How to Start a Business: A Comprehensive Guide and Essential Steps

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Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, how much does it cost to start a business, what should i do before starting a business, what types of funding are available to start a business, do you need to write a business plan, the bottom line.

Building an effective business launch plan

planning to start a business

Starting a business in the United States involves a number of different steps, spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also entails decisions around a business’s location, structure, name, taxation, and registration.

This article covers the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

  • Entrepreneurs seeking to develop their own business should start by conducting market research to understand their industry space and competition, and to target customers.
  • The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy. Potential funders and partners may want to review the business plan in advance of signing any agreements.
  • Securing funding is crucial in launching a business. Funding can come in the form of grants, loans, venture capital, or crowdfunded money; entrepreneurs may also opt to self-fund instead of or in combination with any of these avenues.
  • Choosing a location and business structure can have many implications for legal aspects of business ownership, such as taxation, registration, and permitting, so it’s important to fully understand the regulations and requirements for the jurisdiction in which the business will operate. 
  • Another key aspect of launching a new business is having a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. 

The U.S. Small Business Administration (SBA) recommends researching demographic data around potential customers to understand a given consumer base and reduce business risk. It also breaks down common market considerations as follows:

  • Demand : Do people want or need this product or service?
  • Market size : How many people might be interested?
  • Economic indicators : These include income, employment rate, and spending habits of potential customers.
  • Location : Where are the target market and the business located?
  • Market saturation : How competitive is the business space, and how many similar offerings exist?
  • Pricing : What might a customer be willing to pay?

Market research should also include an analysis of the competition (including their strengths and weaknesses compared to those of the proposed business), market opportunities and barriers to entry, industry trends, and competitors’ market share .

There are various methods for conducting market research, and the usefulness of different sources and methodologies will depend on the nature of the industry and potential business. Data can come from a variety of sources: statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, or questionnaires.

A comprehensive business plan is like a blueprint for a business. It will help lay the foundation for business development and can assist in decision making, day-to-day operations, and growth. 

Potential investors or business partners may want to review and assess a business plan in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and only need to include what makes sense for the business in question. As such, they can vary in length and structure depending on their intended purpose. 

Business plans can generally be divided into two formats: traditional business plans and lean startup business plans. The latter is typically more useful for businesses that will need to adjust their planning quickly and frequently, as they are shorter and provide a higher-level overview of the company.

The process of funding a business can be as unique as the business itself—that is, it will depend on the needs and vision of the business and the current financial situation of the business owner. 

The first step in seeking funding is to calculate how much it will cost to start the business. Estimate startup costs by identifying a list of expenses and putting a number to each of them through research and requesting quotes. The SBA has a startup costs calculator for small businesses that includes common types of business expenses. 

From there, an entrepreneur will need to determine how to secure the required funding. Common funding methods include:

  • Self-funding , also known as bootstrapping  
  • Seeking funding from investors, also known as venture capital  
  • Raising money by crowdfunding
  • Securing a business loan
  • Winning a business grant

Each method will hold advantages and disadvantages depending on the situation of the business. It’s important to consider the obligations associated with any avenue of funding. For example, investors generally provide funding in exchange for a degree of ownership or control in the company, whereas self-funding may allow business owners to maintain complete control (albeit while taking on all of the risk). 

The availability of funding sources is another potential consideration. Unlike loans, grants do not have to be paid back—however, as a result, they are a highly competitive form of business funding. The federal government also does not provide grants for the purposes of starting or growing a business, although private organizations may. On the other hand, the SBA guarantees several categories of loans to support small business owners in accessing capital that may not be available through traditional lenders.

Whichever funding method (or methods) an entrepreneur decides to pursue, it’s essential to evaluate in detail how the funding will be used and lay out a future financial plan for the business, including sales projections and loan repayments , as applicable.  

Legally, businesses operating in the U.S. are subject to regulations and requirements under many jurisdictions, across local, county, state, and federal levels. Legal business requirements are often tied to the location and structure of the business, which then determine obligations around taxation, business IDs, registration, and permits.

Choosing a Business Location

The location—that is, the neighborhood, city, and state—in which a business operates will have an impact on many different aspects of running the business, such as the applicable taxes, zoning laws (for brick-and-mortar, or physical locations), and regulations.

A business needs to be registered in a certain location; this location then determines the taxes, licenses, and permits required. Other factors to consider when choosing a location might include:

  • Human factors : Such as the target audience for your business, and preferences of business owners and partners around convenience, knowledge of the area, and commuting distance
  • Regulations and restrictions : Concerning applicable jurisdictions or government agencies, including zoning laws
  • Regionally specific expenses : Such as average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing
  • The tax and financial environment : Including income tax, sales tax, corporate tax, and property tax, or the availability of tax credits, incentives, or loan programs

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to fully understand and choose a business structure carefully and, if necessary, consult a business counselor, lawyer, and/or accountant.

Common business structures include:

  • Sole proprietorship : An unincorporated business that has just one owner, who pays personal income tax on profits
  • Partnership : Options include a limited partnership (LP) or a limited liability partnership (LLP)
  • Limited liability company (LLC) : A business structure that protects its owners from personal responsibility for its debts or liabilities
  • Corporation : Options include a C corp , S corp , B corp , closed corporation , or nonprofit

Getting a Tax ID Number

A tax ID number is like a Social Security number for a business. Whether or not a state and/or federal tax ID number is required for any given business will depend on the nature of the business, as well as the location in which the business is registered.

If a business is required to pay state taxes (such as income taxes and employment taxes), then a state tax ID will be necessary. The process and requirements around state tax IDs vary by state and can be found on individual states’ official websites. In some situations, state tax IDs can also be used for other purposes, such as protecting sole proprietors against identity theft.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

  • Operates as a corporation or partnership
  • Pays federal taxes
  • Wants to open a business bank account
  • Applies for federal business licenses and permits
  • Files employment, excise, alcohol, tobacco, or firearms tax returns

There are further situations in which a business might need a federal tax ID number, specific to income taxation, certain types of pension plans, and working with certain types of organizations. Business owners can check with the Internal Revenue Service (IRS) about whether they need an EIN.

Registering a Business

Registration of a business will depend on its location and business structure, and can look quite different depending on the nature and size of the business. 

For example, small businesses may not require any steps beyond registering their business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all. However, registration can include personal liability protection as well as legal and tax benefits, so it can be beneficial even if it’s not strictly required. 

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will require a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

  • Whether the business has a physical presence in the state
  • If the business often conducts in-person client meetings in the state
  • If a large portion of business revenue comes from the state
  • Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case, the business would register in the state in which it was formed (this would be considered the domestic state), and file for foreign qualification in any additional states.

Some businesses may decide to register with the federal government if they are seeking tax-exempt status or trademark protection, but federal registration is not required for many businesses.

Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business, and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry , target market, and business, but they should aim to include descriptions of and strategies around the following:

  • A target customer : Including market size, demographics, traits, and relevant trends
  • Unique value propositions or business differentiators : Essentially, an overview of the company’s competitive advantage with regard to employees, certifications, or offerings
  • A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
  • Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, or sales targets
  • An execution plan : Should detail tactics and break down higher-level goals into specific actions
  • A budget : Detailing how much different marketing projects and activities will cost

The startup costs for any given business will vary greatly depending on the industry, business activity, and product or service offering. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s startup costs calculator for common types of expenses associated with starting a small business.

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

Startup capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although private sources do.

Business plans are comprehensive documents that lay out the most important information about a business. They are important references for the growth, development, and decision-making processes of a business, and financial institutions as well as potential investors and partners generally request to review them in advance of agreeing to provide funding or work together.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of the target market, competition, industry, business goals, business structure, funding requirements, tax and operating regulations, and marketing strategy, and conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

U.S. Small Business Administration. “ Grants .”

  • How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
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If you're thinking about starting a business, here's a step-by-step guide to help you through the process.

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Starting and growing a business is difficult under the best of circumstances. Those who are brave enough to launch their own company amidst a global pandemic will face all the usual challenges — conducting research, figuring out funding, registering with the government, building a brand and more — on top of the new obstacles presented by social distancing and state-by-state restrictions.

Before you start a business, you'll need to research, plan and execute some important pre-launch activities if you want to set yourself up for success. You'll also need to think carefully about your business plan and model to determine how it will fare today and in the post-COVID world.

In this guide, we'll walk you through every step to getting your business off the ground, from the initial planning phases to your launch date and beyond.

Planning your business

1. conduct market research.

Every business needs to know who its customers are. Conduct some market research to understand typical consumer behavior, pain points and market trends in your chosen industry, so you can see where your potential startup might fit in. This is especially important right now, given the current economic climate and how typical consumer activities and lifestyles have changed in light of COVID-19.

Your research should answer each of these questions:

  • Demand. What, if any, are some desired products or services in your given market?
  • Market size. How many clients or consumers would make up your target audience?
  • Market saturation. How many competitors are in your market with a similar concept?
  • Pricing. What is the typical amount customers are willing to pay for products and services in your market?
  • Consumer engagement. How have similar product- or service-based businesses pivoted during the pandemic to engage consumers virtually? Have they moved their sales process online or entered the e-commerce space, and can you replicate that or do it better?

While there are plenty of online articles and resources you can use as a starting point, you’ll gain the best insights by speaking with consumers themselves. You can do this in the form of surveys, questionnaires, focus groups and one-on-one interviews.

[For more information, refer to our Guide to Conducting Market Research .]

2. Write a business plan

Your business plan is essentially a roadmap for your startup, keeping you on track and guiding you throughout your journey. This document can be as simple or in-depth as you'd like, but most include the following elements:

  • Executive summary. A brief background on your company – what it is, what it does and why.
  • Mission statement. A short statement describing your business’s purpose.
  • Market analysis. An extensive analysis derived from your market research.
  • Company description. A section addressing what problem your company solves and why it is unique.
  • Organization and management. A list of the owners and executives, as well as key staff members.
  • Marketing and sales. An overview of your strategy for targeting consumers based on your market research.
  • Service or product line. Descriptions of your products and services, and how they will be delivered to customers.
  • Funding request. How much funding you need and why, and how you plan to pay back any borrowed money.
  • Financial information. Projections including cash flow statements, income statements, balance sheets, collateral and current costs.

[For more information, check out our guide on writing a business plan .]

3. Run a trademark and business name search

You don't want to face legal issues simply because you failed to do your homework. By visiting the United States Patent and Trademark Office , you can conduct a trademark search to ensure your potential business or product name isn't already registered as someone else's intellectual property. You should also search your home state's database of registered businesses. Be sure to search for similar names (not just your exact name) to avoid confusion in your market.

Registering your business

4. choose and register your business name.

Once you choose a name that represents your business (and isn't in use by someone else), you can protect it by registering it. There are a few way to do this :

  • Entity name. This is how your home state identifies your business. It protects your business name at the state level: Once you register, no one else in your state can use that exact business name. We'll explain more on registering your entity name below.
  • Trademark. Registering a trademark prevents others in similar industries from using the same name. This can protect your name and goods or services on a federal level.
  • Doing Business As (DBA). If you want to conduct business under any other name besides your own personal name or your formal business entity name, you may be required to register a DBA with the state, county or city where you do business. Check your local laws to understand what your home state requires.
  • Domain name. Securing an appropriate URL for your business's website will ensure brand recognition for your future customers. You may also want to create social media accounts at this point – even if you don't actively use them yet – to ensure you get the username or handle you want.

[Read: How to Register Your Business With the Federal Government ]

You don't want to face legal issues simply because you failed to do your homework.

5. Choose your legal structure

When you officially register your business, you’ll also need to choose a legal structure. There are various types to consider, and the option you choose will impact how you operate, how you are taxed and even how business decisions are made.

The most common structures include:

  • Sole proprietorship. One owner runs the business without a strict structure. Owners are held personally liable for the business and their assets may be at risk if the business goes into debt.
  • Partnership. Two or more owners operate the business together. Each partner is personally liable for business debts.
  • C corporation. A C corp is considered its own entity and is taxed separately from the shareholders who own it. This structure provides "limited liability," meaning your personal assets are protected from business debts.
  • S corporation. S corps enjoy many of the benefits of C corps, but business income is taxed through owners’ personal taxes, not as a separate entity.
  • Limited liability company (LLC). LLCs are also taxed as a "pass-through" entity. They are managed by their members, who each own a percentage of the business.

[For more information and details on each of these options, check out our article on choosing the right business structure .]

6. Register your business with the proper local authorities

To register your business , you’ll have to first consider your structure and location. Sole proprietors who do business under their own names are not required to register. Additionally, most small businesses only have to register their business names with state and local authorities, but be sure to understand your home state's requirements before proceeding with your business operations.

  • Registering with the federal government. You can register your business with the federal government to protect your trademarkor achieve tax-exempt status . However, if you have an S corp, you must file a 2553 form with the IRS .
  • Registering with the state. Some states allow you to register your business online, while others require you to fill out and mail or physically hand in paperwork. You should register through the Secretary of State’s office, a business bureau or a business agency.

7. Get an employer identification number from the IRS

If you plan to hire employees, you’ll need to apply for an employer identification number (EIN), which is essentially a Social Security number for your business. This can be done for free through the IRS . Even if you are not going to hire employees, you may want an EIN anyway – unless you're a sole proprietor, you will need one to open a business bank account or credit card.

8. Research and apply for any applicable licenses and permits

Small businesses in certain industries need licenses and/or permits from federal and/or state agencies.

