How To Make Your Own Business: A step-by-step guide to Start a Business from scratch

Don’t let your dreams of starting a business remain dreams. With this step-by-step guide, learn how to make your own business and start achieving success today!

It’s no secret that the business world is “booming” right now. Businesses are springing up all over the place, and that’s great news for ambitious entrepreneurs. However, it can be a little daunting to know where to even begin when thinking about starting your own business. Thankfully, Discover Your Strengths is here to help! 

Starting your own business can be challenging and exciting at the same time; however, there are a lot of factors you need to consider before taking that final leap. In this blog post, we will cover everything you need to know before you start making your own business happen.

Why You Should Start Your Business – Here Are Some Statistics:

“When it comes to starting and running a business, the numbers don’t lie. This year, 65% of business owners reported being profitable at the time of our survey – even when more than half of them are 5 years old or younger. Success is possible if you are willing to put in the hard work.”

— Guidant Financial.com

Starting your own business can be an invigorating and rewarding experience. As you consider taking the leap, there are certain important considerations to keep in mind. Statistics demonstrate that only 65% of small businesses in the U.S. are actually profitable. Of those business owners, it is estimated that only 2% have a doctorate degree, while 7% have a professional degree. What this tells us is that you don’t need a high level of formal education to create a successful venture.

When it comes to why people become entrepreneurs, 22% said they weren’t ready to retire yet. An additional 31% chose entrepreneurship to pursue a passion, and 47% wanted to be their own boss. In 2021 alone, nearly 5.4 million new businesses were registered — a 23% increase compared to the previous year — and nearly 543,000 new businesses were created each month. With those kinds of numbers, you can see why 78% of small business owners claim their businesses are profitable.

Starting a business varies based upon where you live. For example, in New Zealand, it takes just one day; two days in Canada; three days in Australia; five days in the UK; and six days in the US. It can often be easier to start a home-based business, as they typically involve fewer regulations when compared with brick-and-mortar stores, and also require a decrease in overhead costs. Many small business owners choose retail or food as their industry, as those are two of the most popular and least complicated industries in which to operate.

The dream of owning your own business can come true, but you need to be aware of the realities of starting and running a business before committing to the endeavor. Be sure to carefully research both the process of launching your business and the specific industry in which you want to work before making any decisions.

How to start a business: 14 Easy Steps

Starting a business is an exciting journey. Every entrepreneur starts with a dream and the promise of success, but getting it off the ground can be difficult without the right guidance. This article will provide you with 14 easy steps to help get your business up and running smoothly, quickly, and successfully. So, get ready to take your entrepreneurial venture to the next level!

1. Conduct market research

Before you begin the process of launching your own business, it is important to conduct – market research. Conducting market research is an essential tool for any new business. It gives businesses the information they need to make informed decisions about their launch, from understanding the competitive landscape to determining the target demographic and ideal product features. 

Benefits of market research 

There are many benefits to conducting market research while starting a business. The major one’s are mentioned below

Research helps to identify opportunities and threats 

Through research, you can analyze the business environment to help identify potential opportunities and threats in your industry. 

Research helps to understand your competitors’

Market research can help you better understand who your competitors are, where and how they sell their products or services, and how much they charge. 

Research helps to understand customer needs and Wants

The research will also provide an understanding of customer needs and wants so that you can create a product or service that appeals to them effectively. As a result, it is essential to take the time to do comprehensive market research.

Market Research Methods

Some methods of conducting market research include surveys and interviews with customers, sales data from retailers, industry reports compiled by independent organizations, competitive intelligence on rivals’ strategies and performance, focus groups for testing new ideas and concepts, reviews of trade magazines/journals to spotlight evolving trends/developments in the industry. 

Additionally, consider looking into government resources such as census data or economic analysis from regulatory agencies. 

Taking all these steps will require some effort and a commitment of time; however, it is an invaluable step for anyone who is looking to launch their own business. 

