.
How to Apply for an Employer Identification Number
Benefits of Getting an EIN (Even If You Don’t Have To)
In general, restaurants need health inspections and liquor licenses. Hair stylists need cosmetology licenses. Your city may require you to apply for a business license regardless of what field you’re in. And if you’re renovating a space to sell products or perform services, you may need to ask local officials for a zoning change.
Set aside time early on to find out what licenses and permits you need before you can open your doors. Industry associations and local business associations, like your Chamber of Commerce, may be able to offer advice. If your city has officials who work on economic development issues, they may be helpful too.
How to Find a Startup Lawyer
» MORE: 5 steps to turn your side gig into a full-fledged business
Keeping your business and personal finances separate is key to managing your business finances. A business bank account can help, and they’re easy to set up.
Where to Open a Business Checking Account Online
Best Free Business Checking Accounts
Best Business Bank Accounts for LLCs
Best Business Bank Accounts for Freelancers
Most businesses need a little capital to get started. In general, business loans are not available to businesses that have been operating for less than six months, and most online lenders prefer at least a year in business. Startups should look to other financing options.
Many business owners rely on their own savings to get started. You can also look into crowdfunding, personal loans, business grants and more.
How Do Business Loans Work?
Startup Business Loans
Crowdfunding for Business
Startup Business Grants
Funding Your Business With a Personal Loan
A business credit card can help keep your business and personal finances separate, and it can come in handy for purchasing needed supplies and paying your bills while your cash flow is still uneven.
Usually, you can qualify for a business credit card based on your personal credit score, so these can be good tools for startup financing.
How to Get a Business Credit Card
Best Small-Business Credit Cards
Best Business Credit Cards for Startups
It’s essential that you keep records that show how much revenue you’re bringing in and how much you’re spending. Accounting software can make this process much easier — and there are even some free options.
As your business grows, you may want to start working with a bookkeeper . This person can help ensure your records are complete and accurate, which makes it easier to file your taxes, apply for financing and more.
Best Accounting Software for Small Businesses
Best Free Accounting Software
Know These 4 Business Financial Metrics to Track Performance
You'll have some new tax responsibilities as a business owner — including, potentially, the need to pay taxes throughout the year, not just during tax season. But you'll probably discover some new tax breaks, too.
Filing taxes can be complex, especially as a small-business owner. Developing a relationship with a tax professional early on can help set you up for success, and they can be a trusted adviser to your business later on.
Best Tax Software for Small Businesses
How Estimated Quarterly Taxes Work
How to Find the Right Tax Advisor for Your Business
It's important to protect your business and your personal assets, and business insurance exists to do just that. NerdWallet recommends that every business carry general liability insurance in case of legal claims.
You may also need insurance to comply with a contract, like to set up a booth at an event or work as a subcontractor on a larger project.
Best Small-Business Insurance Providers
How Much Does Business Insurance Cost?
What is General Liability Insurance?
What is a Business Owner’s Policy (BOP)?
An online presence is critical for almost every business — especially if you want to sell products online. Setting up a website and social media profiles early on, even if they’re simple, can help you start developing relationships with potential customers right away.
Here’s what you need to know to start your business website:
How to Build an E-Commerce Website
8 Best E-Commerce Website Builders for Small Businesses
The Do’s and Don’ts of Using Facebook to Drive Business Sales
If your business takes credit and debit cards, you'll likely need a payment processor and a merchant account. If you take payments in person, you’ll probably need a point-of-sale system too.
B e s t P o i n t - o f - S a l e S y s t e m s
Best Credit Card Processing Companies
Best Credit Card Readers for Small Business
You may not need to hire employees right away — and some small-business owners prefer to remain solopreneurs throughout the life of their business. But if you do choose to hire, you’ll probably need workers’ compensation insurance, payroll software and more. Here’s what goes into hiring your first employees.
Ready to Hire Your First Employee? Prep With These Steps
How to Choose the Right Payroll Software for Your Business
What Is Workers’ Compensation Insurance?
Once you’ve been in business for six to 12 months, you may start qualifying for business loans. Financing can help your business grow and expand — by buying equipment, renovating an office or expanding your inventory, for instance — or float you through a slow season while you prepare for increased future revenue.
Here’s what you need to know about business loans, lines of credit and other financing options.
How to Get a Business Loan
Small-Business Loans: Compare Financing and Apply
SBA Loans: What They Are and How to Qualify
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50 Steps Every Entrepreneur Must Take to Build a Business
Inspiration, passion and a cash-flow plan are startup essentials.
Nov 23, 2015
Starting a business is one of the most challenging and rewarding things you'll ever do. The process is simpler than you might imagine, but to try to boil it down to five or 10 steps is an underestimation and an injustice. The following 50 steps to start a business are, for the most part, necessary -- though some businesses may be able to skip several steps, and others may be able to accomplish them completely out of order.
Related: 7 Myths About Starting a Business That I Used to Believe
Take these steps to start your business, however they suit you best :
1. Be inspired. Your first step is to get inspired to be an entrepreneur . If you're reading this article, you're probably already there.
2. Have a passion. Few business owners are successful without a sufficient passion driving their efforts. Find something you're passionate about.
3. Educate yourself. You don't need a college degree , but you do need to be aware of the risks and realities of business ownership.
4. Generate an idea. This is the hard part: coming up with an idea that has the potential to launch a full-fledged business.
5. Preliminarily research the idea. Poke around the web and see what you can find . Are there other businesses like this?
6. Talk to others. See what your friends and family think about your idea, and be open to criticism.
7. Develop the idea. Brainstorm to work out the potential flaws and key advantages.
8. Research and start a business plan. Now's your chance to get more involved. Find out what competitors there are and dig deep to create a full-fledged business plan (use the next steps to help you).
9. Determine your target market. Not everyone will be your target customer. Find a niche .
10. Come up with a financial model. How much are you going to charge? How much will it cost to run the business? How profitable can you be?
11. Come up with an operations model. Who and what do you need to maintain production?
12. Come up with a staffing plan. Determine the people you need to hire to get things started.
13. Come up with a sales and marketing plan. This isn't superfluous. Sales and marketing are what will drive your business to grow.
14. Come up with a growth plan. How do you expect to scale in the first year ? What about years two and three?
15. Decide on a legal structure for your business. Every legal construct has advantages and disadvantages. Think carefully about what will work best.
16. Determine what you need to start. Think about the people, resources and capital you need, and have both an "ideal" and "minimum" range.
17. Objectively analyze the risk. Determine how much you stand to lose if the company goes under.
18. If you're ready, quit your current job. If everything looks good, pull the trigger and invest yourself full-time in your enterprise .
19. Secure capital. Withdraw savings, borrow from friends, seek funding or set up a line of credit with a bank -- or some combination of these.
20. Seek resources and aid. Join a small-business development center and find local resources to help you succeed.
21. Scout for potential clients. Keep your eyes peeled for individuals and businesses that might buy from you, and the earlier the better. Try to get at least one client before investing a dime.
Related: Need a Business Idea? Here are 55
22. Register your business name. It's a simple step, but a necessary one.
23. Get a tax ID. Don't forget about your tax responsibilities.
24. File for state and local taxes. Don't neglect this financial step.
25. Obtain any necessary permits or licenses. Your business may require additional legal registrations.
26. Recruit one or more mentors. Find experienced entrepreneurs who can help you with the remaining steps, offering insight and guidance.
27. Find your key locations. Your office location, operations HQ and related issues are important decisions to make.
28. Establish a unique brand. Find out what makes your business unique, and develop a brand around it.
29. Start building a personal brand. While you're at it, build a personal brand for yourself.
30. Create a test product or service. Call it a prototype if you want. Create a sample if you haven't already.
31. Establish key vendors and partners. Find contractors, vendors and suppliers to help your business succeed.
32. Learn and apply your employer responsibilities. You'll have to offer certain benefits, conditions and withholdings.
33. Hire your first employees. Hire the bare minimum you need to get started.
34. Create a human resource plan and company culture. Create some guidelines, and hire people who will adhere to them.
35. Start selling. Go out and sell the heck out of your products.
36. Launch a website. As soon as you can, establish an online presence.
37. Outline and begin a digital marketing campaign. Digital marketing is cheap, easy, and effective . SEO, content marketing, and social media are good places to start.
38. Network everywhere you go. Make it a point to meet people . You never know who could be a new client or employee.
39. Find at least one dependable, long-term client. Prioritize getting at least one surefire long-term client.
40. Use promotions and discounts to attract new customers. Profitability is not as important as recognition in your early stages.
41. Learn from customer feedback and launch a second iteration of your products or services. Make tweaks to your offerings.
42. Hire more employees if necessary. When you're ready, expand the team.
43. Tweak your operations to become more efficient. No operation plan is perfect. Find ways to improve yours.
44. Ensure your cash flow remains positive, with proper safety measures. Cash can kill an otherwise profitable business. Don't neglect it.
45. Scale your sales strategy. Do more.
46. Scale your marketing strategy. Reach further.
47. Invest in infrastructural improvements. Improve whatever you can afford to improve to make your customers happier.
48. Learn more about your industry. Reach out to competitors, and attend industry conferences.
49. Become a thought leader. Establish yourself as an authority by speaking, writing and hosting webinars.
50. Evaluate your progress thus far, and adjust your business plan. Determine where you are in contrast to where you thought you'd be, and think about what expectations you had that were wrong. Revisit your business plan and adjust it to reflect your current situation and understandings.
Every business is unique, so yours may not perfectly adhere to the formula. Use these steps as a loose guideline for the course of your business' development, and thrust yourself into the process as much as you can.
Related: 5 Books to Read Before Starting Your Business
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You have a winning idea plus the passion and skills to make it a success. But the process of actually getting your business off the ground can be overwhelming. Trust us, you’re not alone.
In partnership with the U.S. Chamber of Commerce and Upnetic (an online services platform for small business owners, startups and entrepreneurs), ADP® has created an e-book that provides a roadmap to business ownership. We also collaborated on a webinar offering advice for those who are launching or relaunching a business in the wake of the pandemic . As you continue to perfect your business idea, here are a few things to keep in mind to help you get off to a smart start.