  • Federal licenses or permits. Some operations that might require federal licenses or permits include selling alcoholic beverages, engaging in wildlife-related activity, or broadcasting information radio, TV, cable, etc.
  • State licenses or permits. State licenses or permits exist for businesses doing construction, dry cleaning, food service and similar activities.
  • Sales tax licenses. Sales tax on items sold by e-commerce retailers has been a hot topic since the 2019 Supreme Court ruling in South Dakota v. Wayfair, which granted states the ability to collect sales tax from out-of-state online sellers with a certain volume of sales. As traditional brick-and-mortar retail moves into the online realm, e-commerce retailers selling to a national consumer base must investigate the sales tax license laws in the states where their buyers reside, especially as they grow.

Unsure of whether your business needs a license or permit? The U.S. Small Business Administration provides a wealth of information about the legal requirements for specific types of businesses.

Funding your business

9. determine how you will fund your business.

Many business owners apply for a loan to fund their startup. Before doing so, you’ll want to decide which loan, if any, is right for you and your business. Here are some popular types you might consider:

  • Line of credit loans. Short-term loans provided as a specific amount of cash to draw from when needed for inventory, operating costs, etc.
  • Term loans. Short- or long-term loans with monthly repayments, usually with low interest rates.
  • Specialty financing. Loans for specific purchases, like equipment loans and real estate loans, repaid over a longer period of time.
  • Invoice financing. Using unpaid invoices as collateral for a cash advance, repaid once invoice is paid, plus fee.
  • Merchant cash advances. Using future credit card sales as collateral for cash advances, generally repaid daily.
  • Personal loans. Assuming you have a good credit score, taking out your own loan for business expenses.

Some alternative funding methods include:

  • Venture capital. High-risk, high-return private equity for startups projected to have strong growth. Venture capitalists typically want to see a return on their investment within a certain time frame.
  • Angel investor. An individual who provides capital in exchange for debt or ownership equity.
  • Crowdfunding campaign. A campaign created to raise money for business from multiple individuals or supporters. Peer-to-peer platforms like Kickstarter allow you to offer "rewards" of your choosing to your backers for their support. Equity crowdfunding platforms allow investors to own an equity share of your business.

10. Open a business bank account

You’ll want to have a separate bank account for your business to ensure compliance and protection. While looking for the right account for your business, choose one with low fees and good benefits.Consider incentives like introductory offers, as well as interest rates for checking, savings and lines of credit. You'll also want to look at transaction, early termination and minimum account balance fees.

According to the SBA, the documentation you'll need to open your bank account are your EIN (SSN for sole proprietors), your business's formation or registration documents, and any ownership agreements and business licenses you have.

11. Choose and set up your accounting software

Managing your business's finances and books is essential, especially when it comes time to file taxes. Using the proper accounting software for your business can save you both time and money. There are various options to consider before making a decision, and they all depend on your business’s needs. Our guide for choosing accounting software can help you determine the best one for you.

Building your team

12. choose your advisers and vendors.

At minimum, your business should have a trusted attorney and financial professional to consult with on legal and tax matters. You may also consider partnering with third-party vendors or suppliers that offer the goods and services you need to run your business. Finally, formal and informal mentors provide emotional support, guidance and accountability.

13. Decide if you want to hire employees

If you decide to hire, make sure you understand your obligations as an employer , both from a legal and a tax standpoint. If you just want to hire freelancers or independent contractors, keep excellent financial records and be sure to issue a 1099-MISC form at the end of the tax year. Also, it's important to understand the difference between a W2 employee and a contractor so you don't get in trouble with the IRS for worker misclassification.

Since many businesses intend to stay fully or partially remote even after the pandemic, you may wish to consider hiring remote employees outside of your local geographic area. This can be a great way to diversify your team and get access to a wider pool of talent; however, you'll need to ensure you're complying with the specific income tax laws in any state where an employee resides.

Marketing and launching your business

14. create a marketing strategy.

Gain attention for your soon-to-launch business by advertising your goods and services through word-of-mouth, formal marketing campaigns or both. In today's virtual-first world, your top priorities should be building a great business website with strong SEO ( search engine optimization ) and developing a robust online presence through social media channels, email newsletters, blogs and more.

To perfect your marketing strategy without breaking the bank, check out our low-cost marketing ideas .

15. Launch and grow your business

Your work doesn't end on launch day – you need to continue to market your business, assess finances and adjust your strategy along the way. Stay connected to the entrepreneurial community and learn from others to help you refine your approach.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

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How to Start a Business: A Step-by-Step Guide

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Table of Contents

  • You should prepare thoroughly before starting a business, but realize that things will almost certainly go awry. To run a successful business, you must adapt to changing situations.
  • Learning how to start your own business involves conducting in-depth market research on your field and the demographics of your potential clientele is an important part of crafting a business plan.
  • In addition to selling your product or service, you need to build up your brand and get a following of people who are interested in what your business offers.
  • This article is for anyone who wants to learn how to start a business.

Starting a business can be hard work, but if you break down the process of launching your new company into individual steps you can make it easier. Rather than spinning your wheels and guessing where to start, you can follow the tried and true methods of entrepreneurs who’ve done it successfully. If you want to learn how to start your own business, follow this 10-step checklist to transform your business from a lightbulb above your head into a real entity.

Starting a business is a lot of work, but we’re here to help! Check out our useful resources for everything you need to successfully build your business from the ground up.

  • 11 Things To Do Before Starting A Business
  • Tax and Business Forms You’ll Need To Start A Business
  • 20 Mistakes To Avoid When Starting A Business

How to start a business

1. refine your idea..

refine your business idea

If you’re thinking about starting a business, you likely already have an idea of what you want to sell online , or at least the market you want to enter. Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, only faster and cheaper), you’ve got a solid idea and are ready to create a business plan. 

Define your “why?”

“In the words of Simon Sinek, ‘always start with why,’” Glenn Gutek, CEO of Awake Consulting and Coaching, told Business News Daily. “It is good to know why you are launching your business. In this process, it may be wise to differentiate between [whether] the business serves a personal why or a marketplace why. When your why is focused on meeting a need in the marketplace, the scope of your business will always be larger than a business that is designed to serve a personal need.” 

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Consider franchising.

Another option is to open a franchise of an established company. The concept, brand following and business model are already in place; you only need a good location and the means to fund your operation.

Brainstorm your business name.

Regardless of which option you choose, it’s vital to understand the reasoning behind your idea. Stephanie Desaulniers, owner of Business by Dezign and former director of operations and women’s business programs at Covation Center, cautions entrepreneurs against writing a business plan or brainstorming a business name before nailing down the idea’s value.

Editor’s note: Looking for a small business loan? Fill out the questionnaire below to have our vendor partners contact you about your needs.

Clarify your target customers.

Desaulniers said too often, people jump into launching their business without spending time to think about who their customers will be and why those customers would want to buy from them or hire them.

“You need to clarify why you want to work with these customers — do you have a passion for making people’s lives easier?” Desaulniers said. “Or enjoy creating art to bring color to their world? Identifying these answers helps clarify your mission. Third, you want to define how you will provide this value to your customers and how to communicate that value in a way that they are willing to pay.” 

