Do Your Research

Most likely you have already identified a business idea. Does your idea have the potential to succeed? You will need to run your business idea through a validation process before you go any further.

In order for a small business to be successful, it must solve a problem, fulfill a need or offer something the market wants.

There are a number of ways you can identify this need, including research and even trial and error. As you explore the market, some of the questions you should answer include: 

• Is there a need for your anticipated products/services?
• Who needs it?
• Are there other companies offering similar products/services now?
• What is the competition like?
• How will your business fit into the market?

Make a Plan

You need a plan in order to make your business idea a reality. A business is a blueprint that will guide your business from the start-up phase through establishment and eventually business growth, and it is a must have for all new businesses. The good news is that there are different types of business plans for different types of businesses.

If you intend to seek financial support from an investor or financial institution, a traditional business plan is a must. This type of business plan is generally long and thorough and has a common set of sections that investors and banks look for when they are validating your idea.

If you don't anticipate seeking financial support, a simple three- or four-page business plan can give you clarity about what you hope to achieve and how you plan to do it. 

Plan Your Finances

Starting a small business doesn't have to require a lot of money, but it will involve some initial investment as well as the ability to cover ongoing expenses before you are turning a profit. Put together a spreadsheet that estimates the one-time startup costs for your business, licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc., as well as what you anticipate you will need to keep your business running for at least 12 months, rent, utilities, marketing and advertising, production, supplies, travel expenses. Those numbers combined is the initial investment you will need.

Choose a Business Structure

Your small business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. The business entity you choose will impact many factors from your business name, to your liability, to how you file your taxes. You may choose an initial business structure, and then reevaluate and change your structure as your business grows and needs change.

Depending on the complexity of your business, it may be worth investing in a consultation from an attorney or CPA to ensure you are making the right structure choice for your business.

Pick and Register Your Business Name

Your business name plays a role in almost every aspect of your business, so you want it to be a good one. Make sure you think through all of the potential implications as you explore your options and choose your business name. Once you have chosen a name for your business, you will need to check if it's trademarked or currently in use. Then, you will need to register it. A sole proprietor must register their business name with either their state or county clerk.  Corporations, LLCs, or limited partnerships typically register their business name when the formation paperwork is filed.

Don't forget to register your domain name once you have selected your business name.

Choose Your Accounting System

Small businesses run most effectively when there are systems in place. One of the most important systems for a small business is an accounting system.

Your accounting system is necessary in order to create and manage your budget, set your rates and prices, conduct business with others, and file your taxes.

Set Up Your Business Location

Setting up your place of business is important for the operation of your business, whether you will have a home office, private office space, a retail location or online. You will need to think about your location, equipment, and overall setup, and make sure your business location works for the type of business you will be doing. You will also need to consider if it makes more sense to buy or lease your space.

Promote Your Small Business

Once your business is up and running, you need to start creating a marketing plan. Once you have completed these business start-up activities, you will have all of the most important bases covered. Keep in mind that success doesn't happen overnight. But use the plan you've created to consistently work on your business, and you will increase your chances.