What do you need to start a small business?
Every successful business started from the ground up. No matter how eager you are to get a product into market, taking the time to create a solid foundation now will help increase the chances of your business surviving long-term. Some of the basic things you may need to start a small business include:
- Idea backed by market research
- Business plan
- Funding and bank account
- Business structure (corporation, LLC, etc.)
- Doing business as (DBA) name
- Employer identification number (EIN)
- Business location
- Licenses and permits
- Insurance policies
What is a good business to start?
A good business to start is usually one that fills an unmet consumer need. Think of any everyday problem that’s yet to be solved or ways to improve an existing solution by making it faster, cheaper or easier to use. Preferably, your idea should be something that you’re passionate about or have some existing level of expertise.
Choosing the entrepreneurship that’s right for you will also depend on your financial situation. Some businesses, such as dog walking, have low start-up costs, while others, like a restaurant, may require considerable investment. And if you’re looking for a get rich quick scheme, you may be disappointed. Most small businesses take considerable time and effort before turning a profit.
Starting a business from home
Many entrepreneurs start a small business because they like the idea of working from the comfort of their home and setting their own hours. And while this is a great perk, it also limits the type of business you can create. Manufacturing products, for example, might not be feasible from your living room. Additionally, you may need to consider the zoning and legal restrictions in your particular neighborhood, and how your business will affect your neighbors and those who live with you.
How to start your own small business
Taking an idea to market or making a dream become reality typically takes a series of carefully planned business decisions. While not every business follows the same path, most take some of these steps:
Step 1: Perform market research around your idea
Market research can help you mitigate risk because it lets you know how much of a demand there is for your product or service and the level of existing competition. It also provides demographic information on your target customers, such as their income and where they live.
You generally have two options when it comes to research – review existing sources or conduct your own analysis. Relying on previously gathered data can save you time and money, but it might not be current or specific enough to your target clientele. If you start your research from scratch, you have the advantage of engaging with customers directly through focus groups, one-on-one interviews and surveys.
Step 2: Create a business plan
A business plan explains your goals and how you hope to achieve them. If you need funding for start-up costs, many investors will want to see your plan so they can assess your potential profitability. Business plans can also help you attract partners and employees.
When creating a business plan, you can take a traditional approach or create something lean. Traditional plans have comprehensive details and are often required to achieve a business loan. Lean plans, on the other hand, are shorter and may use more charts than written copy. They’re often ideal for simple business models that plan to start up fast.
Whichever plan you choose for your new business, most include at minimum:
- A description of your product, it’s value proposition and how you plan to market it
- How much investment you require and the amount of revenue you expect to make
- Your target audience and the customer experience
Step 3: Finance your business
Start-up costs are one of the obstacles that sometimes prevent people from ultimately pursuing their dream. The good news, however, is that even if you don’t have much money at your disposal, there are several ways to fund your business, including:
- Bootstrapping Self-funding is advantageous because you maintain complete control of your business. On the downside, it sometimes comes with the highest personal financial risk.
- Venture capital investments Venture capitalists or “angel investors” may be willing to fund your business, but they usually expect membership on your board of directors or some stake in the company. You may need a detailed business plan to secure a capital investment.
- Small business loans If you don’t have enough money, but still want to keep full ownership of your business, a loan might be advantageous. Be prepared to show banks and credit unions a comprehensive business plan, as well as your estimated expenses and financial projections.
- Crowdfunding Some people invest in a business in exchange for perks, as opposed to a share of the profits or company ownership. Because these perks are usually merchandise or name recognition, your business may need to be in the general consumer product or creative industries to take advantage of crowdfunding.
Step 4: Choose your business structure
How you plan to structure your business – sole proprietor, corporation or something in between – will typically have legal and tax implications for the foreseeable future. That makes this decision a critical one. Some of the more popular business structures are:
- Sole proprietorship This is the most common structure for solo entrepreneurs or “solopreneurs.”
- Partnership If you are starting a business with one or more individuals, then a partnership structure might be right for you.
- Limited liability company An LLC blends the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership.
- Cooperative A cooperative is a business or organization owned and operated for the benefit of those using its services. Companies in health care, retail, agriculture, art and restaurant industries fall in this category.
- Corporation Corporations are more complex from a legal and tax standpoint and are therefore more common among larger companies.
- S corporation Eligible domestic corporations can sometimes avoid double taxation (one tax for the corporation and another for the shareholders) by electing to be treated as an S corporation.
Step 5: Choose your business name
After you’ve determined your structure, it’s time to decide how your business will be recognizable to the public. Your business name should:
- Reflect your brand and values
- Convey the services you provide or products you sell
- Work as a logo and resonate on social media and other marketing platforms
You’ll also want to make sure your business name isn’t already taken. Contact your state filing office or search your state’s online database to verify availability. Even if the name isn’t in use, it may still be protected under trademark, so you may also want to check with the U.S. Patent and Trademark Office’s (USPTO) .
Once you’ve settled on a name that suits your organization and confirmed its availability, you should trademark it and purchase a recognizable version of it as a domain name. Then, create a presence on social media channels (LinkedIn, Twitter, Facebook, Instagram, etc.) by opening accounts with your business name.
Additionally, some business structures require a doing business as (DBA) name, which is a fictitious or assumed name that’s different from your business entity name. A DBA may sometimes be necessary to open a business bank account.
Step 6: File registration documents
Registering your small business with the government may not always be necessary, but it might avail you to personal liability protection and legal and tax benefits.
Federal registration Other than a tax ID number, you usually don’t need to register your business with the federal government unless you’re applying for tax exempt status or trademark protection.
State registration You may be required to register in the state where your business was formed and any other states that you operate in, also known as foreign qualification. Registration documents vary by state and business structure, but most typically ask for:
- Business name
- Owner or management structure
- Name of registered agent
- Total number and value of shares, if applicable
Local registration Most local governments don’t mandate that businesses register with them, but certain business structures may need to apply for licenses or permits.
Step 7: Apply for EIN or Tax ID
As soon as your business is registered, you might want to apply for an employer identification number (EIN) from the IRS. This number is necessary so you can file your federal taxes, hire employees and in some cases, open a business bank account. You can apply for an EIN on the IRS website .
In addition, some states have their own tax ID numbers, which you may need to pay state income tax and unemployment tax. Check with your state for the specific application process.
Step 8: Open a small business bank account
You’re going to need somewhere to deposit all those hard-earned dollars, but what type of account best fits your current requirements and future goals? Given that you’re just starting out, you may need:
- A simple checking account with no or low monthly fees
- A bank that offers convenient locations and hours of operation
- Online banking and mobile apps to help you manage your money on the go
- Loan products should you need some growth capital now or in the future
How to open a bank account
After you’ve found a bank that suits your needs, gather the necessary paperwork to open a business account:
- Official business formation documents
- EIN or tax ID numbers
- Business name and location
- Date the business was established
- Business owner’s Social Security number, address and date of birth
How to apply for financing
Particularly at the start, you may need to apply for a business line of credit to keep things moving. These short-term loans are useful for bridging temporary working capital needs, such as inventory purchases or operating expenses.
To apply for a line of credit you usually need to provide the bank with proof of revenue. If approved, they may set a limit, which like a credit card, allows for continuous borrowing and repayment within the agreed duration of the loan.
Step 9: Obtain any necessary licenses or permits
Before you open for business, take a moment to make sure that you have all the correct licenses, permits and insurance policies to operate legally. The last thing you want at this stage is to be shut down by a government agency.
Which licenses and permits do you need?
If your business operates in certain industries, such as agriculture and broadcasting, you might need a federal license. Other industries, like health care, typically require professional licenses. Even if you don’t fall into one of these categories, you may need some form of permission to conduct business. Freelancers and consultants, for example, sometimes have to have a home occupation permit.
Which insurance do you need?
Your insurance needs will depend on what type of business you have, but there are also requirements that vary from state to state. Examples of types of insurance you may need to consider include:
- Workers’ compensation Mandatory in most states, workers’ compensation provides coverage for on-the-job injuries or illness. Employees typically receive wage replacement and medical benefits in exchange for mandatory relinquishment of their right to sue for negligence.
- General liability insurance This insurance usually covers accidents, injuries and claims of negligence.
- Product liability insurance Often essential for businesses in manufacturing or distribution, product liability helps protect against financial loss due to a defective product that causes injury or bodily harm.
- Professional liability insurance If you provide a service, professional liability, or errors and omissions insurance, helps safeguard you from malpractice and negligence lawsuits.
- Commercial property insurance Property damage and loss caused by fire, smoke, storms, vandalism and other events are usually covered by commercial property insurance.
- Business owner policy Designed for small and medium-sized businesses, BOP combines general liability insurance and property insurance into a single, more cost-effective policy.
Step 10: Choose your accounting and payroll system
Before you make an initial sale or hire your first employee , you most likely need a method of managing your finances and paying the people who work for you. You can tackle these important tasks yourself using spreadsheets, hire an accountant or work with a payroll provider .
If you’re a solo operation or only have a few employees, a manual approach to payroll may save you money . It is, however, time consuming and comes with the most risk because you could be fined for mistakes . Hiring an accountant might give you more peace of mind, but they’re usually expensive and you may lose some control of the process. A payroll provider , on the other hand, is often the best of both worlds, giving you control and risk reduction, while also saving you time.
Payroll providers like ADP offer products that in most cases, can automatically pay your employees, file taxes on your behalf and help you comply with applicable government regulations. Our payroll also seamlessly integrates with many types of accounting software so you can manage your finances from one place. A provider like ADP serves business of all sizes so whether you need payroll for a small business or something larger, we can help.
Step 11: Create a web presence
Since most customers use the internet to search for goods and services, a helpful and attractive website can be an integral piece of your marketing strategy. The ideal web presence should:
- Engage your target audience
- Include key terms for search engine optimization (SEO)
- Display your business logo
- Have creative content
- Integrate social media channels
Although there are some platforms that allow you to build a site with little or no development knowledge, it may be worth hiring a professional if you want to present a truly polished image of your business. Look for digital agencies who specialize in helping small businesses because they’re usually more likely to understand your needs and meet your budget requirements.