2. Write your business plan

Writing a business plan is an ‘important first step’ in starting your own business. A well-written plan will help you identify your goals, target customer base, and overall strategies to promote and grow your business successfully. It should also provide a clear – roadmap for development and set realistic expectations for success.

Things to consider when designing a business plan

In preparing your solid business plan, you will need to answer key questions about your business concept and the potential opportunities it may offer. 

These include:— identifying potential customers; conducting market research; analyzing competitors; understanding customer needs; setting goals and objectives for growth; creating financial projections; clearly defining ownership structure and management roles; developing a marketing strategy; assembling documents such as permits, licenses, etc.; evaluating risks associated with start-up operations.

It’s also important to consider the legal aspects of setting up a business. You should be familiar with relevant laws and regulations in your region that may impact the formation of a company (e.g., tax laws). 

Additionally, consider researching the benefits available to small businesses such as grants or tax incentives that could help support startup costs — or invest in new technology or equipment.

What to include in the business plan (Components of a business plan)

Your written business plan should include a detailed description of your products or services, team members involved in running the business including their roles & responsibilities, location plans & preferences as well as long-term plans & strategies for growth & sustainability. 

It is advisable to speak with an accountant or lawyer( or any professional) who can offer advice on legal structures and how best to protect yourself legally in case of any unforeseeable eventualities along the way. 

Finally set realistic expectations for growth when creating financial projections – remember you have to crawl before you walk!

3. Fund your business 

Once you have decided on the type of business ( after researching the business ideas and its potential markets) you are going to start and have created a plan for success, you need to figure out how to fund your business. A lot of new businesses fail due to the lack of funds prior to turning a profit. To secure funding for your business, you will need to consider all available options before deciding which approach is best for you.

Ways to finance a new startup or venture

Traditional and non-traditional financing options

There are several traditional ways to finance a new venture, such as securing small business loans or issuing stock and bonds. However, don’t overlook non-traditional options such as angel investors. By providing funding in exchange for an equity interest in the venture, angel investors can offer much-needed cash with fewer strings hooked than institutions.

Crowdfunding

Start-up financing may also come from crowdfunding websites like Kickstarter or GoFundMe which enable individuals or groups to collect contributions online. 

Government grants and other alternatives

Other alternative sources of finance could include grants from the government or other organizations that specialize in small businesses or low cost financing such as microloans at established banking institutions.

Before taking any financial steps, make sure that your business plan includes complete financial projections such as expected profits and losses over a certain period of time and cash flow projections so that everyone involved knows what they can expect when it comes time to make financial decisions about your business.

4. Pick your business location

One of the key decisions to make when starting a business is finding the perfect location. This is especially true for brick-and-mortar businesses where the physical aspects of your store will have direct influence over its success. 

Factors to consider when choosing a business location

Before picking out a location, there are several factors you need to consider.

Location: Make sure that the location you choose is convenient and easily accessible. You should factor in traffic patterns, nearby amenities, parking availability, and visibility when selecting your place of business.

Neighborhood: Pay attention to the demographic makeup and cultural attitudes of your prospective neighborhood. 

• Are there similar businesses nearby? 
• Will they be competing or complementing yours? 
• Do residents there share an interest in your products and services?

Consider the answers to these questions.

Rent: Weigh what rent you can truly afford between budget and production costs versus how much space you will need based on projected usage and future growth plans. Make sure that facilities such as air-conditioning, heating, and plumbing are up to date so that they don’t become unexpected extra costs down the line.

Ultimately, picking an appropriate business location is vital for long-term success so take the time to research accordingly before determining where to house your establishment.

5. Choose a business structure

Starting a small business is a complex process that requires careful planning, research, and thought. It’s important to take the time to ensure that your business has the best chance of success. 

One of the most important considerations is choosing a business structure. This will impact how you manage your finances, pay taxes and allocate liability protection.