During the ideation phase, you need to iron out the major details. If the idea isn’t something you’re passionate about or if there’s no market for your creation, it might be time to brainstorm other ideas.

Tip: To refine your business idea, identify your “why,” your target customers and your business name.

2. Write a business plan.

graphic of two people standing in front of a graph

Once you have your idea in place, you need to ask yourself a few important questions: What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? These questions can be answered in a well-written business plan . 

Fledgling business owners can make a lot of mistakes by rushing into things without pondering these aspects of the business. You need to find your target customer base. Who is going to buy your product or service? What would be the point if you can’t find evidence of a demand for your idea? 

This business plan template can help you launch and grow your business the right way.

Conduct market research.

Conducting thorough market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves conducting surveys, holding focus groups, and researching SEO and public data. 

Market research helps you understand your target customer — their needs, preferences and behavior — as well as your industry and competitors. Many small business professionals recommend gathering demographic information and conducting a competitive analysis to better understand opportunities and limitations within your market. 

The best small businesses have differentiated products or services from the competition. This significantly impacts your competitive landscape and allows you to convey unique value to potential customers.

Consider an exit strategy.

It’s also a good idea to consider an exit strategy as you compile your business plan. Generating some idea of how you’ll eventually exit the business forces you to look to the future. 

“Too often, new entrepreneurs are so excited about their business and so sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business,” said Josh Tolley, CEO of both Shyft Capital and Kavana. 

“When you board an airplane, what is the first thing they show you? How to get off of it. When you go to a movie, what do they point out before the feature begins to play? Where the exits are. During your first week of kindergarten, they line up all the kids and teach them fire drills to exit the building. Too many times I have witnessed business leaders that don’t have three or four predetermined exit routes. This has led to lower company value and even destroyed family relationships.” 

A business plan helps you figure out where your company is going, how it will overcome any potential difficulties, and what you need to sustain it. When you’re ready to put pen to paper, use a free template to help.

3. Assess your finances.

graphic of a businessperson standing in front of graphs

Starting any business has a price, so you need to determine how you will cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you’re planning to leave your current job to focus on your business, do you have savings to support yourself until you make a profit? Find out how much your startup costs will be. 

Many startups fail because they run out of money before turning a profit. It’s never a bad idea to overestimate the amount of startup capital you need, as it can take time before the business begins to bring in sustainable revenue. 

Perform a break-even analysis.

One way you can determine how much money you need is to perform a break-even analysis. This essential element of financial planning helps business owners determine when their company, product or service will be profitable. 

The formula is simple:

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  • Fixed Costs ÷ (Average Price Per Unit – Variable Costs) = Break-Even Point

Every entrepreneur should use this formula as a tool because it tells you the minimum performance your business must achieve to avoid losing money. Furthermore, it helps you understand exactly where your profits come from, so you can set production goals accordingly. 

Here are the three most common reasons to conduct a break-even analysis: 

Ask yourself: How much revenue do I need to generate to cover all my expenses? Which products or services turn a profit, and which ones are sold at a loss?

Ask yourself: What are the fixed rates, what are the variable costs, and what is the total cost? What is the cost of any physical goods? What is the cost of labor?

Ask yourself: How can I reduce my overall fixed costs? How can I reduce the variable costs per unit? How can I improve sales? 

Watch your expenses.

Don’t overspend when starting a business. Understand the types of purchases that make sense for your business and avoid overspending on fancy new equipment that won’t help you reach your business goals. Monitor your business expenses to ensure you are staying on track.

“A lot of startups tend to spend money on unnecessary things,” said Jean Paldan, founder and CEO of Rare Form New Media. “We worked with a startup with two employees but spent a huge amount on office space that would fit 20 people. They also leased a professional high-end printer that was more suited for a team of 100; it had key cards to track who was printing what and when. Spend as little as possible when you start, and only on the things essential for the business to grow and succeed. Luxuries can come when you’re established.”  

Using accounting software can streamline your expense tracking. Read our reviews of the best accounting software to learn more and find the right platform for your needs. Try starting with our Intuit QuickBooks Online review — this vendor is our top pick for small businesses.

Consider your funding options.

Startup capital for your business can come from various means. The best way to acquire funding for your business depends on several factors, including creditworthiness, the amount needed and available options.

  • Business loans. If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you cannot take out a bank loan, apply for a small business loan through the S. Small Business Administration (SBA) or an alternative lender. [Read related article: Best Business Loans ]
  • Business grants. Business grants are similar to loans, but do not need to be paid back. Business grants are typically very competitive and come with stipulations that the business must meet to be considered. When securing a small business grant , look for ones specific to your situation. Options include minority-owned business grants, grants for women-owned businesses and government grants .
  • Startups that require significant funding up front may want to bring on an angel investor . Investors can provide several million dollars or more to a fledgling company in exchange for a hands-on role in running your business.
  • Alternatively, you can launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers. Crowdfunding has helped numerous companies in recent years, and dozens of reliable crowdfunding platforms are designed for different types of businesses. 

You can learn more about each of these capital sources and more in our guide to startup finance options . 

Choose the right business bank.

When you’re choosing a business bank , size matters. Marcus Anwar, co-founder of OhMy Canada, recommends smaller community banks because they are in tune with the local market conditions and will work with you based on your overall business profile and character. 

“They’re unlike big banks that look at your credit score and will be more selective to loan money to small businesses,” Anwar said. “Not only that, but small banks want to build a personal relationship with you and ultimately help you if you run into problems and miss a payment. Another good thing about smaller banks is that decisions are made at the branch level, which can be much quicker than big banks, where decisions are made at a higher level.” 

Anwar believes that you should ask yourself these questions when choosing a bank for your business: 

  • What is important to me?
  • Do I want to build a close relationship with a bank that’s willing to help me in any way possible?
  • Do I want to be just another bank account, like big banks will view me as? 

choose your vendors

Ultimately, the right bank for your business comes down to your needs. Writing down your banking needs can help narrow your focus to what you should be looking for. Schedule meetings with various banks and ask questions about how they work with small businesses to find the best bank for your business. [Read related article: Business Bank Account Checklist: Documents You’ll Need ]

Financially, you should perform a break-even analysis, consider your expenses and funding options, and choose the right bank for your business.

4. Determine your legal business structure.

graphic of a businessperson sitting at a laptop near signs

Before registering your company, you need to decide what kind of entity it is. Your business structure legally affects everything from how you file your taxes to your personal liability if something goes wrong. 