Starting an online business
A website is even more critical if your business will be conducted entirely online. You have several options in this regard:
- Ecommerce store Sell your own inventory of products directly to customers.
- Drop shipping Work with a third party distributor to fulfill your sales orders.
- Affiliate marketing Drive traffic to ecommerce sites and make commission on sales.
- Blogging Create engaging content that generates revenue from advertisements.
Step 12: Choose retirement and health insurance plans
You might want to review your health insurance and retirement plan options as soon as possible because they can help you attract employees. Even if you don’t or won’t have employees, you may still want to consider benefits for yourself as the business owner.
How to choose a health insurance plan
When shopping for health insurance, look for a plan that:
- Meets your desired level of coverage (medical discount, limited or full-feature plan)
- Compiles with the Affordable Care Act (ACA)
- Offers access to all the services you need (specialists, mental health, etc.)
- Has co-pays, deductibles or out-of-network expenses within your budget
How to choose a retirement plan
When considering retirement plans, small businesses generally have three options:
- Simplified employee pension plan (SEP-IRA)
- Solo 401(k)
Each of these retirement plans has different contribution limits. To determine which makes sense for you, consider your savings goals, the time scale and if you anticipate needing access to the money before retirement. Consult with a small business banker or financial advisor or visit the IRS website for more help making an informed choice.
How to start payroll for a small business
To get started with payroll , whether you’ve chosen to do it yourself or work with a payroll provider , you may need to:
- Apply for tax ID numbers
- Gather employee information (Forms W-4, I-9, etc.)
- Create a payroll calendar
- Have a method of tracking employee hours
- Open a separate bank account for payroll
How to pay employees
You can compensate your employees using paper checks, direct deposit and alternative methods, like paycards . But how do you get from the first day of a pay cycle to the all-important pay day? Following these basic steps may help:
- Determine employee hourly wage
- Track hours worked
- Calculate gross pay
- Withhold pre-tax voluntary deductions, such as health benefits
- Deduct mandatory payroll taxes
- Withhold post-tax deductions, such as garnishments
- Distribute payment and paystub
- Keep detailed payroll records
This process may sound simple, but it often becomes complex as you hire more employees. Working with a payroll provider may save you time and prevent costly mistakes.
How to do payroll for self-employed
If you’re a solopreneur or independent contractor, you can usually pay yourself directly from your profits. Depending on your total earnings, however, you may have to pay income tax and self-employment tax, which is a combination of Medicare and Social Security taxes. These taxes are, in most cases, filed quarterly using IRS Form 1040-ES .
Starting a small business FAQs
See what other entrepreneurs ask about starting a small business:
Can you start a business with no money?
As long as you’re willing to put in the effort, it may be possible to start a business with limited or no funds. Service-based businesses are sometimes a good option for cash-strapped entrepreneurs, especially if you have expertise in a specific area or already own the tools needed to perform the job. Product-based businesses usually require more capital, but you can still pursue them in some cases by starting a service business and using the profits to launch a product. Along the way, you typically need to do all the work yourself and may have to keep your existing job to avoid financial hardship.
What is the easiest business to start?
Businesses where you perform a service – landscaping, graphic design, consulting, etc. – are usually the easiest to start because they require the least initial investment. They also tend to be more profitable compared to product-based businesses that have overheard expenses. And if you choose a service that suits your existing skill set, you can sometimes be up and running fairly quickly. Another advantage to service-based businesses is that many of them can be done as a side job, so there may be less financial risk.
How much does it cost to open a business?
Startup costs generally vary greatly depending on the type of business you plan to open. Some businesses need office space, others require specialized equipment and most today need a website. As an entrepreneur, you need to carefully estimate these expenses ahead of time. This will help determine how you’ll finance your business and may reduce your chances of running out of money before you turn a profit.
This article provides practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal advice or other professional services. It is recommended that you consult with a professional advisor for your particular business needs.
All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., (ADPIA) its licensed agents or its licensed insurance partners; 1 ADP Blvd., Roseland, NJ 07068. CA license #0D04044. Licensed in 50 states. All services may not be available in all states. ADPIA is an affiliate of ADP, Inc.
This Site may contain links that will let you access other Web sites that are not under the control of ADP. The links are only provided as a convenience and ADP does not endorse any of these sites. ADP assumes no responsibility or liability for any material that may be accessed on other Web sites reached through this Site, nor does ADP make any representation regarding the quality of any product or service contained at any such site.
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How to Start a Business: Step-by-Step Business Startup Guide
- Starting Your Business
Learn how to start your business with this guide—covering everything from business plan creation to permits and legal obligations.
This article is for educational purposes and does not constitute legal or tax advice. For specific advice applicable to your business, please contact a professional.
So you’ve decided to start a business. First off, congrats on taking the plunge — being in business for yourself has personal rewards above and beyond any monetary success you might achieve. You’re joining a growing number of new entrepreneurs over the past year. There’s autonomy and satisfaction in knowing that every milestone is the result of your own blood, sweat, and tears.
But whether this is something you’ve been dreaming about for years or an idea that’s just recently struck, you need to make a plan. This guide walks you through the steps required to start a business.
Before embarking on your entrepreneurial journey, you may want to consider writing your own checklist for starting a business to ensure you don’t miss a step. While your industry and business goals will largely influence this checklist, all owners likely need to do the following before opening their doors for business:
1. Start with a business idea
Begin by solidifying a business idea and doing your market research . Before you start planning, make sure you have a clear idea of what you want your business to be. This is also the time to research your industry to determine trends and identify key competitors and how you can differentiate yourself.
2. Write a Business Plan
A business plan is where you plan out your business’s future objectives and how you will achieve them. Think of it as your guide for success and any potential roadblocks you may face. Your plan should show you’re looking three to five years ahead, and include markers for milestones along the way.
You need a business plan for a couple of reasons. First off, it’s a blueprint for how you’re going to start, run, and then grow your business — something you can look back on for reference and measure yourself against. Secondly, if you’re seeking outside funding, you need a business plan to show that you’ve thought things through carefully.
When it comes to writing a business plan, there’s no one-size-fits-all approach. There is a bounty of resources out there to help entrepreneurs like you get started.
But even though business plans vary, they all typically contain a few key components. When you think about formatting, it’s a good idea to use the below sections as a template — including visuals like graphs and projections where appropriate. Length can also fluctuate depending on what you’re trying to do but, typically, business plans are between 15 and 20 pages long.
Here’s an overview of what your business plan should include :
- Executive summary: A top-line description of your business and how you’re going to accomplish your goals
- Business description: Your elevator pitch, conveying your business idea in a concise manner
- Market analysis: A current landscape of the market and a description that identifies your target market
- Competitive analysis : The strategic research outlining information about competitors in the space
- Service and product line: Details on what type of service or product you’re offering
- Operations and management plan: How you’re going to get up and running, and then manage day-to-day operations
- Financial considerations: A financial analysis of all the capital you need to start, run, and grow your business
3. Determine a Business Model to Make Money
As you lay the groundwork for your new business, it’s important to consider the different types of business models you may want to pursue. A business model is the way a company plans to make money with its product or service. It is an explanation for how you will deliver value to your customers and includes who your customer base is, products or services you plan to sell, and costs that will be incurred.
Here are different types of business models to evaluate:
- Distributor: A distributor purchases products, stores them, and subsequently sells them through a distribution channel. The selling of these products may take many forms, such as selling using the aid of a sales team or a reseller.
- Wholesaler: A wholesale business model means a business is selling products in bulk to a retailer, often at a discounted price. These retailers will in turn sell directly to customers.
- Subscription: In a subscription business model , customers make a recurring payment on a monthly, quarterly, yearly, or other consistent basis for a product or service.
- Freemium: Freemium business models are a combination of “free” and “premium.” The business might give away the service at no cost while offering more advanced or additional services for a fee.
- Marketplace: Marketplace business models are where multiple sellers or vendors come together to sell products to customers.
- Direct-to-consumer: A direct-to-consumer business model is when a business sells directly to the consumer rather than through vendors, retailers, or resellers.
- Razor-razor blade: A razor-razor blade business model is when a product or service is sold at a lower price to increase sales of a complementary or paired product. For example, a razor might be priced at a lower cost in order to increase sales of the razor blades necessary to use it.
- Consulting services: Your business can offer consulting services by sharing your expertise with others. Businesses might hire a consultant to provide guidance on a specific project or over a specific amount of time.
- Franchisee: In a franchise business model, the franchisee pays a fee to the franchise in order to license the name and operating systems of the business.
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4. Choose Your Business Name
It’s time to make things real: Decide on your business name (an important branding exercise in itself) and register it with the government.
Here are some steps to get you rolling with your business name :
- Brainstorm business name ideas.
- Make sure the name isn’t taken.
- Use tools to generate and verify the business name.
- Consult an expert.
5. Choose Your Business Structure
Each type of business entity — sole proprietorship, partnership, LLC, corporation — has its own unique tax, legal, and structural implications. Because of this, it’s smart to consult a reputable accountant and lawyer before officially deciding on what form of business entity you want to establish. It’s also a good idea to spend some time with the IRS Small Business and Self-Employed Tax Center , as well as the the State and Local Tax Guide .
You need to register your name or DBA (doing business as) name with the county clerk’s office or your state government, depending on where your business is located. But before registering your business name, you have to decide on a business structure. If you’re stuck, the IRS is a good place to start.
Registering your business name is usually part of the process of registering LLCs and corporations. But if you’re starting a sole proprietorship or a partnership operating under a name that isn’t your own (e.g., your name is John Smith but you want your business name to be something else), you may need to file a DBA.
6. Get Your Licenses and Permits
Most businesses require licenses or permits to operate. If figuring out licensing and permits sounds overwhelming, you might want to think about consulting an attorney in the beginning stages, just to make sure you are compliant with all rules and regulations. Outside of a general business license, and depending on the type of business you’re building, you may need additional licensing and permits.
