10 Steps to Starting a Business
There are a lot of articles, blogs, videos, books, etc., listing the steps to starting a business. Here is my take on the subject from my experience starting PAFS.
1. Pick Your Product or Service – Determine what you will be selling the day your business opens to five or ten years from when you begin. In other words, you can start with one or a few products and build from there. A smorgasbord of offerings is not mandatory on the first day.
2. Decide on Your Target Audience – Who will want your product? Where will you sell it? How will you sell it? Will you sell your product regionally, nationally, or globally? All of these questions will help drive the answers to the rest of the list.
3. Keep Your Product and/or List of Services Small – Do this at first, at least. Many businesses fail because they try to do or offer too much right at the beginning. It is better to focus and become an expert at a few things and then add more later. Also, if your company designs and sells toothbrushes, do not be tempted to start trying to design and sell shoes. Stay focused!
4. Determine Your Company Name – Why isn’t this first on the list? The reason is that many times people pick a name and try to fit a product into it. Later, they have to go back and create a new name that fits what they sell. When deciding on a company name, look at both the Secretary of State site in the state where the business will reside and a web hosting company (e.g. GoDaddy, Site Ground, etc.) to make sure the name is not in use by someone else. Nothing is more frustrating than to get everything going to find out the name is in use by someone else.
For example, some may remember when Panera Bread was named it St. Louis Bread Co. Before they were St. Louis Bread Co., they were Au Bon Pain. Another company that had to change their name from World Wrestling Federation (WWF) to the World Wrestling Entertainment, Inc., (WWE) because WWF was already used by World Wildlife Fund.
5. Create Your Branding – Branding consists of the tagline, vision and goal statement, logo, colors, target audience, and the list goes on and on. Once the company product and service are decided upon, the company name picked, it is easier to work on tying it all together.
6. Make a Budget – This is probably one of the most difficult things to do; however, it is one of the most important. Ask yourself the tough questions. What does it cost to create the product or service? How will you reach your target audience? What equipment do you need? Also, study and learn what you do not know about business financial matters.
7. Choose Your Company Structure – After going through items 1 through 6, you will need to decide what type of ownership fits your company from the standpoint of taxes and liability management. Should your company be an LLC or C Corp? Or, should it be a Sole Proprietor or a Partnership? Or, would one of the other business types be a better fit? A meeting with a good business attorney and CPA will be valuable to answer your questions.
8. Create a Business Plan – Business plans consist of the information listed in items 1 through 7. The U.S. Small Business Administration has a lot of information on their website to help with this step.
9. File Organizational Documents – Once you have decided on your company structure, you will need to file the appropriate documents with the Secretary of State in the state where your company will be located. Most Secretary of State websites are loaded full of information sharing what steps to take. Or, you can contact an attorney to help with the process. An attorney can also answer a lot of questions about how to structure your business.
10. Get a TIN/EIN and/or a Business License – There are some situations where a TIN/EIN is not needed. Contact a CPA to obtain the most accurate information regarding whether your company needs one. Also, check with the city where the business will be located and ask if you will need a business license. Every city is different, so be sure to check.
Once these steps are complete, you can begin putting your company together. You can create a website, order marketing materials, package your products, and get a mailbox if needed. Of course, there is a whole lot more to do, but this should get you started in the right direction!