If you're thinking about starting your own business, you are not alone: according to Forbes Magazine about 543,000 new businesses are launched each month. The reasons for starting a business are as diverse as the people who launch them: while some are determined to pursue their life passion, others may want the independence that comes with being your own boss. Some people have a great idea they want to promote; some are looking for a profitable venture to expand their income.

Regardless of the reasons for wanting to start a business there are some sobering facts you should face before you begin. USA Today states that only about 20 percent of new businesses make it past the first year, and only about 30 percent make it to ten years of operation. That means in order to survive in your business venture you'll have to make a plan of action before you buy the first paperclip.

There are a lot of bases to cover in order to start a profitable business that will last but there are also a lot of resources available to help you along each stage. This comprehensive guide will show you exactly what you need to do before, during, and after you start your new business and will lead you to the path of success.

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

Once you've done your basic research you'll be ready to take your first step as a business owner, and that means writing a business plan. A business plan will give you a concrete roadmap for your business startup and is one of the keys to success you shouldn't ignore. There are many styles of business plans to choose from, so look at various types and find one that will work for your business concept. The following are the components of a traditional business plan; while yours may be different it should still cover the same topics:

  • Executive Summary: an overview of your business concept
  • Company description: what your company will produce, who the customers will be, and strengths your business will have over competitors
  • Market analysis: your target market and industry outlook
  • Management and organization: the legal structure of your business and who will run it.
  • Product line or service: what your business will sell or provide, including intellectual property if applicable
  • Sales and marketing: how you will find customers, sell your products or services, and marketing strategies.
  • Funding request: if you plan on applying for a business loan this section will outline how much you'll need for the next five years and what it will be spent on.
  • Financial projections: forecasted sales and income, collateral, and expected expenditures
  • Appendix: supporting materials such as documents that will be required by a loan officer, patent applications, contracts, and permits.

Here are some additional resources and templates to help you create an effective 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.

Business Structure

When you're ready to start your business you'll need to decide on a business structure. While a Sole Proprietorship (an individual or a married couple) is the most simple as well as most common business type it does leave the owner personally liable for all debts. Here are the other types of business structures:

  • General Partnership: Two or more people who agree to contribute to a business; a written partnership agreement outlines labor, money, and skill each will contribute as well as outlining how each will share management, profits, and losses.
  • Limited Partnership: One or more limited partners and one or more general partners in which the general partners manage the business and the limited partners are not. All share in the profits but limited partners have their losses limited to the amount of initial investment.
  • Limited Liability Partnership (LLP): Similar to a general partnership except a partner has no personal liability for negligence caused by another partner.
  • Corporation: This type of structure is more complex in that the corporation is considered an entity in itself. The corporation has specific privileges, rights, and liabilities that the individuals do not and holds a different tax structure.
  • Not for Profit Corporation: A structure for businesses whose primary purpose is to serve the public interest, a not for profit has rigid requirements and activities it can and cannot perform.
  • Limited Liability Company (LLC): One or more persons who form a specific business, similar to corporate form with specific interests, management, and distribution of profits and losses.

Still confused about which type of business to set up? Take a look at these resources on structuring a business:

Entrepreneur.com

Entrepreneur.com guide to choosing the right type of 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:

Inc

Comprehensive guide on financing types for businesses.

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:

Google

Get your free business listing on Google for brick-and-mortar or other businesses

Namecheap

Namecheap is a domain registration service where you can find a domain for your business.

GoDaddy

GoDaddy is another domain registration and web hosting service.

Bluehost

Bluehost is a cost-effective website hosting service.

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.

BusinessTown

Factors to consider when looking for a business location.

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

If you expect your business to expand at some point you'll need to hire employees. You should pay close attention to your business growth in order to hire at the right time; while you don't want to lose customers because you can't fulfill their needs in a timely manner you also don't want to pay people for doing nothing while you wait for the business to grow.

A good option may be somewhere in between: hiring part time help when you begin to see consistent growth that is becoming hard to keep up with. Then you can add hours and days to their employment as business requires.

All employment should begin with an interview. Make sure they understand what will be expected of them, the terms on employment, hours, and other details. Because there are specific laws in place to deter discrimination you should be very familiar with what you can and cannot ask of a potential employee during an interview.

In addition, your employees should sign either a contract or an agreement once you've begun the hiring process. If your business interacts with customers you might also consider having them read and sign an employee handbook to ensure they understand exactly what you expect from them.

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.

LinkedIn

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

In order for your business to grow you'll need a marketing plan. This is a plan of action that will allow you to reach sales goals in a certain period of time by using specific marketing and promotional tools.

The first and biggest step in developing your marketing plan is to identify your niche. Determine your customer demographic, understand what they want, and target specific ways to reach them and fulfill their needs.

Your type of business will help you to determine your marketing strategy. It's important to find a "comfort zone" for marketing; you don't want to commit to a year-long advertising program only to find it brings little or no results but on the flip side a one-week promotion may not be long enough to reach your customer base. Here are some options you can use for your marketing plan:

  • Facebook, Twitter, Instagram, and other social media platforms
  • Coupons and flyers in local newspapers and businesses
  • Discounts to current customers when they bring new business via word-of-mouth
  • Advertisements and other promotions via organizations you belong to such as the Chamber of Commerce, American Legion, Alumni, and Veterans organizations.
  • Online promotion on websites linked to your business industry

Facebook

Entrepreneur.com guide to choosing the right type of structure

Instagram

Marketing on Instagram explained with details on setting up a business account.

Pinterest

Join Pinterest as a business and reach people to interact with your brand.

Twitter

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.

LinkedIn

Market your business with online ads on LinkedIn - great for B2B.

Conclusion

There is a lot of work involved in starting a business and nurturing it to success, but the returns are endless. The most important thing you can do is to make a plan of action and take the first step.

This comprehensive guide will give you all the resources you need every step of the way, from concept to hiring to promoting. While every person absorbs information differently it's recommended you read the entire guide at least once before going into depth on each section as you develop your business, write your business plan, determine financing, and get ready to open for business.

Remember, as you plan and develop your business idea to look at the big picture. It's easy to get overwhelmed by the sheer number of things that need to be done in order to launch your business, but you also need to keep the long-term plan in mind.

By knowing where you want your business to be in three months, one year, and five years you'll find it easier to plan in advance and in turn keep your marketing and promotional plan viable. You'll also be able to look back and see your progress, which can be vital in keeping your entrepreneurial spirit motivated.