Now for all the paperwork.
- Register for state and local taxes. Each state and locality has its own taxes, so it’s important to have a solid knowledge on this front to help you avoid problems and save your business money. (This is another place where an accountant or lawyer comes in handy.) Check the Small Business Administration for more information on determining your state and local tax obligations.
- You may also need a number of state and local licenses and permits. The required licenses and permits vary from business to business, so be sure you have the ones you need before you set up shop .
If you’re planning on hiring employees, now is the time to familiarize yourself with all your obligations as an employer . You want to cross your t’s and dot your i’s before you hire your first team member. This is also something you may want to discuss with your lawyer.
7. Determine Your Business Startup Costs
Starting a business does come with a variety of upfront costs that all business owners incur while getting their new venture off the ground. Proactively making allowances for expenses will help you track your working capital or the measure of how much liquidity your business has.
While every business is different, and startup costs vary, there are a few expenses that are common to most businesses:
- Employee expenses: You’ve probably considered labor costs as part of your business plan. Factoring in wages, salaries — including your own — and employee benefits will help you better manage your cash flow and plan ahead as you scale your business .
- Bills and utilities: Consider the bills and utilities related to your business. Regardless of whether you own or rent your physical space, you can expect to manage payment for utilities ranging from water and electricity to installing and maintaining WiFi. Both online and brick-and-mortar businesses may incur bills related to their website’s hosting service subscription, customer support software, point-of-sale systems, or accounting software.
- Equipment and supplies: Different types of businesses will require different equipment. Think through the inventory, property, and equipment needs that are related to your business so you can determine if owning or leasing those supplies might be best. For example, a hair salon will have different equipment and supply needs than a food truck .
- Insurance, licensing, and permit fees: Protecting your business by making sure you have all the appropriate licenses and permits to operate should be a top priority. A lot of licenses and permits do come with processing fees, and some with annual fees. These should be factored into your business’s budget.
- Marketing materials: You may rely on print or digital marketing to increase awareness and sales for your business. Keep in mind any costs related to printing or distributing marketing materials.
Overhead costs can be sorted by fixed, variable, and semi-variable. Take a look at where your costs might fall, or calculate a break-even analysis to help forecast future business decisions and stay on top of cost accounting.
As you grow your business, you may want to consider financing . Taking on business financing is a way to provide funds for your business and can take the shape of a traditional loan, line of credit, credit card, and more.
Accept every way your customers want to pay.
Take chip cards, Apple Pay, and Google Pay anywhere and never miss a sale again.
8. Find a Location (or Focus on eCommerce)
Where will you conduct business? This can vary widely based on the type of business you’re running. If you’re a home contractor, for example, you may not even need to rent a physical office. But if you’re opening a salon , on the other hand, you need a space you can use for cutting hair.
Choosing a physical space is one of the most challenging aspects of starting a business. But it’s also one of the most important and requires loads of research and planning. For starters, you have to understand your city’s zoning laws and have a solid grasp on all the financials (like payroll taxes and any hidden costs) associated with renting a space. For help with this, talk with your city and neighborhood councils, or consider bringing on a professional agent to help.
Aside from laws, fees, and regulations, you should also consider your brand image, the safety and accessibility of the neighborhood, your proximity to any suppliers you might need to work with, and any plans for expansion. Talk to fellow business owners in the area and consult free government-provided data on neighborhood and city demographics to help inform your decision.
Don’t need a physical location? Embrace eCommerce with a free online store . As technology blurs the lines between digital and physical commerce, new opportunities to engage with consumers are bubbling up. And consumers are game, according to Square Future of Commerce data : 58% are open to trying newer, digital methods of shopping. For example, 22% would consider virtual reality experiences, 20% would use QR codes to window shop, and 18% would participate in livestream events.
9. Set up Your Business Bank Accounts
As you set up your business, you will begin to accept and spend money. Separating your business accounts from your personal accounts will help mitigate risks, and it’s crucial to do this right at the start. By setting up business banking for your newly founded business, you start building a track record of your finances that will help inform your future business decisions and options.
Open a business bank account
Opening a business checking or savings account can help keep your finances separate, protecting both your business and your customers. Not only can starting a business bank account create a place for your company to store money, you can start building business credit. Building business credit is important to maintain if you’d like to consider outside financing in the future. In fact, you will be accruing a business credit score separate from your personal credit score.
Here are different types of bank accounts you may consider opening:
- A business checking account , which enables you to receive payments under your business name and spend funds using debit cards, checks, or wire transfers. This is the account you’d use to manage payroll and handle other operational expenses.
- A business savings account , which allows you to store funds safely while they earn interest.
- A business credit card account , which enables you and other authorized users to make purchases on credit and pay them off later.
- A merchant services account , which allows you to accept credit and debit card transactions from customers in a safe manner, with purchase protection for customers and security for their personal information.
Keep track of your financial statements
By looking at your accounting from the start, you can gain a better sense of your business’s cash inflows and outflows. The three accounting statements you’ll want to keep track of include a cash flow statement , balance sheet, and profit and loss (or income) statement .
These statements are not only a good way for you to have a sense of your business’s financial health, but also to establish a history of your business’s finances.
10. Get Your Business Online
Consumers expect that they can interact with your business on their own terms, any time, and anywhere. And the key channel that customers can use to contact you and learn about your business is your website. Here’s how to get started.
Register a domain name
If you don’t have a website, you need to purchase your domain. Some eCommerce platforms let you buy it directly from them or you can use a domain registrar. Your domain should be your business name if it’s available, or something that fits your brand, products, or services.
A good domain name should be short and easy to share. Avoid using numbers, hyphens, underscores, and symbols that are difficult to remember. Connect the domain name to your business. If your business name isn’t available, add a prefix or suffix. For example, a kayak company located in San Francisco could choose SanFranKayakTours.com or KayakToursSF.com.
Also, be sure to check with your legal counsel to ensure that you don’t run into trouble by choosing a domain name that may be confusingly similar to another business’s brand.
Create a website
There is a wide range of approaches for business websites , from DIY self-hosted services to eCommerce platforms, that make it easy to build a site with no coding required.
Square Online helps you grow your business with a professional, beautiful website. The easy-to-use online store builder allows you to sell online, offer curbside pickup or local delivery, and sell through Facebook, Instagram, and more. And it integrates with your point-of-sale system to keep online and in-person orders, items, and inventory in sync, all in one place.
No matter the path you choose, here are some key tips to optimize your business website :
- Stay current: Keep everything updated, from service and menu offerings to pricing, contact information, hours of operation, and directions
- Put your best foot forward: Make the site easy to navigate with well-lit, composed shots of your space and offerings
- Optimize for mobile: Most consumers will find your site on their phones, so make sure it works on mobile devices as well as desktops
- Implement some SEO : Help customers find your business when they’re searching
- Link your social media : Let visitors easily keep up with your updates across channels
11. Get Business Insurance
Business insurance can protect your business from possible financial loss. There is a range of different types of business insurance options, but not all of them will be applicable. For some business owners, having insurance can provide protection from paying unexpected costs .
Depending on your type of business, here are a few types of business insurance options to explore:
- General liability insurance: General liability insurance protects your business from claims of bodily injury or property damage resulting from your products or services.
- Commercial property insurance: Commercial property insurance protects your business’s physical assets, such as equipment, furniture, inventory, or supplies. This can help cover costs for damaged, destroyed, or stolen property.
- Business income insurance: Business income insurance covers loss of income when damage to a company’s premises or property causes a slowdown or suspension of operations. Common costs covered under business income coverage can include employee wages, mortgage and rent payments, tax payments, or loan payments.
- Workers’ compensation insurance: Most states require employers to obtain an insurance policy for workers who get injured on the job or become ill due to a workplace exposure. Workers’ compensation insurance requirements for employers vary from state to state, so be sure to review your state’s requirements and find a policy that suits your business.
There are also additional types of business insurance to explore, like data breach insurance, commercial auto insurance, or professional liability insurance. Depending on the industry your business operates in, there may be state mandated business insurance requirements.
12. Create a Brand, Marketing Strategy, and Promotion Plan
While it’s often the last thing new business owners focus on, marketing can be the thing that ensures your new venture is successful.
Build your business and entrepreneurial brand
Your business brand is built around the identity created for your business. You craft a name, mission statement, and vibe. A personal brand is more about what you stand for personally and what you’ve achieved, as opposed to the business side. It’s also what distinguishes you from your competitors. It’s important to work on both.
Develop a marketing strategy
Your marketing strategy gives you and your employees a clear understanding of your marketing and priorities, and what the tactics to achieve your goals are. Setting goals and outlining how you plan to achieve them is the best way to grow your business. From doing your research to determining KPIs, here’s how to get started with a marketing strategy .
Put together a promotion plan
Marketing online can be daunting. It may even sound like something only large companies have the budget to afford. But there are several ways small business owners can connect more easily with their customers online if they’re just starting out. Here are some resources:
- Paying It Forward Podcast: How Small Businesses Are Connecting with Customers Online
- How to Get Media Coverage for Your Business
- How to Start and Grow a Newsletter
- See How Square Marketing Can Help Grow Your Business
13. Check Business Laws
While you may be an expert in your industry, the business laws that apply to your company might be new territory for you. Here are the types of business laws to be aware of when you’re getting started:
- Intellectual property laws: This covers intangible property, such as patents, trademarks, copyrights, and trade secrets that distinguish brands
- Tax laws: There are specific tax laws for businesses, including income tax, employment tax, and excise tax for certain products and industries
- Employment laws: The general set of rules that apply to businesses that have workers
- Healthcare laws: Regulations governing healthcare and health insurance provided by employers
- Advertising laws: These laws work to prevent acts or practices in advertising that might deceive or be unfair to consumers
- Privacy laws: Consumers and employees care about the privacy of their personal information, and it’s critical that you’re clearly communicating how you use their data
- Finance laws: This governs how companies can spend money and grow their businesses
14. Consider Hiring Staff
Not every business needs a team, and that’s okay. But if you do decide to hire employees or contractors , they’re often the people customers interact with on a daily basis and should represent your company well. When looking to bring on new employees, there are a few important factors to consider .