Types of business structures

The six main types of business structures are: –sole proprietorship, partnership, limited liability company (LLC), corporation (both Subchapter S and C corporations), cooperatives and nonprofit organizations. 

The best structure for your business depends on a range of factors including: purpose; location; the number of people involved; structure of ownership; finances; legal requirements; taxation rules and regulations. 

If you’re unsure which option works best for you, it’s recommended that you speak with a lawyer or accountant (or any professional who is an expert in this subject) to help steer your decision in the right direction.

Sole Proprietorships

Sole Proprietorships are businesses owned by an individual or married couple without forming a separate legal entity from themselves. They are typically unincorporated businesses which means that owners have personal responsibility for debts relating to their businesses as well as potential risks associated with litigation claims against them personally.

Partnerships

Partnerships are legal entities created by two or more individuals who carry on business together with profits or losses shared among them according to their partnership agreement. 

The partners in the company jointly own its assets and liabilities as “joint tenants” rather than individually as sole proprietors do making all partners legally responsible for any debts the company may accrue in relation to its operations and existence.

Limited Liability Companies (LLCs)

Limited Liability Companies (LLCs) represent another form of incorporation which gives all members limited personal liability while still proving certain flexible tax advantages usually found in other forms of ownership such as partnerships. 

LLCs may provide tax advantages compared to conventional corporation structures when filing state taxes since members do not pay any corporate income tax instead entering into pass-through taxation where profits/losses pass through directly onto each owner’s personal taxes reducing financial stress at year-end filing deadlines when trying to minimize global taxes owed and maximizing deductions for self-employment income earned due LLC status on personal returns.. 

Additionally LLC owners can elect different forms of distributive income allocation like S Corporations if desired during their annual reports without having to create additional subsidiaries which could help them lower their self employment contributions significantly compared other types traditionalist companies at year-end filings depending upon geographical locations tax laws/regulations necessities come into play when considering formation type selection

6. Choose your business name

Choosing your business name is an important first step in developing a professional brand for your new venture. Your business name should accurately convey the products and services you offer and it should be memorable. 

It should also be easy to spell and pronounce while avoiding the use of numbers or underscores. Be sure to check that your chosen business name has not already been claimed before trademarking it with your national governing body. 

Additionally, you will have to make sure that no one else – including both individuals and businesses – has already claimed an Internet domain with the same or similar name. Once you have chosen a suitable business name, it is recommended that you register it as soon as possible in order to protect it from being used by someone else in the future. 

The rules for naming businesses vary depending on where you are located, so be sure to check with any relevant local authorities if necessary.

7. Register your business with the government and IRS.

Before you officially start running your business, it is important to make sure that it is properly registered with the government and Internal Revenue Service (IRS). Depending on the business type and where it is located, you might need to file for a business license or registration. 

It is also essential to acquire employer identification numbers (EINs) from the IRS. This will ensure that you can pay taxes on any revenue generated by your company, as well as use your EIN when opening up a business bank account. 

In addition to the federal EIN number, it is also important to get a state tax identification number (state tax IDs – if required by your state). Every state has its own requirements when it comes to registering a business. Most states require businesses to have a state-level employer identification number in addition to the federal EIN. Most states have their own agency that issues this ID number called the Department of Revenue or Department of Taxation.

Additionally, registering with both the state and federal governments will allow you to receive legal protections including insurance against liabilities or employee disputes. 

Once you have acquired all of these necessary documents, then you are ready to move forward with starting your own small business.

8. Apply for business insurance

Acquiring business insurance is an important step to take when starting a business, as it helps ensure that your venture is protected in the event of an unexpected loss. 

Various kinds of business insurance policies

Depending on the type of business you plan to operate, there are a variety of types of insurance policies you may need to consider.

General Liability Insurance: 

This type of policy protects your business against potential claims arising from third party property damage, bodily injury, personal injury or advertising injury. They are ideal for businesses who provide products or services directly to customers, as these claims can easily arise from these types of interactions.

