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Research
The first thing you need to do when you have a business in mind is to validate your idea. That means do some homework, and the easiest way to do that is to do a quick internet search for the service or product you want to supply.
If you see a hundred sites promoting what you thought was your original idea don't give up yet. Perhaps you have a unique angle to add to the mix, such as starting a natural, sustainable habitat landscaping business in a sea of chemical-soaked lawn care companies.
Once you find your business niche and are confident you can bring something new to consumers there's more research to do. After all, just because there are no sustainable landscape companies to compete with doesn't mean you should jump right in and start one. Perhaps the idea has already been used, only to bomb because consumers aren't interested in the concept.
Your next step is to do market research. That means you need to find out if there is a viable customer base you can tap into when your business opens its doors. There are specific angles you'll need to cover in your research:
- Demand for product or service
- Size of market you're trying to reach
- Income range and employment rate of your business
- Location where your customers live
- Competition and market saturation
- Price and profit ranges
The same type of analysis should be put into play if you have a product rather than a service; determine whether you have a solid idea in mind then do some basic research to see if it is financially solid enough to build a business around.
Here are some resources to help you learn more about market research and perform an effective competitive analysis:
Score.org
Teaches small business owners how to operate on a shoestring budget.
Entrepreneur.com
How to do market research for your business plan.
Small Business Association
Market research and competitive analysis plans and trends.
GreenBook
List of companies that will do market research for your business.
Xero
No frills resource on how to do market research in any niche.
WeWork
Market research tips especially directed at startups.
Business Plan
Score.org
Downloadable template providing a comprehensive framework for a business plan.
Small Business Association
Business plan tool and tons of other resources for creating a plan that works.
The Balance
Comprehensive outline of a business plan for small business owners.
Bplans
Example of a lean business plan (not for bank or investor), updated in 2017.
Inc
Choose from ten business plan templates you can download for free.
Rocket Lawyer
Business plan software, create, sign and download all in one place.
University HQ Business
Get a business degree that can help you plan your small business the right way.
Business Structure
IRS
Official IRS information on the different types of busienss entities
NerdWallet
Easy guide to understand the different entities and where your business fits
QuickBooks
Quick read on the three main types of business structures.
Finances
Once your business plan is complete you'll have a pretty clear idea of exactly how much money you'll need to start your business and bring it to the point of consistent profitability. At this point you can turn to financing options because you have a specific dollar amount required. If you have enough money in your personal savings or investments to launch your business with cash you can skip this section but if you're like most of us you'll need funding to get your venture off the ground. Here are some types of business funding you can explore:
- Self-funding: savings, mortgaging property, investment from family and friends, and borrowing on your 401k are all examples of self-funding.
- Venture capital investments: financing is offered in trade for a percentage of the business.
- Crowdfunding: a large number of people contribute to your business idea, usually in return for a gift or special perk.
- Business loan: a traditional loan from a bank or credit union.
In addition, the Small Business Administration (SBA) has special programs to encourage entrepreneurs entering the world of business ownership. Besides SBA-guaranteed loans examples of SBA sponsored funding programs are:
- Small Business Investment Company (SBIC)
- Small Business Innovation Research (SBIR)
- Small Business Technology Transfer (STTR) program
Here are some resources that will assist you in determining funding, how to pay for your business and other information:
Forbes
Forbes' guide to getting a small business loan.
Small Business Administration
Small Business Administration gives tips on getting funding.
Money Crashers
Tips from Money Crashers on how to raise money for your business.
Register Your Business
You'll need to register your business to make it legal, and before you do that you'll need a business name. When choosing a name for your business, remember to make it unique, easy to recognize, and easy to remember. Here are some of the aspects you should consider when you're brainstorming your business name:
- The foundation of the business
- Your mission statement
- Your selling point
- Your target audience
- The message you want to give
- What the name brings to mind
- Is it easy to pronounce?
- Is it different than your competitors?
Once you decide on a name you'll need to register it, so make sure you're comfortable with your choice before making it legal. It's a good idea to narrow your choices down to three or four and then check to see if the name is available in your state and not it's trademarked on the federal level.
If you're an LLC, Limited Partnership, or Corporation you'll need to register the business name with the state; Sole Proprietors and General Partnerships should register on the county level and can choose a "Doing business as" (DBA) instead of your personal name.
Each state has a different process for registering your business. Check out our state-by-state guide here:
You should also see whether the name is available as a domain; you can do this with a quick domain search at most web providers with no fee. If your domain choice is not available you should decide whether a similar domain name will work. It's a good idea to purchase the domain name before registering the business, as you want to make sure your branding is consistent and your website name is easy to remember.
Here are some helpful links to get you started with registering your business on the web:
Licenses and Permits
Depending on the type of business you're opening and where it will be located you will most likely need one or more licenses or permits before you'll be allowed to open for business. Here are some permits and licenses you may be required to hold; make sure you determine exactly what is required in your own state, county, and city to avoid breaking the law:
- Business license: Usually granted at the city or county level, a business license is your proof that you've registered your business as required by law. Apply at your municipal building; check online for the exact office, fees, and requirements.