- Define the roles you’re hiring for: First, identify which roles you want to hire. Then create a job description for each role, detailing the job responsibilities and the skillset you’re looking for in an ideal candidate.
- Find your candidates: When looking for candidates, cast a wide net. Employee referrals are a great place to start, but to create diversity, look for employees outside of your or your employees’ networks. Post your job description to sites like Indeed, Craigslist, or LinkedIn.
- Conduct interviews: Interview a few candidates and include existing employees in the process. Go through each candidate’s work history to make sure they’re qualified, and ask questions that give you an idea of how they’d interact with the rest of your staff and customers.
- Obtain workers’ compensation insurance: Most states require employers to obtain an insurance policy for workers who are injured or become ill due to a workplace exposure. Workers’ compensation insurance requirements for employers vary from state to state, so be sure to review your state’s requirements and find a policy that suits your business.
- Choose a payroll method: After you hire your first employee or contractor, you need to set up a system to pay them and take care of payroll taxes. You can do payroll yourself, through an accountant, or through a payroll service like Square Payroll.
Industry-Specific Info on Starting a Business
This guide provides general information about how to start a business. But each industry has its own requirements and unique factors that you need to take into consideration when you open up shop. Here are some industry-specific guides to help you get started:
- How to Start a Restaurant
- Starting a Photography Business
- How to Open a Salon
- How to Start a Retail Business
- How to Open a Bar
- How to Start a Consulting Business
- How to Start a Cleaning Business
- How to Start a Coffee Shop
FAQ: How to Start a Business
What do you need to start a business.
While it’s tempting to jump in and launch your business, you’ll improve your chances of success by starting with a business plan . A blueprint for your business, a good plan includes your business name and structure, products and services, target market, and your marketing and financing strategy. Next, cross your Ts and dot your Is by completing any required government paperwork, such as a business license or employer identification number (EIN) or tax ID number.Once the paperwork in place, scout your location if you are starting a brick-and-mortar business. You’ll want to also create a website and online store for maximum visibility. Since you’re in business to make money, you’ll need a point of sale system and a bank account. Finally, put a marketing plan in place to generate sales.
How do you start a business from home ?
About half of small businesses started at home, according to the Small Business Administration (SBA) . If you’re interested in joining their ranks, you’ll need to develop your business idea. Start by defining your ideal customer. Run an analysis to identify your competition. Then articulate your unique selling proposition (USP), which is the thing that sets you apart.Next, build your business model. Are you B2C? B2B? A subscription model? Or consultant? When you have your name and structure in place, it’s time to register your business with the proper government authorities. Set up your software stack and prepare your payment system and you’re almost ready to go. Work on developing your marketing plan so you can target your ideal customer and build your home-based business.
How do you start a business with no money?
While it would be wonderful to have healthy savings account to bankroll your business, it’s possible to bootstrap your business with little to no cash. One way is to freelance in your areas of expertise. This can be most effective if you’re a service-based business, such as a marketing firm. Consider businesses with little up-front cost . For example, dog walkers, personal assistants, professional organizers, and social media managers can start their businesses with a simple website and marketing plan. Product-based businesses or service providers that require equipment will likely need to build up savings. You can tap into your personal assets, apply for a small business grant or small business loan through a lender . or recruit investors. A lot of small businesses started with money from friends and family. You can also investigate angel investors and venture capital firms that are in your location or that specialize in your type of business. Or check out crowdfunding sites. .
How do you start a business online?
Any type of business starts with an idea. When you’re ready to take that idea public, you’ll need to give it a name. Choose your brand and find your URL. With those things in hand, you can build a website.
According to Retail Dive, 87% of shoppers start their product search online. To help them land at your site, optimize for SEO by identifying and using the keywords someone would use to find your business.But don’t just wait around for traffic. Generate some by creating a marketing strategy and promotion plan .
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60 Small Business Ideas for Anyone Who Wants to Run Their Own Business
Published: October 21, 2022
A good business idea may seem hard to come by, but with some planning and preparation, you can easily launch a small business to supplement your income — or become your own full-time boss.
Maybe you already have an idea of the business you’d like to start. But while you might feel ready for a new venture and passionate about your idea, you might be looking for some direction.
![Download Now: Business Startup Kit [Free Templates]](https://no-cache.hubspot.com/cta/default/53/1a0a4e5a-b3ce-4c8b-bc42-4e24cde930ae.png "build a business up")
To help get you started, here's a list of small business ideas separated into a few sections:
Best Small Business Ideas
Best businesses to start with little money, home business ideas, easy businesses to start, how to start a small business at home.
The first step to becoming a successful entrepreneur is finding a business idea that works for you. In this article, you’ll find dozens of small business ideas you can start from home and scale up as your clientele grows. Let’s get started.
Free Business Startup Kit
Fill out this form to build your business plan today., what makes a good small business idea.
Not all small business ideas are made equal: Some require more effort and funding than others, while some can be launched with few resources — or resources you already have. As a potential small business owner, you’ll want to save as much money as possible on training, rent, supplies, and other necessities.
Let’s go over what makes a good business idea:
- Requires little to no training . A good small business idea will ideally leverage your existing field of expertise and require little to no training. That will not only shorten your time-to-launch, but also lessen your expenses, since training courses can cost a significant amount of money. Plus, you’ll be more confident offering services that you feel prepared to deliver.
- Requires low setup costs. Your business should be cheap to start. Maybe you only need to purchase a website domain or buy a desk for your garage.
- Requires little hands-on inventory or supply management . A great business idea needs few supplies and little inventory management. If you want to sell physical goods, you can either try drop-shipping and manually make goods in small batches.
- Is based online . The best small business ideas are based online and can be carried out from your personal computer. This will automatically lower your commuting costs and give you greater flexibility over your personal and work life.
- Can sustainably be managed by few people . As a small business owner, you won’t have the funds to hire other people to help you run your business — at least not at first. A good business idea should give you the ability to run your business on your own.
Airbnb Co-founder, Brian Chesky, said, "If we tried to think of a good idea, we wouldn’t have been able to think of a good idea. You just have to find the solution for a problem in your own life."
If you’re like Brian and you’ve already thought about a solution for a problem you encounter in your life — or you’re on the path to doing so — then starting a small business may be in your future. It may also be for you if you dream of clocking out of your nine-to-five job for the last time and becoming your own boss.
Below, we include the absolute best ideas for you to start your small business — with resources and examples to help you get started.
1. Handyman
Image Source
Are you always fixing things around the house? Often on-call when friends need small projects completed? Create a website , conduct a competitive analysis to determine what your time and expertise are worth, and turn to the friends you’ve helped before for referrals.
A handyman business is a good idea if you’ve already built a robust set of skills to help others fix up their homes. Consider specializing in what you feel well-prepared to do — for instance, if you know your way underneath a sink and water system, then you might provide sink fixing services to start, then expand your offerings once you earn more skills.
No certifications are needed to become a handyman, and there are no special education requirements. You might need, however, a license if you’re planning to undertake jobs worth more than a certain dollar amount. Some states might not require this license.
To start your handyman business, we recommend the following resources:
- Handyman License Requirements by State
- The Most Requested Handyman Services
- Association of Certified Handyman Professionals
2. Woodworker
Similarly, if you have a passion for crafting beautiful furniture or other home goods out of wood, that could be a small business niche for you. Get started by listing a few of your pieces on sites like Etsy . Once you build a following, consider starting a website, accepting custom orders, or expanding to refinishing work and upholstery.
A woodworker small business is ideal if you already have a passion for woodworking, as well as the tools to begin fulfilling orders as they begin to come in. Since delivering a well-made product is key to keeping your customers happy, you don’t want to be “training” as you create a custom shelf or a custom storage box. It’s recommended to have at least one year of experience as a woodworking apprentice.
To start a woodworking business, there are no special education requirements, but there are a wide range of woodworking training certifications online, so we suggest starting with a certification. The Woodwork Institute , YesTomorrow , and The School of Fine Woodworking are potential places to start.
3. Online Dating Consultant
Dating consultants usually charge for their time. They help people create successful online dating profiles, source possible matches from outside the typical online channels, and offer a level of personalization that a site like Tinder can’t. Think you’ve got a knack for the match? This might be the business for you.
Online dating consultants need to have strong communication and interpersonal skills, as well as heightened levels of empathy. The good news is that there are no special education or licensure requirements, though we recommend getting a certification such as IAP College’s relationship coach certification or Hart Academy’s online dating coach certificate .
To start an online dating consultant business, you’ll need a website that shares all about you and offers free dating resources your customers might benefit from. Once they download a resource, you can loop them in for a free consultation.
4. Sewing and Alteration Specialist
People will always need clothing hemmed and buttons mended — and you could be the person to do it. If you love sewing and have a sewing machine at home, start by offering simple services like those mentioned above and expand your repertoire to dressmaking and design as you build a customer base and demand.
You don’t need a special license or degree to begin a sewing and alterations business, but it’s essential to build your skills so you can take on more complicated projects. High-value clients will want to customize complicated items of clothing such as suits, pants, gowns, and dresses. That’s where you’ll see the highest potential for profits.
Altering these items require special skills, however. A few courses you might consider include:
- International Open Academy's Tailoring Course for Beginners
- Jackson Sewing Academy’s Basic Alterations Course
- American Bespoke Tailoring Academy’s Programs
You’ll also need to shop for sewing supplies of all colors to accommodate your clients.
5. Freelance Developer
From building websites for other small businesses to providing technical support for certain projects, quality web development is in high demand right now. As a web developer, you'll naturally have a technical skill set. Distill your knowledge and expertise so customers who don't have your experience are able to understand what it is you'll be helping them achieve.
To help with this, test your messaging on friends and family who don’t have a firm understanding of the work you do. If they’re able to summarize what you do, your messaging is likely effective among people outside of your industry. You can start finding your first freelance contracts by visiting different freelance websites .