Property Insurance: 

This policy is designed to protect your physical assets in case of loss due to unforeseen circumstances such as fire and theft. It is important for businesses that own leased or rented facilities, tangible assets and/or expensive equipment or machinery.

Workers’ Compensation Insurance: 

For those businesses with employees, this type of policy provides income payments and medical coverage in the event an employee becomes ill or injured due to conditions involving their job duties. It helps protect both employers and employees from legal disputes arising from workplace accidents and injuries.

Business Interruption Insurance: 

Interruption insurance is designed to cover financial losses resulting from events outside of your control that disrupt normal operations by preventing customers from accessing your services or products and/or stopping production processes temporarily. It can help recoup lost profits and pay expenses while waiting for normal operations to resume.

Professional Liability Insurance: 

Also known as errors & omissions (E&O) insurance, this type policy covers risks associated with professional activities such as negligence, misrepresentation or malpractice while providing professional advice or services. Professional malpractice claims can arise at any time regardless if damages were intentional by not – E&O insurance helps protect against such legal claims being filed against your business.

9. Apply for licenses and permits

For most businesses, you must apply for a variety of licenses and permits in order to operate legally. Depending on your industry and the regulations in your location, this may include both federal and state tariffs. The process of obtaining these documents can be complex, so it is important to make sure that you have taken the time to understand all of the applicable laws and regulations before submitting your applications.

In some cases, you may need special licenses or permits that are not available through general application procedures. Consulting with a local business attorney may be necessary if you have any questions related to obtaining specific licenses or understanding particular laws in your area. Additionally, some jurisdictions require businesses to apply for a local business license in order to operate.

Applying for the required licenses and permits is an important step in becoming a small business owner that should not be overlooked prior to opening your doors for business. Failing to obtain them could result in severe legal consequences such as fines or even jail time if certain regulations are broken knowingly or unknowingly. Taking the necessary precautions upfront will help ensure that your business remains on solid legal footing once open for operation.

10. Open a business bank account

Opening a business bank account is a critical step in setting up your own business. Not only will it help you manage your finances more efficiently and professionally, but it also serves as an additional layer of legal protection for your company’s operations. 

Whether you’re just starting out or have been running for a few years, having a separate bank account for business transactions can make accounting easier and provide peace of mind. 

Things to do when opening bank account

Here’s what you need to do:

1. Select your bank: Choose the financial institution that best meets your needs, such as one with convenient locations, competitive fees and attractive interest rates. Consider an online-only solution if looking to save on monthly fees.

2. Gather documents: Have the following documents on hand when opening the account—business license/permit or documentation showing that you’re legally allowed to conduct business in your jurisdiction, resident state-issued photo identification card, social security numbers of owners and other decision makers listed on the application form.

3. Submit paperwork: Depending on the account type you are opening, banks may require some form of corporate filings to open a business account; complete the application in its entirety along with any other forms necessary to open an account at the selected institution.

4. Provide funding: Depending on how much money you plan to keep in your company’s account and what services you will use most often, there may be certain minimum balance requirement associated with certain banks— make sure that these requirements are comfortable levels before moving forward with setting up the new bank accounts

5. Get set up: Once approved, visit the branch office (or virtual signup) to obtain debit cards and checks needed alongside any other important items/details regarding operation such as direct deposits as well as cyber security measures like Digital Banking ID Protection Management Tools offered by some banks which provide further secure login factors over traditional usernames and passwords; follow procedures outlined by bank teller if signing up online instead of in person

11. Hire employees and build your team

One of the most important steps in creating your own business is to hire employees and build your team. Your team will be the foundation of your business, and without the right employees, your business won’t succeed. While it may take some time and research to find the ‘right people for the job’, it’s worth it to hire people that you know will bring success to your company.

Things to keep in mind when hiring employees

When you’re hiring employees, make sure you keep in mind who will be best suited for each job role. Ask yourself what qualities or knowledge sets each potential employee has that could benefit your business and make them a valuable addition to your team. 