  • Sole proprietorship: You can register for a sole proprietorship if you own the business independently and plan to be responsible for all debts and obligations. Be warned that this route can directly affect your personal credit.
  • Partnership: Alternatively, as its name implies, a business partnership means that two or more people are held personally liable as business owners. You don’t have to go it alone if you can find a business partner with complementary skills to your own. It’s usually a good idea to add someone into the mix to help your business flourish.
  • Corporation: If you want to separate your personal liability from your company’s liability, consider the pros and cons of corporations (e.g., an S corporation or C corporation ). Although each type of corporation is subject to different guidelines, this legal structure generally makes a business a separate entity from its owners. Therefore, corporations can own property, assume liability, pay taxes, enter contracts, sue and be sued like any other individual. “Corporations, especially C corporations, are especially suitable for new businesses that plan on ‘going public’ or seeking funding from venture capitalists in the near future,” said Deryck Jordan, managing attorney at Jordan Counsel.
  • Limited liability company: One of the most common structures for small businesses is the limited liability company (LLC). This hybrid structure has the legal protections of a corporation while allowing for the tax benefits of a partnership. 

Ultimately, it is up to you to determine which type of entity is best for your current needs and future business goals. It’s important to learn about the various legal business structures available. If you’re struggling to make up your mind, discussing the decision with a business or legal advisor is a great idea.

Did you know? You need to choose a legal structure for your business, such as a sole proprietorship, partnership, corporation or LLC .

5. Register with the government and IRS.

graphic of a person sitting at a laptop in front of an eagle crest

You will need to acquire business licenses before you can legally operate your business. For example, you must register your business with federal, state and local governments. There are several documents you must prepare before registering.

Articles of incorporation and operating agreements

To become an officially recognized business entity, you must register with the government. Corporations need an articles of incorporation document, which includes your business name, business purpose, corporate structure, stock details and other information about your company. Similarly, some LLCs will need to create an operating agreement.

Doing business as (DBA)

If you don’t have articles of incorporation or an operating agreement, you will need to register your business name, which can be your legal name, a fictitious DBA name (if you are the sole proprietor), or the name you’ve come up with for your company. You may also want to take steps to trademark your business name for extra legal protection. 

Most states require you to get a DBA. You may need to apply for a DBA certificate if you’re in a general partnership or a sole proprietorship operating under a fictitious name. Contact or visit your local county clerk’s office to ask about specific requirements and fees. Generally, there is a registration fee involved. 

Employer identification number (EIN)

After you register your business, you may need to get an employer identification number from the IRS. While this is not required for sole proprietorships with no employees, you may want to apply for one anyway to keep your personal and business taxes separate, or to save yourself the trouble if you decide to hire someone later on. The IRS has provided a checklist to determine whether you will require an EIN to run your business. If you do need an EIN, you can register online for free. 

Income tax forms

You must file certain forms to fulfill your federal and state income tax obligations . Your business structure determines the forms you need. You will need to check your state’s website for information on state-specific and local tax obligations. Once you set this all up, the best online tax software can help you file and pay your taxes quarterly and annually.

“You might be tempted to wing it with a PayPal account and social media platform, but if you start with a proper foundation, your business will have fewer hiccups to worry about in the long run,” said Natalie Pierre-Louis, licensed attorney and owner of NPL Consulting. 

Federal, state, and local licenses and permits

Some businesses may also require federal, state or local licenses and permits to operate. Your local city hall is the best place to obtain a business license. You can then use the SBA’s database to search for state and business type licensing requirements. 

Businesses and independent contractors in certain trades are required to carry professional licenses. A commercial driver’s license (CDL) is one example of a professional business license. Individuals with a CDL can operate certain types of vehicles, such as buses, tank trucks and tractor-trailers. A CDL is divided into three classes: Class A, Class B and Class C. 

You should also check with your city and state to find out if you need a seller’s permit that authorizes your business to collect sales tax from your customers. A seller’s permit goes by numerous names, including resale permit, resell permit, permit license, reseller permit, resale ID, state tax ID number, reseller number, reseller license permit or certificate of authority. 

It’s important to note that these requirements and names vary from state to state. You can register for a seller’s permit through the state government website of the state(s) you’re doing business in. 

Jordan says that not all businesses need to collect sales tax (or obtain a seller’s permit).

“For example, New York sales tax generally is not required for the sale of most services (such as professional services, education, and capital improvements to real estate), medicine or food for home consumption,” Jordan said. “So, for example, if your business only sells medicine, you do not need a New York seller’s permit. But New York sales tax must be collected in conjunction with the sale of new tangible personal goods, utilities, telephone service, hotel stays, and food and beverages (in restaurants).”

Register key documents like articles of incorporation or an operating agreement, a DBA, an EIN, income tax forms, and other applicable licenses and permits.

6. Purchase an insurance policy.

graphic of a businessperson in a suit in front of a large insurance form

It might slip your mind as something you intend to get around to eventually, but purchasing the right insurance for your business is an important step to take before you officially launch. Dealing with incidents such as property damage, theft or even a customer lawsuit can be costly, and you need to be sure that you’re properly protected. 

Although you should consider several types of business insurance , there are a few basic insurance plans that most small businesses can benefit from. For example, if your business will have employees, you will at least need to purchase workers’ compensation and unemployment insurance.

You may also need other types of coverage, depending on your location and industry, but most small businesses are advised to purchase general liability (GL) insurance, or a business owner’s policy. GL covers property damage, bodily injury, and personal injury to yourself or a third party.

If your business provides a service, you may also want professional liability insurance. It covers you if you do something wrong or neglect to do something you should have done while operating your business.

7. Build your team.

graphic of a group of businesspeople gathered around a table

Unless you’re planning to be your only employee, you’ll need to recruit and hire a great team to get your company off the ground. Joe Zawadzki, general partner at AperiamVentures, said entrepreneurs need to give the “people” element of their businesses the same attention they give their products. 

“People build your product,” Zawadzki said. “ Identifying your founding team , understanding what gaps exist, and [determining] how and when you will address them should be top priority. Figuring out how the team will work together … is equally important. Defining roles and responsibilities, division of labor, how to give feedback, or how to work together when not everyone is in the same room will save you a lot of headaches down the line.”

8. Choose your vendors.

graphic of a businessman in front of business profile cards

Running a business can be overwhelming, and you and your team probably aren’t going to be able to do it all on your own. That’s where third-party vendors come in. Companies in every industry, whether that’s HR or business phone systems , exist to partner with you and help you run your business better. For example, with a business phone system, you can design an IVR system to automatically route your callers to the right representatives.

When you’re searching for B2B partners, choose carefully. These companies will have access to your most vital and potentially sensitive business data, so finding someone you can trust is critical. In our guide to choosing business partners , our expert sources recommended asking potential vendors about their experience in your industry, their track record with existing clients, and what kind of growth they’ve helped other clients achieve. 

Not every business will need the same type of vendors, but there are common products and services that almost every business will need. Consider the following functions that are a necessity for any type of business.