Unlike a few other options in this list, a freelance developer does need some training to launch a successful business and start taking on projects, but if you’re a beginner, don’t worry. There are plenty of boot camps to get you up to speed with either full-stack or front-end web development. Some of these boot camps are even offered through accredited tech schools.
Some boot camps you might consider include:
- Coding Dojo
- Fullstack Academy
- Georgia Institute of Technology Coding Boot Camp
These vary in price, so be sure to do extensive research to find one that fits you and your budget.
6. Personal Trainer
Offer in-home consultations, personalized nutrition and exercise regimens, and community boot camps to get the word out. Don’t forget to populate an Instagram feed with inspirational quotes, free exercise videos, and yummy snack ideas as well — it’s a common way for fitness gurus to build their brands in our digital world.
If you choose to go this route, it’s OK to start small at first, then scale up. For instance, MOURfit is a personal training business in Indianapolis that started in a shared gym, then grew to a private gym that offers group fitness, personal training, and nutrition services.
To start a personal training business, you’ll need a certification. If you already earned a degree in an unrelated discipline, we recommend starting with the NASM-CPT certification , which is nationally accredited and only requires a high school diploma or GED. You can also get a Bachelor’s degree in physical and exercise science — here’s one example from Emory & Henry College .
7. Freelance Graphic Designer
Set your own hours, choose your projects, and build a portfolio and business you’re proud of. From website design to blog graphics and more, many companies seek out experienced graphic designers for support on a variety of projects.
The good news? There are no special education requirements for becoming a freelance graphic designer, though we recommend seeking a credential (like SAIC’s graphic design certificate or RISD’s graphic design certificate ) or an Associate’s degree in design so you can confidently present your portfolio and complete your first few projects.
If you’re just starting out with graphic design, try these tips and tricks that are ideal for beginners. If you’re more experienced but need to build your portfolio to attract clients, these prompts will get your creativity flowing in no time. We also recommend reviewing other people’s work on portfolio websites to get a feel for what is “trendy” and receive feedback as you grow your small business.
8. Life/ Career Coach
If you have experience navigating career, personal, and social transitions successfully, put it to good use as a life or career coach. Many of us are looking for guidance in our careers — and finding someone with the time to mentor us can be tough.
Life/career coaches don’t come cheap, but they are able to offer clients the intense and hands-on training and advice they need to make serious moves in their personal and professional lives. After all, everyone needs some uplifting advice from time to time.
To start your life/career coaching business with confidence, you can look for a certification program (like the Life Coach School’s or Diane Hudson’s ), then apply your skills as you acquire new clients.
A resume writing business is economical, has few overhead costs, and has few educational requirements. We still recommend having an Associate’s or Bachelor’s degree and a few resume samples on hand. If you still feel that you need to brush up on your resume writing skills, you can take a course like Coursera’s or LinkedIn Learning’s .
Once you’ve gotten resume writing down, you can expand your business to include cover letter writing, and even offer career coaching services in conjunction with these services.
10. Freelance Writer
If you have writing skills , there’s someone out there willing to pay you for them. Write blog posts, magazine articles, and website copy galore — just make sure you have a body of work built up to share with potential clients. Even if you create a few sample pieces to have on hand, they’ll help exhibit your work and attract new business.
To become a freelance writer, it’s essential to choose a specialty. For instance, you might choose to only write for publications in the healthcare industry (maybe because you were previously a healthcare worker), or focus on lifestyle publications. Whatever the case, specializing will help you find your niche market and gain confidence as a new freelancer writer.
There are no educational requirements to freelance writing, but you do need strong writing skills. It also helps to enjoy writing. While a certification may beneficial, getting practice and writing every day is more important. Try these writing prompts to start.
11. Landscaper
Mowing, tree-trimming, and seasonal decor are all neighborhood needs. If you have or can acquire the equipment, a landscaping business can be a lucrative affair. It’s also a great choice if you enjoy doing it for your own home and have a good eye for landscape design.
The good news is that you can start small. For instance, you could offer your neighbors seasonal planting services and start with a few perennial plants, or simply offer mulching services.
To grow your landscaping business, you should consider taking some formal training. The following organizations offer courses:
- New York Botanical Gardens
After completing a course and getting enough experience, you can apply for a certificate from a landscaping organization. While a certificate isn’t necessary to work in the field, it can build your credentials and help you make industry connections to take your landscaping business to the next level. The Association of Professional Landscape Designers offers one potential certificate you could pursue.
Some states require licensure, especially if you’ll be using pesticides and fertilizers. Be sure to review the requirements for your state.
Learn some of the basics now with this video on landscape design from Lowe’s:
12. Videographer
Video production requires you to have invested in the equipment up front, which can be quite expensive. But that’s also what makes your services so valuable. Make sure you have a reel of your work to share or create a website with several selections of your work available for interested viewers.
There are no educational or licensure requirements for starting a video production business. As with writing and other creative arts, though, it pays to specialize. Real estate videos differ radically from wedding videos, and wedding videos differ radically from in-studio interviews and testimonials. By specializing, you target a highly specific customer who’ll benefit the most from your services, and you can also skill-up more effectively in one shooting style.
While you can find general classes on videography, you should consider taking a class in the type of videography you’d like to do. For instance, you could take The Complete Wedding Videography Course , if that’s the route you’d like to take.
Hot tip: If you’re interested in specializing in video marketing, check out The Ultimate Guide to Video Marketing and download our starter pack below.
![→ Access Now: Video Marketing Starter Pack [Free Kit]](https://no-cache.hubspot.com/cta/default/53/8f27c677-d952-4663-8787-bf65c6a1ecf2.png "build a business up")
13. Photographer
Start by conducting photo shoots for your family and friends. As you build a body of work, ask for referrals and reviews. Photography businesses often grow by word of mouth, so create a Facebook page where you can tag recent clients. Photos where you tag those clients will show up in their friends’ newsfeeds, where they can view your work. You can also ask them to leave reviews on your Facebook business page.
Like with a video production small business, you’ll want to specialize. Will you do product shoots or portraits? How about wedding or fashion photo shoots? Once you specialize, you’ll be able to create a body of work that most accurately represents your strengths.
There are no educational or licensure requirements for starting a small photography business, but we recommend investing in a few photography courses, especially if you haven’t used your camera in a while. Some courses you might start with include:
- Cornell’s Digital Photography Certificate Program
- New York Institute of Photography’s Course
From there, seek courses that help you build skills in your chosen specialty.
If you’re not sure where to start with freelance photography, take a look at Erica Clayton’s journey into the business below. Her advice? Give yourself a firm deadline to turn a profit.
14. Bed and Breakfast Owner
This is another business venture that will require you to research the correct licensure from your state, but it will be well worth it to see your dreams come true. Consider what guests will be traveling to your area and create special packages and themed stays that coincide with their interests in your locale.
To start a bed and breakfast business, you’ll need a physical business location and a small staff for maintenance, customer service, and upkeep. For that reason, we recommend it if you have startup funds to start your business. (Don’t have any? Here’s how to start crowdfunding to launch your new business .)
A successful bed and breakfast business will also need an SEO-optimized website with a hotel booking system. If you create your website on the WordPress platform, you can easily create a B&B website using a hotel booking plugin — so there’s no need to code the booking form from scratch.
With Airbnb and hotels stealing market share, the competition is tough in the bed and breakfast space, so we recommend providing a unique angle to the stay. As mentioned, the stays can be themed — maybe your B&B is a vintage home with all original furniture, or maybe you offer traditional fare from your homeland.
15. Clothing Boutique Owner
If you dream of building your own fashion empire, why not start with a local boutique? Build buzz with impressive clothing styles, inspiring social media accounts, and heavy community involvement. While you can open a physical store, you can easily start online — and if that proves profitable, you can open up a local shop.
There are a few ways you can start a clothing boutique. First, you can make the clothes yourself if you already have experience in fashion design or know how to sew, knit, and curate colors and patterns.
Alternatively, you can design certain aspects of the clothing — such as a graphic or a logo — then send it to be printed on-demand at a local print shop when orders come in.
Lastly, you can dropship the items from a warehouse you’ve partnered with. This method is less reliable because there’s less quality assurance for each item, especially if you never visit the warehouses yourself. Regardless of the method you choose, starting a clothing boutique is highly doable, and you don’t need to have a fashion degree (though it certainly helps).
Take some inspiration from Sleep Ova , a luxury loungewear boutique based in Los Angeles, CA.
16. Specialty Food Store Owner
Gourmet foods, cheeses, sake, wine — you name a food, there’s a specialty food store out there for it. Put your passion for exotic olive oils to good use and open a store like American Provisions where you offer the kind of expertise and selection your audience couldn’t dream of getting from their local grocer.
To start your specialty food store, you’ll want to curate and source the items from makers that you love and trust. Ask around your community to find local makers of the food you want to sell, and the makers will likely be open to a partnership, especially if they get a cut of the profits.
When it’s time to sell, you’ll want to find a physical location, but if that investment is too high, you can start by setting up stalls at food festivals and local markets. Or you can go the ecommerce route and sell the products through your website, taking care to carefully pack perishable items.
17. Food Truck Owner
Always dreamt of owning a restaurant but not quite ready to take the plunge? Test out your concepts with a food truck. It’s a great way to become familiar with food and restaurant licensing in your state, see what people like and don’t like, and build a ravenous following before ever opening or investing in a brick-and-mortar location.
Food trucks will require a larger investment, but thankfully, you can rent the truck itself — the Food Truck Group and Roaming Hunger are two potential leasers you could look at. The cost will be high, so we recommend renting one in preparation for an event such as a food festival or concert. There, you’ll get to test out the popularity of your cuisine and see if the food truck business is right for you.
Taco Nganas , a taco truck in Memphis, TN, started with one food truck and expanded to three, building a loyal customer base along the way.
18. Car-detailing Specialist
The devil is in the details, and you can be too. Car-detailing services that travel to the client are convenient for busy people who can’t find the time to run through the car wash. With this business, your clients only have to pay and the service will be done for them before they know it. Just make sure you have the flexibility, transportation, and equipment to take your business on the road.