Furthermore, think about what kind of environment they should be working in — you want someone who is polite, reliable, committed to their job, and works well with others. To ensure a successful hire process, utilize resources such as job placement agencies or employment websites that can help you narrow down each candidate’s qualifications more thoroughly.

Additionally, before opting into any hiring process make sure all legal matters are taken care of – this includes making sure all paperwork is properly filled out and that taxes are taken into account if applicable (depending on where you do business). 

Once everything has been finalized – offer up competitive wages for a given position – this will help attract better-qualified candidates for the job! 

Finally, provide enough training for each hired candidate so they feel comfortable with their new role from the get-go – this can make all the difference between an employee feeling secure in their work or not. By taking these steps when building a team you will likely see even greater success when launching or operating a business!

12. Choose your vendors

You will need to select the vendors who will be supplying the goods and services necessary to run a successful business. Choosing the right vendors is critical; they must be able to provide quality products or services, deliver on-time, and offer competitive prices. You also need to consider whether they have customer service and technical support staff available when needed.

Be sure you take time to research potential vendors, compare their offerings and read reviews from other customers before making a commitment. In addition, it’s beneficial to meet in person – if available – with representatives from each vendor so that you can ask questions and get more detailed information about their products or services. 

Once all due diligence is complete, then it’s time for you to sign a vendor agreement that specifies the terms of your dealing with them – including payment details and return policies.

13. Launch website and promote your business

Launching your website and promoting your business is an important step in the process of starting a business. Having an online presence is a great way to market the products and services you offer, make connections with potential customers, and reach a larger market. 

Tips on launching your website

Here are some steps to help you launch your website and promote your business.

1. Choose a domain name: After selecting an appropriate domain name for your business, register it with a web hosting provider or domain registrar. Your web hosting provider will provide the space on their server to store your website files, while your domain registrar will provide the address to access those files.

2. Design and build your website: If you don’t have any experience in web design or don’t have the time for building it yourself, there are plenty of services that can help you do this easily and efficiently.

3. Optimize content for search engines: Make sure all pages on your website are optimized for search engines by using keywords in titles, descriptions and metadata fields that accurately describe what each page is about.

4. Promote on social media: Utilizing social media platforms is crucial nowadays as almost everyone has an active profile on at least one of them. Start creating quality content that resonates with audiences likely to be interested in products or services you offer, along with sharing information about promotions or discounts that could benefit customers if they choose to purchase from you online

5. Utilize email marketing: Email marketing can be used as a powerful tool for digital promotion because it allows businesses to get involved directly by reaching their target audiences directly in their inboxes by offering them something valuable such as exclusive discounts or promotional offers

6. Set up digital advertising campaigns: Digital advertising campaigns can be created easily by utilizing popular websites such as Google Ads, YouTube Ads, Facebook Ads etc., where businesses can publicly showcase why potential customers should shop with them or visit their websites by listing benefits they offer such as trustworthiness / durability / economical / safety/etc

14. Grow your business

It’s time to take your business to the next level by growing it. Growing a business involves analyzing, anticipating, and adapting to market trends in order to reach new customers, increase revenue, and maintain a competitive edge. 

Steps to develop an effective growth strategy

Taking these steps will help you develop an effective growth strategy:

1. Monitor the marketplace: Keep an eye on industry news and consumer trends by reading both industry and consumer publications as well as reporting from relevant websites.

2. Analyze customer needs: Learn all you can about your target audience and better understand their wants and needs by conducting surveys and focus groups or by gathering feedback from existing customers.

3. Set realistic goals: Determine specific goals for your company’s growth that are attainable over the short-term (one year) as well as longer-term (three years) periods of time.

4. Develop strategies: Create an action plan for achieving each goal, taking into account financial requirements, internal resources, personnel requirements, potential issues or obstacles that may arise during implementation, etc.