  • Enabling multiple customer payment types: Offering multiple payment options will ensure you can make a sale in whatever format is easiest for the target customer. Compare options to find the best credit card processing provider to ensure you’re getting the best rate for your business. That’s because small business credit card processing is often a direct route to more revenue and a larger customer base.
  • Taking customer payments: Set up a point-of-sale (POS) system so that you have a state-of-the-art interface for making sales. The best POS systems couple this payment technology — which largely overlaps with credit card processing — with inventory management and customer management features. As such, POS systems are especially important if you plan to sell products instead of offering services.
  • Managing finances: Many business owners manage their own accounting functions when starting their business, but as your business grows, you can save time by hiring an accountant , or by choosing the right accounting software provider .

9. Brand yourself and advertise.

businessperson at a computer in front of a large lightbulb icon

Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your literal or figurative doors for business.

  • Company website: Take your reputation online and build a company website . Many customers turn to the internet to learn about a business, and a website is a digital proof that your small business exists. It is also a great way to interact with current and potential customers.
  • Social media: Use social media to spread the word about your new business, perhaps as a promotional tool to offer coupons and discounts to followers once you launch. The best social media platforms to use will depend on your target audience.
  • CRM: The best CRM platforms allow you to store customer data to improve how you market to them. A well-thought-out email marketing campaign can do wonders for reaching customers and communicating with your audience. To be successful, you will want to strategically build your email marketing contact list .
  • Logo: Create a logo to help people easily identify your brand, and use it across all of your platforms.

Keep your digital assets up to date with relevant, interesting content about your business and industry. According to Ruthann Bowen, chief marketing officer at EastCamp Creative, too many startups have the wrong mindset about their websites. 

“The issue is they see their website as a cost, not an investment,” Bowen said. “In today’s digital age, that’s a huge mistake. The small business owners who understand how critical it is to have a great online presence will have a leg up on starting out strong.” 

Creating a marketing plan that goes beyond your launch is essential to building a clientele because it should continually get the word out about your business. This process is just as important as providing a quality product or service, especially in the beginning. 

Ask customers to opt into your marketing communications.

As you build your brand, ask your customers and potential customers for permission to communicate with them. The easiest way to do this is by using opt-in forms of consent. These forms allow you to contact them with further information about your business, according to Dan Edmonson, founder and CEO of Dronegenuity. 

“These types of forms usually pertain to email communication and are often used in e-commerce to request permission to send newsletters, marketing material, product sales, etc. to customers,” Edmonson said. “Folks get so many throwaway emails and other messages these days that, by getting them to opt in to your services transparently, you begin to build trust with your customers.” 

Opt-in forms are a great starting point for building trust and respect with potential customers. Even more importantly, these forms are required by law. The CAN-SPAM Act of 2003 sets requirements for commercial email by the Federal Trade Commission. This law doesn’t just apply to bulk email; it covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” Each email violating this law is subject to fines of more than $40,000.

Tip: Create a strategic marketing campaign that combines various marketing channels, like a company website, social media, email newsletters and opt-in forms.

10. Grow your business.

graphic of a businessperson in a suit flying hear up arrows and graphs

Your launch and first sales are only the beginning of your task as an entrepreneur. To make a profit and stay afloat, you always need to be growing your business. That takes time and effort, but you’ll get out of your business what you put into it. 

Collaborating with more established brands in your industry is a great way to achieve growth. Reach out to other companies and ask for some promotion in exchange for a free product sample or service. Partner with a charity organization, and volunteer some of your time or products to get your name out there. 

While these tips will help launch your business and get you set to grow, there’s never a perfect plan. You want to ensure you prepare thoroughly for starting a business, but things will almost certainly go awry. To run a successful business, you must adapt to changing situations. 

FAQs about starting a business

What are the four basics for starting a business.

The four basics for starting a business are your business name, business structure, business registration certificate and all your other licenses. You must take the proper legal and regulatory steps in each of these four areas before you launch your business. Obtaining external funding and putting together a business plan are also smart moves, but they aren’t legal prerequisites.

How can I start my own business with no money?

You can launch a successful business without any startup funds. Work on a business idea that builds on your skill set to offer something new and innovative to the market. While developing a new business, keep working in your current position to reduce the financial risk.

Once you’ve developed your business idea and are ready to start on a business plan, you’ll need to get creative with funding. You can raise money through investments by pitching your idea to financial backers. You could also gather funding through crowdsourcing platforms like Kickstarter, or set aside a certain amount of money from your weekly earnings to put toward a new business. Finally, you can seek loan options from banks and other financial institutions to get your company up and running.

Check out our list of low-cost business ideas for inspiration on how to start a new company when you’re on a tight budget.

What is the easiest business to start?

The easiest business to start is one that requires little to no financial investment upfront, and no extensive training to learn the business. A dropshipping company, for example, is one of the easiest types of new business to launch. Dropshipping requires no inventory management, which saves you the hassle of buying, storing and tracking stock. 

Instead, another company fulfills your customer orders at your behest. This company manages the inventory, packages goods, and ships out your business orders. To start, create an online store by selecting curated products from the catalog available through partners.

Check out our list of businesses you can start quickly for ideas on how to launch your next business with ease.

Which types of businesses can I start from home?

In today’s world of remote work, you may be thinking of an online business idea . Any online-only business that doesn’t require inventory should be easy to start from home. Ideas that fall within this category include but aren’t limited to copywriting businesses, online tutoring operations and dropshipping businesses. Anything you’re good at or passionate about that you can do from home, and for which demand exists, can make for a great home business. 

When is the best time to start a business?

Each person’s ideal timeline for starting a new business will be different. Start a business only when you have enough time to devote your attention to the launch. If you have a seasonal product or service, then you should start your business one quarter before your predicted busy time of the year. Spring and fall are popular times of year to launch for nonseasonal companies. Winter is the least popular launch season because many new owners prefer to have their LLC or corporation approved for a new fiscal year.

Max Freedman and Skye Schooley also contributed to this article. Source interviews were conducted for a previous version of this article.

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How to start and fund your own business

Learn from the Small Business Administration (SBA) how to start and fund a small business, from researching the market to launching your new business.

How to start a business

The SBA can help you learn how to start your own business with 10 Steps to Start a Business .

The SBA's Business Guide covers other important aspects of running a business. These include:

  • Paying business taxes
  • Getting business insurance
  • Applying for licenses and permits
  • Hiring and managing employees

Business funding options

Learn from the SBA about sources for funding your business . They include:

  • Self-funding

Funding resources for specific groups

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  • Women-owned businesses
  • Minority-owned businesses
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Business startup checklist: How to launch a startup step by step

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Here, we'll walk you through all the things you need to launch a startup. And you can download our business startup checklist to keep you on track as you take your first steps as a new business owner .

Checklist for starting a business

Image of Zapier's business startup checklist

1. Write a business plan

A business plan will help you nail down your goals and expectations and give you a roadmap for getting your company off the ground. If you plan to pitch investors or apply for a business loan, you'll need a business plan—most won't even consider a pitch unless there's a business plan attached.

Parts of a business plan

Depending on the complexity of your business idea, a business plan can be as short as a page or as big as a thick, data-packed document. No matter how simple or complex, every business plan should have at least a few key parts:

An executive summary , or a top-level outline of everything in the business plan.