There are no educational requirements for car detailing, but you should still take a course such as Auto Finesse’s detailing training to learn core concepts and brush up on your skills.
To get your car detailing business off the ground, you’ll need an SEO-optimized website and a way for customers to book online with you. Before you take that step, however, consider listing your services on websites like Angi , Thumbtack , and even Nextdoor.com so you can get your first local clients.
Don’t have a lot of money to start your business? Check out the ideas below.
1. Translator
Speak a foreign language? Start a translation service. Consider specializing in a specific genre of translation, like medical or financial translation, as you might be able to fill a niche need in your community.
2. Garden Designer
Many people have the willingness to do the dirty work in their backyards, but few have the know-how to complete the first part of this process — designing and planning the backyard space. Draw up the designs for your clients’ outdoor spaces and let them do the actual digging.
3. Ecommerce Store Owner
Do you create, collect, or curate anything special? Consider starting an ecommerce store and turning your hobby into a full-time job. Whether you need somewhere to sell all that pottery you’ve been making, or an excuse to search for the sports memorabilia you love tracking down, an ecommerce store can make it financially viable for you to pursue your passion.
4. Travel Planner
The time of the travel agent might be passing, but people are still looking for those with a knack for more nontraditional travel coordination. If you always plan the perfect vacations complete with beautiful hotels, the ideal location, and a bevy of delicious restaurants lined up for every evening, consider advertising your services as a more modern approach to travel planning.
5. Home Inspector
Working as a home inspector requires certification and a great deal of expertise, but it can offer a flexible work schedule and stable income. Confirm the licensing requirements in your state before getting started with this type of small business. You’ll want to make sure you’re providing the best service to your clients by having all of your credentials in order.
6. House Cleaner
With a low barrier to entry, house cleaning can be a great way to start doing what you love — soon. Consider advertising to homes in your neighborhood and get more bang for your buck by earning a few small businesses as clients as well. They’ll usually bring in a higher paycheck for a similar amount of work.
Need some inspiration? This small business cleaning service grew virtually overnight on Instagram after their content went viral during the pandemic.
7. Personal Chef
We all love to eat, but few of us have the time or energy to cook healthy, delicious meals. Advertise your services to local families and businesses alike. To save on start-up costs, consider scheduling certain groups of clients together — say, vegetarians — so you can cook larger quantities of the same dish.
Chef Paul’s mouth-watering dishes are available to clients across the country. His clientele niche consists of athletes, corporate businesses, and local gyms.
8. Property Manager
Many people maintain properties they don’t live in — often based in different cities or states. As a property manager, you can help a property owner ensure their home is being well taken care of, handle small fixes as they arise, and serve as a liaison to renters.
9. Packing Services Facilitator
Moving is always a pain, and many people hire the entire packing process out. Want to have a steady stream of clients? Partner with a local moving service that will refer new clients to you.
10. Massage Therapist
Soothe aching muscles and promote peace for your clients as a massage therapist. Look into training and certification courses in your city and state and invest in a portable bed to take on client visits.
11. Crafter
Creating novelties by hand is a fun and unique way to start a small business. Whether you make jewelry, knitted comfort items, or even custom wigs , there’s probably a market for your products. Tap into your audience with creative marketing on social media and optimize your website for the search engine using keywords that describe the products you make.
12. Interior Designer
Similar to landscape design — there are many people who have the ability to buy the furniture and home decor they need to fill their rooms, but few who know where to start. It might take some time to build a portfolio but documenting your projects and sharing them online can build a fanbase beyond your wildest dreams.
Need inspiration? Check out Sandra Cavallo’s interior design Instagram account.
13. Nonprofit Owner
If you dream of devoting your life to a cause you believe in, it might be time to start a nonprofit. You’ll need to incorporate your business and file for 501(c)(3) tax-exempt status — and then you’ll be required to meet ongoing standards of compliance, but the payoff is making a meaningful impact on a cause you believe in.
14. Tour Guide
Love the local history of your city or state? Consider becoming a tour guide. Sure, you’ll need to conduct plenty of research to be able to do the job well, but that’s half the fun. Set yourself apart by offering tours that speak to a specific niche of your community’s history.
Some tour guides, like the ones at Freedom Trail in Boston , offer historical walking tours of their town’s most haunted spots while others curate guided foodie tours for guests to get a true taste of the city.
Whether you’re a math whiz, piano master, or Shakespeare aficionado, there’s someone out there who needs a little help in your area of expertise and is willing to pay for it. Advertise your services through local schools, community colleges, community centers, and even social media to get the word out and build a customer base.
16. Consultant
If you have significant experience in or knowledge of a specific subject, consider becoming a consultant. Perhaps you’re an expert at hiring practices, have a knack for SEO , or have led multiple sales teams to six-figure success. Identify your expertise and market yourself as a consultant and charge the going rate.
17. Event Planner
You might choose to specialize in a specific type of event — like weddings or company meetings — or set yourself up as an event planner of all trades. If you’re highly organized, are detail-oriented, and have experience planning large events, it might be time others benefit from your skills.
18. Personal Assistant
Again, if you’re an organized, highly-detailed person, the life of a personal assistant might be for you. Don’t want to be tied to one office or person all day, every day? Consider becoming a virtual assistant, which allows you a more flexible work environment.
19. Consignment Shop Owner
If you have an eye for style but don’t want to invest in the inventory of a brand-new boutique, consider going consignment. It will allow you to curate a collection of clothing that matches your goals and aesthetic, without the overhead of a boutique selling entirely new garments.
20. Caterer
If that personal chef gig is too restrictive for your schedule, consider catering instead. Pick your projects, work on fewer but larger events, and hone in on your time management skills.
21. Gym Owner
Kickboxing gyms, yoga studios, CrossFit, oh my! Turn your passion for fitness into a community for others by creating your own gym — start one from the ground up, become an affiliate, or open a franchise location.
22. Boutique Agency Owner
What’s your specialty? Whether it’s marketing, social media, or PR, it might be time to start your own agency. Many other small businesses need this type of help but don’t have the resources or volume to necessitate a full-time position.
Consider building a small team and learn from other entrepreneurs who’ve successfully started their own agencies, like Duane Brown of Take Some Risk .
23. Coffee Shop Owner
Turn your caffeine addiction into something a little more lucrative. Opening a franchise or buying an existing shop are lower-risk entry points to the coffee game but they usually require a little more cash upfront. Starting a shop from scratch requires a little more planning and a lot more work — but it also maximizes your earning potential in the future.
24. Moving Company
A truck, moving equipment, manpower, and the correct permits and insurance are the building blocks of starting your own moving company . Before you buy your first fleet of trucks, however, start small with a moving van and keep your costs low.
Still sound like too much of an initial investment? Consider offering packing services only, which have a much lower financial barrier to entry.
You could even take a niche approach to the industry as Astro International has by offering international moving services.
25. Home Staging
If you have a flair for interior design, a staging service might serve as your creative outlet and professional calling. You can build a portfolio with little initial investment by staging homes using the owner’s existing furnishings and decor. Most stagers eventually build up an inventory of furniture as they become more established and network with area realtors.
26. Makeup Artist
Many people prefer to have a professional do their makeup because they may lack the proper products or just the skills. It may be for a special occasion, photoshoot, or video shoot, or another event. Being able to do a variety of different looks will make your business more attractive to more customers.
27. Professional Organizer
A lot of people struggle with clutter or disorganization in their homes and offices. It can be a large undertaking to create systems and habits that will create continuous organization. Grab a lot of storage bins and a label maker and get started!
Meg Golightly, founder at Gosimplified has made this small business idea into a successful career.
These home business ideas give you a few more business options that are either based at home or online.
Frontend, backend, and every type of code in between, this skill requires no in-person interaction with your clients. But one skill you’ll want to carry over from the in-person world for this type of business is active listening. It can be easy to zone out while building a product, but developing a connection with the client is just as important as developing the code for their website.
If you keep the client top of mind when you can’t be around physically, you can ensure that you’re meeting their development needs with your coding work.
2. Vending Machine Owner
Since 2015, the growth rate for vending machine businesses has increased 1.4%. Even as social distancing restrictions are still in place, this business can still be lucrative if you choose the right locations. High-traffic is key — places like hospitals, schools, and community centers are smart places to start placing your machines to generate enough revenue to cover cost and turn a profit.
3. Social Media Manager
Do you have a knack for social media? As a social media manager, you can use your skills to manage the social media accounts for companies and even individual people. Influencer marketing has become more common and many influencers rely on marketing agencies or employees to help them run their social channels.
![→ Free Download: Social Media Calendar Template [Access Now]](https://no-cache.hubspot.com/cta/default/53/3e56e15d-47bd-46c9-a256-99fde52abfe7.png "build a business up")
4. Data Entry Clerk
Many businesses seek data entry clerks to help them enter information into their computer systems and spreadsheets. If you have strong computer and typing skills, this might be the business for you.
5. Audio or Video Editor
As of March 2021, there are 1.75 million podcasts available to listeners. For this reason, brands are turning to audio and visual content to connect with consumers. The catch is that many don't have the time to invest in the production of this content, or they don't have the skills to do it. Audio and video editors are in demand when it comes to producing quality content for hungry audiences.
6. Voiceover Artist
Speaking of podcasts and videos, many content creators recognize the value and level of professionalism that great voice talent can bring to a project. There are gigs out there for podcast intros/outros, narration for explainer videos, or even voice work for audiobooks. Learn how to get started with no experience from Kat Theo below:
7. Dog Walker, Groomer, or Trainer
Licensing and insurance will be the two most important factors in opening a dog walking, grooming, or training business, but your canine colleagues will surely make up for the initial red tape. To test the waters before jumping in, consider walking dogs through companies like Rover. Ready to run your own show? Consider a franchise like Dogtopia .
8. Candy Seller
If you grew up in a close-knit, southern neighborhood, you're probably familiar with the " Candy Lady ". This home business can be started by anyone who's trustworthy in the community. Aside from selling the most popular snacks, a candy seller can provide the neighborhood with fresh fruit and produce that may be harder to find if you live in a food desert.
