How to Start a Business in 11 Steps in 2022

30-Second Summary

-  There are many factors that go into starting a business.

-  Business owners should ensure they have the right organizational structures, legal structures, business management software, and the right team to be successful.

-   With the right foundations in place, a business can thrive.

Whether you are a seasoned entrepreneur or just starting with your first business, below are 11 steps each business must do to get started:

Step 1: Find a business idea

The first step in starting a business is figuring out the product or service you’d like to provide to the public. This can be done by exploring your own set of skills and expertise then deciding which would be valuable to provide to other consumers or businesses. Are you an organized accountant? Consider providing bookkeeping and accounting services to small businesses. Are you an efficient carpenter? Consider selling furniture or cabinets in your own shop or using any of these eCommerce sites.

Step 2: Conduct market research

It’s important to conduct market research to ensure there is enough demand for your offerings and that the competition is not too crowded. Additionally, market research will provide key demographic information on your target customer, such as their age, gender, location, income, and education.

Market research can be conducted by reviewing existing sources that can be found on the internet. You can also conduct your own market research by engaging with customers directly through focus groups, interviews, and surveys.

Step 3: Create a business plan

Creating a business plan allows you to examine every detail of your business and ensures you have a strategy in place for when you go to market. Additionally, having a well-thought business plan will attract investors when you begin to seek funding for your business. A stellar business plan should include but not limited to the following:

●   Company name and description

●   Mission statement

●   Market analysis and customer segmentation

●   Management team and structure

●   Products and services

●   Marketing plan

●   Logistics and operations plan

●   Financial plan

Step 4: Open a business bank account

Once your business starts earning revenue, you’ll need a safe and secure place to deposit all those hard-earned dollars. Additionally, a separate bank account for your business will help you keep your finances organized. When deciding which bank to go with, you should keep a few things in mind when choosing an account.

●  Pick a checking account with no or low monthly fees

●   Find a bank with multiple locations and convenient hours of operation

●   Online and mobile accessibility for money management on the go

Step 5: Fund your business

Funding your business can come from multiple different sources. You might have the capital saved up from your personal savings, however, running a business can get expensive. It’s common for business owners to seek funding that doesn’t involve spending their own personal savings. Other options for funding may include pulling business loans, crowdfunding, or seeking investors.

Step 6: Business Structure

A business structure will determine your legal obligations in the region you are operating in. This will affect everything from your liabilities to the taxes you owe come tax season. It’s an important decision, and one that you should consider carefully before launching.

Your business structure will vary based on the country and state you are located in. However, there are many common types of business structures such as a sole proprietorship, limited liability company (LLC) and corporation. If you’re unsure which is best for your business, it might be wise to seek guidance from an accountant or a lawyer on a structure that best suits your business needs.

Step 7: Get your tax IDs in order

Once your business has been structured, you’ll need a federal tax ID. This is also referred to as an employer identification number (EIN). This ID is a 9 digit number assigned to your business from the IRS for tax purposes. To apply for an EIN, you’ll need to go to the IRS website and fill out an application.

An EIN is essential for all businesses and provides many benefits as you operate. Some of the benefits include simplicity when filing your taxes, it will legally protect your business, keep your personal information safe, and establish credit.

Step 8: Licenses and permits

All businesses must obtain the necessary license and permits to operate legally in the states, federal jurisdictions, and industries the business is a part of. It’s important to do research into the requirements your states government and federal government needs in order to obtain the required licenses and permits. Obtaining the necessary permits can often be complex processes, so it might be worth consulting with a small business lawyer for assistance.

Step 9: Business Insurance

Insurance will help protect your small business, and more importantly your personal assets, if something goes wrong or in the event of an emergency. Some states may not require your business to obtain insurance, however it’s always a good idea to give yourself and your business extra protection. Common types of insurance may include, but are not limited to, liability insurance, workers compensation insurance, and umbrella insurance, however there are many types of insurance a business can choose from to stay protected.

Step 10: Business management software

Finding the right business management software will streamline operations. The type of software you’d want to implement will depend on the industry your business is in and the departments you have. Below are a few key business softwares your business should have:

●  Accounting Software

●  Project Management Software

●  Customer Relationship Management Software

●  Website Building Software

Having the right technology stack will streamline manual tasks and make operations easier when running your business.

Step 11: Hire your team

During the early stages of your business you may be required to run the business on your own, but once you start growing it may be a good idea to begin hiring employees to help manage your business. When deciding to hire employees, it’s important to take into account the costs of hiring someone as well as the time involved in finding and onboarding your team. The types of employees you’ll need will depend on your business type, however a few common roles found across businesses include an accountant, a general manager, and a customer representative.

Once you’ve hired your team, you’re ready to go to market!