1. Conduct market research
Market research is an essential first step to your business success. Many business owners skip this step and take their business idea straight to the execution phases. Still, they miss invaluable information about their industry, their target audience, and where they fit into the market alongside existing competitors. Make sure to complete this research to validate your understanding of your business and who it will serve. Check out this comprehensive guide by Hubspot with everything you need to know about conducting market research for your business.
2. Write Your Business Plan
Next, write up a business plan to get all your ideas—and any insight from your market research. Include a brief overview of your business concept, the audience you’ll serve, and the problem you’ll solve for that audience. Note where you fit into the market and how you compare to competitors. Then, close out with a brief overview of your initial marketing and financial plan.
3. Create a Budget
Speaking of finances, you’ll need a budget for your business launch to ensure that you don’t overspend. In the early stages of business creation, it’s easy to get excited about every new marketing opportunity or growth tactic, but don’t exhaust all of your resources pursuing every avenue that might lead to profit. Create a budget to help prioritize your spending and keep your plans realistic.
4. Create an Operational Plan
As a follow-up to your business plan, make sure to develop an operational strategy that addresses the day-to-day of running your business. For example, will your company have a storefront or an online presence? Will you need employees right away or hire as you grow? Don’t leave these answers up to chance once your business is up and running.
5. Choose Your Business Name
Your business name is a critical decision that can truly affect your long-term success. Make sure you pick something that feels true to your business and brand and is scalable with your company. It’s essential to double-check that it’s not already in use; otherwise, you may find yourself back at the drawing board down the road. Consider also checking the availability of your name’s website URL and social media handles, especially if you’re choosing between a few potential names.
6. Choose a Business Structure
With your initial planning underway, it’s time to think about logistics. One critical decision you’ll need to make up-front is whether your business will operate as a sole proprietorship, an LLC, a partnership, or a corporation. Each option has its own tax and liability implications, so make sure you give some thought to this decision before your launch. Not certain which to file your business under? Here’s the difference between the three.
A limited liability company, or LLC, is a legal entity formed at the state level. An LLC exists separately from its owners, and owners are not personally responsible for business debts and liabilities. Instead, the LLC is liable.
A sole proprietorship is an unincorporated business owned and run by one person. This option is the simplest option, and the owner is entitled to all the business profits. However, unlike an LLC, you are also responsible for all liability.
Lastly, a corporation is owned by one or more stockholders and managed by a board of directors (which may consist of only one person) elected by the stockholders. Forming a corporation generally is the best option if multiple owners bring significant investments to the business.
7. Register Your Business on the Federal Level
When you’ve chosen a name, you can officially register your business with the federal government. Registration is a crucial step that legalizes your business dealings and creates a new entity record. Registering your business then enables you to complete this follow-up step: applying for federal (and potentially state) tax IDs to associate with your business. Your tax ID is called an Employer Identification Number (EIN), and applying is free. Having an EIN is required if you plan to pay employees, pay federal taxes, open a business bank account, or apply for specific licenses and permits. You can learn more about federal business registration and find the application here.
8. Register Your Business on the State Level
If your business is an LLC, corporation, partnership, or nonprofit corporation, you’ll need to register with any state where you conduct business activities. For this step, you will need to research the requirements for your individual state. Keep in mind most states have an unemployment tax, and state income tax varies from state to state. Some states allow you to register online, and some states make you file paper documents in person or through the mail. Most states will require you to register with the Secretary of State’s office, a Business Bureau, or a Business Agency. You can learn more about state business registration and find the application for your state here.
9. Apply for Licenses and Permits
As you enter the home stretch of your business launch, make sure to research any licenses and permits you may be required to hold for your industry or location. If you come across a license or permit you’ll need, use your EIN to apply. These change from state to state, so make sure you have the correct licenses and permits for your operating location. You can find a list of common licenses and permits here.
10. Open a Business Bank Account
Lastly, use your EIN to open a dedicated bank account for your business. You may choose to open a checking account, savings account, credit card account, and/or merchant services account in the business’s name. Your bank can walk you through the process whenever you’re ready.
What are you waiting for? Get started on these ten steps for your new business concept, and you’ll be primed for a seamless, successful launch. Once you’re up and running, learn more about growing your business through outsourcing payroll, HR, and benefits with Merritt Business Solutions here.