9. Online Class Instructor
Tutoring is often done in person and with one client at a time. Remotely teaching an online class offers more flexibility because you can teach multiple students from home. English is a common subject for online classes because of how many people want to learn it. But anything that you have a mastery over could be translated to a virtual class.
10. Small-Batch Goods Seller
Using organic, all-natural ingredients is more expensive, but worth it. There are many products you can learn how to make at home without any preservatives, chemicals, or toxins. Candles, soaps, shampoos, and moisturizers are some examples of goods you can create and tailor with custom scents. Try starting out making soap with this complete beginner’s guide to soapmaking:
Whether you’re looking to start your venture today or you simply don’t want to jump through the normal hoops of launching a small business, the below ideas are extremely easy to start — so easy, all you’ll need to do is sign up on a website or tell your friends about your services.
1. Vacation Host
Have you ever used a home-sharing service instead of a hotel? You could make a living by hosting visitors in your own home or renting out a room. Consider becoming a host with companies like Airbnb .
2. Pet Sitter
Do you have a passion for pets? Consider becoming a pet sitter. While the pet's owners are away on vacation, either host their pet at your home or make visits to their home. Join a pet sitting service like Wag to get started.
3. Daycare Owner
Childcare continues to be in high demand. While nannies and nanny shares are popular right now, a good daycare is hard to find. Fill a need in your neighborhood by opening your own. And, as always, make sure you’re complying with your city and state’s zoning, licensure, insurance, and inspection requirements.
If there’s a topic you have a heavy interest in, then there’s an audience out there with a heavy interest in it too. A blog can be used to build an online community whose engagement can be monetized. Affiliate marketing , sponsored content , and co-marketing are some ways to make money once your blog develops a following.
5. Home-Baked Goods Seller
Warehouse-made, store-bought chocolate chip cookies will never compare to a batch made with love in someone’s home. Simple desserts can be easily baked and packaged to sell at local events or around your neighborhood. Use custom labels and watch the word spread about your goods!
Is your head buzzing with small business ideas yet? After all that brainstorming, you’ll need a practical plan to get started with your new small business.
- Identify your small business idea.
- Start as a side business or hobby.
- Decide on your software.
- Create a business plan.
- Decide whether you'll be an LLC or sole proprietorship.
- Create a business bank account.
- Determine if your business idea works well from home.
- Set up an office.
- Get to work!
1. Identify your small business idea.
Whether you choose an option from the list above or have another idea up your sleeve, it’s important to have the experience, training, or skills necessary to be successful. Want to run a daycare but have never even visited a successful daycare center? Spend time conducting research to learn whether this is really the right fit for your experience, interests, and target audience.
2. Start as a side business or hobby.
Can you get your business off the ground as something you do in the evenings or on the weekends (a.k.a. a side job)? This allows you to make some mistakes, test the market, and understand whether your idea has legs before you quit your nine-to-five job and lose your primary income.
3. Decide on your software.
You’ve got a lot of things on your plate when first starting up. But one step that’s critical (and often forgotten by first-time entrepreneurs) is deciding on the software that can help you be more efficient as your business grows.
Every business is different — but almost all companies can use software to help with analytics, project management, accounting, bookkeeping, email marketing, and other basic day-to-day tasks.
One of the most important software tools every small business should utilize is a free all-in-one CRM platform to keep track of important customer information in one central database. It will help align your team and make sure you stay organized as your business grows.
4. Create a business plan.
No business plan? No business. Particularly if your small business idea requires investors, you'll need to draft up a business plan to provide an overview of your market positioning, your financial projections, and your unique competitive advantages. You can download HubSpot's free business plan templates for free to get started.
Download Free Business Plan Templates
Your business plan should include the following elements:
- Executive summary — A high-level overview of your company and market placement.
- Business model — Outline what your business does, who your business serves, and how your business is structured. You should include a description of what products and services you offer, and how they meet the needs of your customers.
- Market condition — A summary of pertinent competitor information. Determine the strengths and weaknesses of your closest competitors.
- Products and services — Use this section to describe your products and services in detail, and outline what differentiates your product from others in the market.
- Operations and management — Outline your business’ organizational structure, key roles, and responsibilities.
- Marketing and sales strategy — This section should describe how you will market and sell your product. Include information on your ideal customer, how you plan to position your offering, and your sales strategy.
- Financial plan — Create a detailed outline of your business financials. Include your start-up costs, your initial financial productions, and how you anticipate generating funding.
- Appendix — Once the above pieces are complete, end the document with an appendix summarizing your business plan.
5. Decide whether you’ll be an LLC or sole proprietorship.
Two common legal structures for small businesses are limited liability corporations (LLCs) and sole proprietorships.
An LLC is a more complex business structure than a sole proprietorship and can include individuals, corporations, and other LLCs as members. Additionally, LLCs are not subject to a separate level of tax and offer the business owner liability protection and tax advantages. LLCs are formed on a state-by-state basis.
Sole proprietorships are businesses owned and operated by one person and are not identified as a separate entity from the owner by the government. While a sole proprietorship is the simplest business structure, sole proprietors are personally liable for their business.
Besides an LLC or sole proprietorship, there are a few other options for you to consider.
Sean Flannigan, Sendle's Content Manager, says, "While many small businesses might be best served by choosing an LLC or sole proprietorship, there are a few other options."
"Partnerships are great for businesses operated by several individuals. It hews most closely to a sole proprietorship in that the individuals take on the business liability and pay taxes on a personal level."
He adds, "To completely avoid personal liability, small businesses might choose to incorporate as a corporation, S corporation, or B Corp. S corporations avoid corporate taxation whereas B Corps must meet a threshold for public benefit and accountability."
Additionally, Flannigan says, "There are tons of great reasons to become a B Corp beyond just doing good business. All that said, many small businesses that aren't aimed at super-fast growth choose to go with an LLC to keep things simple while shielding owners from too much liability."
Learn more about choosing the right structure for your business from the Small Business Administration.
6. Create a business bank account.
Once you have a legally formed business and have been issued an Employer Identification Number (EIN), open a bank account specifically for your business. Having a business bank account is essential for keeping your personal and business finances separate which can help you gain an accurate picture of your business’s cash flow and financial health.
Additionally, keeping your personal and business finances separate makes bookkeeping and tax preparation easier.
Many banks offer business checking and savings accounts. Business checking accounts typically do not have a limit on the number of transactions that can take place, and issue a debit card that can be used for making business purchases. However, these checking accounts do not accrue interest.
Business savings accounts typically earn interest over time but have a limited number of transactions that can occur each month. When you’re just starting out, look for a business bank account that does not have a minimum balance requirement so you are not penalized for having low funds as you work to build your business.
7. Determine if your business idea works well from home.
Ask yourself whether your business idea will work well from home. Some businesses simply aren’t suited to be based from home. If you want to run a dog boarding center but live in an apartment without a backyard, you might want to consider a dog walking business instead.
8. Set up an office.
If your business idea is well-suited for being run from home, it’s still important you have a designated workspace. While a home office might not be possible, consider setting aside a corner in your living room or putting a desk in your bedroom for a space that inspires you and creates the conditions for success.
Need a more professional space? If you conduct client-facing work requiring you to be on video calls, no one wants to see your rumpled sheets in the background. Check out local coworking spaces for memberships that earn you access to conference rooms, desk space, and more.
9. Get to work!
You’ve put in the hard work and I’ve got good news — it’s only going to get harder. But most entrepreneurs will agree that the payoff of being your own boss, making your own hours, and working on projects that you’re passionate about will pay dividends for the rest of your life.
Starting a Small Business: FAQ
What are the types of small businesses.
The types of small business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Which business type is best?
The best business type is a limited liability company (LLC). Operating as an LLC means that your personal assets are separate from your business assets. If your business goes bankrupt, your personal holdings won’t be affected. That said, it’s also one of the costlier types, requiring a fee paid to the state.
The easiest business type to start is a sole proprietorship. The main downside is that there’s no differentiation between you and your business.
How do I create a business idea?
To create a business idea, determine your skill set, work preferences, startup budget, and available resources. It’s important to strike the right balance between what you can feasibly offer and what you can feasibly afford in the short and long term.
We recommend starting with your skill set so that you can easily determine the niche in which you can effectively compete. For instance, if you have ample experience as a writer, you might consider starting a freelance writing business. But if you know you’d prefer to work with clients face-to-face, you might choose to start a ghostwriting business instead. That’s why it’s so important to take your work preferences into account, as well.
After that, take a look at your budget and determine the type of business you can start based on the resources at your disposal. For instance, you might not be able to afford a physical office or location, so a location-based business will likely not be a good fit. In that case, starting an online business is your best option.
What are some of the most successful small businesses?
Every small business has the potential to be successful and profitable, provided it’s backed by a strong product-market fit and a robust business plan . These two elements are essential. Maybe post-natal services are one of the most successful small businesses to launch, but if you live in an area with declining population or a large elderly population, then that small business idea won’t yield a high return on investment.
Think carefully about the market where you’re launching your business, and you’ll be more than likely to see lasting success.
What are the top growing small businesses?
The top growing industries are healthcare support, technology, personal care, food preparation, and community and social service. As such, launching a small business in any of these fields is bound to yield a high return on investment, but remember to take your target market into account.
Here are some small business ideas for each of those industries:
Healthcare Support
- In-home care assistant
- In-home elderly care provider
- Psychological care provider
- Pre-natal and post-natal support specialist
- Freelance programmer or web developer
- Freelance IT support specialist
- Freelance cybersecurity expert
Personal Care
- Hair stylist
- Nail technician
Food Preparation
- Personal chef
- Food truck owner
- Food delivery
Community and Social Services
- Non-profit owner
- Education specialist
Brainstorm Your Next Small Business Venture
Selecting a small business idea to work on is a personal decision. Money is important, but you’ll need more motivation than that to keep going. Bounce ideas off your friends and family until you reach the perfect idea that works for your schedule, fulfills your life’s passion, and makes financial sense. Don’t be afraid to ask for help throughout this process — and remember to have a little fun while you’re putting in the work.
Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.
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