5. Evaluate progress: Regularly track progress against set goals using a combination of measures such as sales numbers, customer feedback/reviews, website visitors/traffic/conversions, etc., so you can make informed decisions about tactics or course revisions when needed in order to maximize the success of your efforts in each area of growth strategy

FAQs – Related to starting a small business

What are the Best States to Start a Business?

The best states to start a business in 2023 are; Indiana, Colorado, North Dakota, Pennsylvania, and South Dakota, respectively.

Indiana ranks #1 state to start a business in 2023. It offers a top-notch business climate due to its low taxes, affordable cost of living, ready workforce, and ample funding opportunities. With a flat tax rate of just 3.23%, a high business survival rate, and $13.1 million in small business funds available (reported by the Small Business Administration) last year, Indiana is the best state to start a business for those looking for an environment that’s both supportive and competitive.

Colorado is an attractive business state due to its low business formation fees of just $50 for an LLC, allowing businesses to be launched in highly restrictive industries. While income and corporate tax rates of 4.55% and 24%, respectively, are slightly higher than in other states, the average survival rate for businesses in the state serves as a form of insurance for entrepreneurs.

North Dakota is an attractive option for businesses that prioritize low taxes and generous funding. With its corporate tax rate of 4.31% and the personal income tax rate of 2.1% (the lowest in the country), it offers unparalleled business-friendly conditions. On top of this, entrepreneurs in the state receive the highest average funding per business, at $34,894 – nearly 50% higher than the national average. Clearly, North Dakota is a great place to start a thriving business.

Pennsylvania is an ideal state for entrepreneurs to start a business, offering higher than average funding per business with $27.7 million in loan funds available, double the national total. This coupled with its numerous resources makes Pennsylvania increasingly attractive for startup businesses, boasting an average amount of funding per small business that is 20% higher than California and 17% above the national average.

South Dakota offers an attractive business climate to entrepreneurs thanks to its 0% income tax, 21% corporate tax rate, high availability of financial resources, and cost of living that is 5% below the national average. Furthermore, South Dakota has a higher than average business survival rate, plus a spending power on elastic goods that is stronger than other states like New York. Altogether, this makes South Dakota an enticing place for starting a business.

What small businesses are popular right now?

Small businesses are currently popular due to their ability to meet customer needs quickly and at a lower cost. Services such as cleaning, freelance writing, daycare, pet grooming, and food delivery are common within this sector and continue to gain traction. Growing demand for these services has resulted in a steady increase in small business startups over the past few years.

Is it possible to start a business with no money?

Starting a business with no money is not impossible. In fact, research shows that the majority of businesses start without any capital. While difficult, it is possible to succeed when utilizing resources such as personal lending, crowdfunding, and finding partners with deep pockets of opportunity. With some determination and resourcefulness, entrepreneurs can make their dreams into reality even with limited capital.

How do I create a business idea?

Creating small business ideas is a process that involves the right blend of knowledge, research, and creativity. The most successful business ideas are often those that ‘solve a specific problem’ –or ‘meet existing demand’ in the market. By analyzing market trends, conducting market research, and staying up to date with industry changes, entrepreneurs can develop strong business ideas that have the potential to become successful businesses.

What is the easiest business to start?

Starting a service-oriented business is the easiest option for entrepreneurs. Data shows that fewer resources and regulations are required for this type of venture, making it an ideal option for those looking to get their feet wet in the business world. On average, businesses of this type require less capital, fewer complicated regulations, and shorter launch times than those that involve selling products. With the right service, entrepreneurs can launch their businesses quickly and start generating revenue promptly.

Bottom Line

Starting your own business is no easy task. By following some of the steps outlined in this guide and having determination, you can make your business dreams come true. Having a solid plan, ample resources, and an understanding of the risks will help to ensure success. Remember that every business venture carries with it uncertainty and that planning ahead for any bumps in the road can make all the difference in seeing your business succeed in the long run.