Learning & Insights
8 tips to start your business on solid ground
You've got a great business idea and now you're ready to put that idea into action. Where do you start? Here are eight tips to help successfully start a business.
1. Create a business plan
Before you do anything, create a blueprint for your business—or what we call a business plan. This will help you take your business idea from thought to action. Here's where you'll define your vision, mission and objectives for the growth of your business. Write everything down and update it as your business grows and develops.
2. Determine your business structure
Several options are available, including a sole proprietorship, limited liability company (LLC), corporation or partnership. Your choice will impact your business in different ways, but specifically in how you file taxes. It's a good idea to talk to a trusted attorney or CPA to help make the right choice for your business.
3. Prepare for initial and ongoing expenses
No matter what type of business you start, it'll require some initial investment. Estimate your one-time start-up costs, such as a business license or permit, commercial lease, equipment, insurance, marketing, inventory and legal fees. You should also anticipate what you'll pay to keep your business running for at least a year—from paying for rent and utilities to advertising costs and salaries. If you need a loan to help, talk to your business banker to help find the right loan to meet your needs.
4. Select a name and register your business
The name you choose for your business is likely to be one of the biggest initial decisions you'll make. Think through all the potential implications of your name, including how you may brand it in the future and whether it lends itself to a memorable website address.
Check to make sure that your prospective name isn't currently in use or trademarked. Once you've settled on the name, you'll need to register your business with the appropriate entity, and pay the necessary business license and permit fees. Also, remember to register a domain name for your website, and make arrangements for hosting your site.
5. Purchase an insurance policy
While you may not think of it at first, it's a good idea to have business insurance from the first day you open your doors. As you grow and expand, you can add to your policy, but you should make sure you're covered with the basics from day one.
6. Choose an accounting system that makes sense
As a small business owner, you're responsible for keeping track of everything for your business. With that in mind, it's important to have an accounting system to track your budget, set your prices, send invoices and collect receivables, and even file your taxes.
There are several good accounting software programs available; however, you may consider hiring a CPA to help you get started and assist you by managing your month-end, quarter-end or year-end reporting and tax preparations.
7. Market your business
Your business plan should include a section describing how you intend to promote your business—or what's typically called a marketing plan. Once you're open for business (or even right before), put that plan into action. Your marketing plan should look at all the ways you may advertise your business and will include a schedule to follow based on the budget you've established. A marketing plan is a living document, so you'll want to review it at least quarterly to make sure you're reaching your desired goals.
8. Hire your employees
If you're going to hire employees, you need to start the process as early as possible during your startup. Create a clear and concise job description for each role, and get the word out that you're hiring. If you're using independent contractors instead, work with an attorney to develop an agreement you can use for each person (or entity).
The bottom line
You may not follow these steps consecutively, but each are important actions to consider when starting your small business. Remember to be patient—success doesn't happen overnight. You can, however, increase your chances for success with careful planning, thoughtful decision making, and consistent follow-up.