A business description , including your company's structure, industry, value proposition , background information, and both short- and long-term business objectives.

A market analysis that evaluates where your business stands in relation to competitors, target customers, and industry trends.

A description of your products or services.

Financial projections like pricing and sales strategy, profit goals, and investor details.

An operational overview laying out the logistical "how"s of your business, including logistics, distribution, and production plans.

Business planning software

If you have any basic business experience or know-how, you can probably get through writing a business plan on your own, but if you're feeling totally lost or if you just want something to help move you through the steps more efficiently, business plan writing software might be the way to go. 

BizPlan and Enloop are two examples of business plan platforms with reasonable monthly costs. IdeaBuddy is another platform that's meant to be used earlier in the process when you're still fleshing out ideas to help develop and refine your business concept, then guide you toward a formalized plan. 

2. Estimate your startup costs

Calculating your startup costs will help you appeal to investors and estimate when your new business will start to become profitable. 

Types of startup costs

To begin, you'll need to calculate your exact startup costs. These may include:

One-time startup costs: state business registration fees, lease deposits, etc.

Labor costs: your salary plus worker salaries

Overhead costs: monthly office rent, utilities, taxes, computer equipment, production costs 

Spreadsheets are your friend with planning business finances—and we have a set of business budget templates to help you estimate monthly and one-time expenses for your business.

Start saving

Just like homeowners need an emergency fund for when the roof starts leaking, you also need an emergency fund for your new business. How much you need depends on the size of your operation and whether you're keeping your current job or going all-in on your new endeavor. It takes most startups at least a few months (and usually more) to become profitable, so if your startup is going to be your main source of income, you'll need at least a few months of operating expenses plus your own living expenses stashed away.

Find funding

Skip the family loan and second mortgage. Better loan options include the Small Business Association , your local bank, or new types of online lenders .

You might even start a crowdfunding campaign to generate cash—which is also a good way to test out your business idea's viability. Remember, though, that your purpose isn't to raise money. Your purpose is to create a viable business with products or services that genuinely help your customers.

3. Register your business

Before we dive into the details of business registration, a disclaimer: what we're providing here is a basic overview of the general requirements for most businesses in the United States. If you operate internationally or work in some niche industry like long-haul tobacco and airplane fuel shipping , these guidelines are one hundred percent guaranteed not to cover everything you need to know about registering your business. 

Even if your company is fairly small, there may be specific requirements in your state or county that aren't covered here. No matter what, make sure you do your own research with local and state governments or consult with a lawyer to determine the legal requirements that apply to you.

Pick a business structure

Business structures boil down to four main types: sole proprietorships, partnerships, limited liability companies, and corporations. For legal and tax purposes, decide which type you'll operate under—though you can always switch to a different business type as your company grows.

Sole proprietorships: This is the simplest type of business to start and run. It means that you are the company, and all assets and debts of the company are yours too. This also means you'll be personally liable for all business obligations like lawsuits or unpaid debts, so this is the riskiest business structure. 

Partnerships: T hese are like sole proprietorships, except there's more than one owner. Co-owners typically structure their business relationship with partnership operating agreements. Partners split the company's legal and financial obligations and also share in the profits.

Limited Liability Companies and Partnerships (LLCs and LLPs): When you form an LLC or LLP, you work as a "member" of the company, along with any company partners. If the company goes into debt or gets sued, your personal assets are protected. Compared to corporations, there's less paperwork and smaller startup costs.

Corporations: When you incorporate, you create a separate legal entity that owns all of the assets and liabilities for the company. Corporations are usually more attractive to outside investors—you can "go public" with an initial public offering (IPO) and raise money through selling stock in the company. 

Illustration of hands shaking, a person working alone in an office and a group of three individuals representing the four business structure types

Choose a business name

Start by writing down every single name that pops into your head, including the ridiculous names ( bad idea brainstorms work!). This will get your creativity flowing. Plus, you can pull elements that you like from the throwaway names and incorporate them into your more serious ideas.

If you plan to register a trademark on your business's name, keep in mind what can't be trademarked:

Any person's name who hasn't given expressed permission

Swears or other offensive content

Government flags and insignia

Your name also needs to meet the U.S. Trademark Office's requirements for "distinctiveness," which just means your trademark needs to be unique enough to avoid confusion between yourself and other similarly named businesses.

Register your company

All businesses except sole proprietors with no employees must register with the IRS and obtain an Employer Identification Number (EIN). This is your company's federal tax identification, which you'll use when paying taxes, opening a bank account, applying for business licenses, and hiring employees. 

You may need to register your business with your state government. Use the Small Business Administration's state lookup tool to find information for your state. Similarly, contact your local government office to find out if additional registrations or permits are necessary.

4. Open accounts and obtain permits

With your business plan in hand, it's time to lay the operational and financial groundwork to get your company off the ground. 

Open a company bank account

Even if you run a sole proprietorship and your business is just you, life will be easier if you have a separate bank account to manage your business finances. If you want to accept credit card payments either online or in person, look into credit card payment processing services .

Get licenses and permits

In certain industries, you'll need licenses and permits in order to operate legally. This usually applies in industries where there's a risk of damage to the customer—think construction, hair salons, and financial consulting. Some municipalities also require home-based businesses to hold a "home occupation permit," so make sure you find out what licenses you need before you open your doors, no matter what industry you're in.

Find out if you need a Sales Tax Permit

If you sell physical products and you operate in a state that collects sales taxes, you likely need to register for a Sales Tax Permit. Most states administer these permits for free or for a nominal fee.

Illustrated table showing the common types of business licenses and permits

5. Set up a financial accounting system

Money can get complicated very quickly, so you want to have an automated system for financial accounting, budgeting, and documentation before you start making any sales. 

Basic bookkeeping 101

There are a number of bookkeeping records that small business owners need to update on a regular basis to keep their business finances in order. These tasks include:

Income statements

Balance sheets

Cash flow statements

Bills and invoices

Quarterly financial statements

Tax returns

Unless you're very confident in your skills with an Excel spreadsheet, you should invest in accounting software or consider hiring a part-time bookkeeper . Check out Zapier's list of the best accounting software for small businesses for some apps to try out.

Understand your tax liability

Business taxes are very different from employee taxes. The biggest difference is that small businesses are required to file taxes quarterly instead of annually. You need to have enough cash on hand to remit payment to the IRS every three months, which can take some getting used to.

If you have employees, you'll also need to keep in mind that employee taxes are paid to the government by the employer. If you've ever looked at your own pay stubs, you'll know that each includes a record of what taxes were taken out of your paycheck. Those taxes aren't taken by the government directly—they're taken out by the employer, who is then responsible for sending employees' taxes to the IRS.

6. Buy business insurance

As soon as you hire employees, open a physical location, or begin to scale your business, you'll need liability insurance of some sort. General liability insurance covers you in case someone is injured on your property or as a result of your company's activities.