- City permits: If you're running a retail business within city limits you may need an inspection and permit from the fire department, a permit for the type and size of sign you'll be displaying, and similar restrictions.
- State requirements: If you're selling products or goods you may need to apply for a sales tax license, and some specific occupations must also be licensed by the state. Check with your state's website for the exact requirements.
- State requirements: If you're selling products or goods you may need to apply for a sales tax license, and some specific occupations must also be licensed by the state. Check with your state's website for the exact requirements.
- Health Department Permit: If your business will be selling food you'll probably need a state inspection and permit from the Health Department.
Whatever the type of business you're launching, registration and licensing is vital. Make sure you have all your bases covered before you begin in order to avoid fines and penalties.
Location and Equipment
Depending on the type of business you're starting you'll most likely either be working from home or a commercial space, so here's a look at each:
A home office may seem ideal on paper because there's no commute time or expenses but in reality it can be counterproductive. If you're looking at a home office you'll have to ensure it's private, big enough for expansion if your business booms, and secure. Other family members must respect business hours, and if you have customers visit you on site there should be a private entrance and perhaps a waiting area.
A leased or purchased business space also has pros and cons. Expense is most likely the biggest, as you'll have an extra rent or mortgage payment as well as insurance, utilities, and other overhead.
If you have customer traffic then location may be a big factor in deciding where to locate; if your business is online and you're in a metropolitan area you may be able to consider coworking as a viable alternative.
Equipment can also be a big expenditure and it may be hard to decide whether to rent or buy. Usually most types of office equipment can be rented; it's good idea to utilize an app that will give you a quick cost analysis or consult with your accountant in order to decide whether buying or renting equipment is cost effective.
Small Business Association
How to choose the best location for your business.
BizFilings
Tips on buying or leasing office facilities or other premises.
Fit Small Business
In-depth guide to buying or leasing commercial property.
Backend Services
When you're doing a cost analysis of your business remember the backend services that don't show up on a straight payroll calculation. If you have employees you'll need to pay taxes and FICA as well as Workers' Compensation insurance premiums; there are also many other services that you'll utilize in order to keep your business running smoothly and legally. Here are some examples of backend services you may have to pay for:
- Employee benefits
- Bookkeeping
- Accounting
- Payroll processing
- Deliveries
- Inventory tracking
- Website maintenance
- Insurance
Many of the monetary backend services can be outsourced to a single accounting company or bookkeeper; another option is by utilizing reputable software programs. You can have interactive payroll software that encompasses benefits, taxes, and other deductions seamlessly. Likewise, a Point-of-Sale (POS) program can track inventory, sales, orders, and deliveries.
It's important that you set up your backend services in advance so you don't become overwhelmed by paperwork. Having a good system in place will not only give you an instant snapshot of how your business is progressing, it will soon allow you to see high and low cycles and make future growth projections. That way you can plan for future growth and expansion without overextending yourself.
American Express
A basic guide to small business accounting presented by American Express.
Shopify
Ten steps to get your startup accounting on track from Shopify.
Small Business Association
How to set up and manage accounts when you are starting a business.
Paychex
Small business payroll services for 1-49 employees
QuickBooks
Very commonly used for small business, payroll solution and bookkeeping.
ADP
Well-known solution for payroll and tax services for SMBs.
Business News Daily
2018 guide to the best payroll services analyzed by Business News Daily.
Fundera
An even more comprehensive list of payroll and tax services for SMBs.
Small Biz Trends
Small business inventory software reviews.
Fit Small Business
Inventory management for small business, a complete guide.
Forbes
The best benefits packages for small businesses.
Zane Benefits
Examples of common benefits packages offered to small business employees.
Most companies need some sort of insurance. From workers’ compensation coverage to general liability coverage to cyber insurance, you will need insurance coverage. This site explains workers’ comp coverage in great detail, but see our resources below to find tips on the other types of business insurance.
Forbes
13 types of insurance every small business owner should have.
Missouri Dept. of Insurance
Small business guide on all types of insurance you need as a business owner.
WorkCompLab
Tips on how to buy workers' comp insurance
Cyber Insurance
Cyber insurance tips and explanations about this new type of insurance.
Hiring
Workable
Hiring guide for small businesses
Craigslist
Post 'gigs' for short-term work or pay for more formal job postings.
Glassdoor
Post a job for free on Glassdoor by adding a company page.
Connect with potential employees for a posting fee.
Indeed
Post job openings and reach a national audience.
ZipRecruiter
Post jobs online for free and get help finding the right candidates.
LawDepot
Free customizable employment contracts.
Stanford
Sample employment agreement brought to you by Stanford.
Promotion
Entrepreneur.com guide to choosing the right type of structure
Marketing on Instagram explained with details on setting up a business account.
Join Pinterest as a business and reach people to interact with your brand.
Add your business to Twitter to reach an even wider audience.
Chamber of Commerce
Join the local Chamber of Commerce to get access to other community members.
Market your business with online ads on LinkedIn - great for B2B.