Additional policies that are common for new businesses include:

Professional liability: Covers you in case an error or omission on your part costs your clients money.

Workers' compensation: Covers medical expenses and lost wages for employees who are injured while working. 

Business interruption insurance: Helps replace lost revenue if your business is forced to close temporarily due to a natural disaster or other event.

Property insurance: Covers your physical property, from company equipment to office or warehouse space.

7. Create a management system

For a single-person business, a management system can be as simple as a set of to-do lists for keeping track of budgets and schedules. Larger businesses will need to formalize processes for managing workflows, finances, schedules, team organization, and more.

Management setup

When getting your management system up and running, focus on the essentials. At a minimum, you'll need a structure for managing:

Calendars and scheduling

Customer communications

Budgets, invoices, and other financial documents

Industry-specific KPIs

Purchasing and order fulfillment

If you're starting with a team, you'll also want to put together an organizational chart . Determining each person's responsibilities will help eliminate confusion and oversights.

Invest in branding and marketing

The fun part, of course, comes at the very end of all the operational logistics. Take some time to think through your marketing strategy before launching your business. At a minimum, you'll need to start with a website, a logo, and social media accounts.

Establishing a brand identity

Start by thinking through how you want to come off to others as a brand. Usually, your brand voice will align closely with the industry you're in—financial and legal firms tend to be serious and authoritative, while creative agencies need to be witty and innovative.

Consistency is far more important than trying for fancy, versatile, or expensive branding. A company with a simple, casual tone and one or two brand colors and basic designs will do far better than a company that tries out a different tone with each social post.

List of things needed to start a business

Starting a business doesn't need to be an overwhelming undertaking. With a bit of organizational planning and this business startup checklist , you can get your company up and running quickly. Of course, the more tasks you automate on this list, the smoother everything will run, and the quicker you'll be able to start making sales. Learn more with this small business guide to automation .

Related reading:

Start a business: 22 low-cost business ideas  

9 books every small business owner should read

11 small business advertising ideas for your business

The best free small business software

20 free proposal templates to ace your pitch

This article was originally published in October 2016 by Melanie Pinola and has also had contributions from Amanda Pell. The most recent update was in May 2023.

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Amanda Pell

Amanda is a writer and content strategist who built her career writing on campaigns for brands like Nature Valley, Disney, and the NFL. When she's not knee-deep in research, you'll likely find her hiking with her dog or with her nose in a good book.

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1. Find the right opportunity

2. write a business plan, 3. choose a business structure, 4. get a federal tax id, 5. apply for licenses and permits, 6. open a business bank account, 7. understand your startup financing options, 8. get a business credit card, 9. choose the right accounting software, 10. prepare to pay your taxes, 11. protect yourself with business insurance, 12. establish your online presence, 13. set up a payments system, 14. hire employees, 15. get financing to grow your business.

Starting a business takes research, smarts and self-confidence — and a measure of fearlessness. You may already be asking yourself: How can I start my own business with no money? What's the right equipment? Am I getting the best advice?

Here are the essential steps on how to start a business, from choosing the right business idea, creating a solid business plan and structuring your company to opening a business bank account and choosing the right accounting software.

» MORE: 5 steps to turn your side gig into a full-fledged business

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ZenBusiness

What business should you start? It depends on your expertise, plus how much time and money you’re able to invest. Some small-business ideas can be launched from home with little overhead, and e-commerce and remote businesses have become increasingly common in the wake of the COVID-19 pandemic.

As you narrow your scope, you also want to be sure that your idea can actually make money . If you’re not sure what kind of business you want to run, use these lists to get the wheels turning:

50 best small-business ideas.

The 23 most profitable business ideas .

40 startup ideas to try .

16 e-commerce business ideas.

40 home business ideas to explore .

44 online business ideas you can start now .

Looking for tools to help grow your business?

Tell us where you're at in your business journey, and we'll direct you to the experience that fits.

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A strong business plan can help you prepare for every aspect of your business. Plus, you’ll need one to present to potential investors and lenders. This document should include details of the products or services you plan to offer, how you plan to make money, who you need on your team and more.

You’ll also want to include detailed financial projections, budgets and thorough explanations of how you plan to spend investor dollars or loans. Since cash flow projections will fluctuate as you adjust projected income and expenses, it helps to think of the plan’s financials as a living, changing document.

Ultimately, your business plan will help you chart a course for your business, anticipate potential roadblocks and work out how to overcome them — and will likely go through multiple iterations before your idea comes to fruition. Industry colleagues and accountants may be able to provide valuable feedback on how realistic your projections look and point out any overlooked costs.

How to write a business plan, step by step .

How to create a business budget .

Best business budgeting software tools .

5 tips to write a successful business plan . 

How to write a successful business plan for a loan .

The legal structure of your business can affect everything from your taxes to what you're liable for. For example, there’s no legal distinction between a sole proprietorship and its owner. Limited liability companies (LLCs) and their owners, however, are considered separate entities by law, which can provide more personal asset protection.

Talking with a tax professional can help you choose the right business structure for you. And you can change your structure as your business grows.

How to choose the right business structure .

Pros and cons of a limited liability company .

LLC vs. sole proprietorship: How to choose .

Partnership vs. corporation: How to choose .

Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. Even if you don’t have employees, there are benefits to getting an EIN. It’s free to apply and the online application only takes a few minutes.

How to apply for an employer identification number .

Benefits of getting an EIN (even if you don’t have to) .

In general, restaurants need health inspections and liquor licenses. Hair stylists need cosmetology licenses. Your city may require you to apply for a business license regardless of what field you’re in. And if you’re renovating a space to sell products or perform services, you may need to ask local officials for a zoning change.

Set aside time early on to find out what licenses and permits you need before you can open your doors. While you don’t typically need a lawyer to apply for a business license, they can help you navigate the process and review other documents, like lease agreements or loans, before you sign them. Industry associations, city officials who work on economic development issues and local business associations, like your Chamber of Commerce, may be able to offer advice, too.

How to get a business license .

Do you need a business license to sell online?

How to find a startup lawyer . 

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Keeping your business and personal finances separate is key to managing your business finances. It’s standard bookkeeping hygiene and makes it easier to deduct business expenses come tax time. A business bank account can help, and they’re simple to set up.

Best business bank accounts . 

Best business bank accounts for freelancers .

Best free business checking accounts .

Best business bank accounts for LLCs .

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Most businesses need a little capital to get started. However, the majority of business loans are not available to businesses that have been operating for less than six months, and most online lenders prefer at least a year in business. Startups should consider alternative financing options, or try to leverage other strengths of their business, such as strong credit or collateral. If your business does qualify for a loan, be sure to pay attention to interest rates, potential prepayment fees and personal liability terms.

Found Small Business Banking

Found Small Business Banking

Many business owners rely on their own savings to get started. You can also look into crowdfunding, personal loans, business grants and more. High-growth-potential startups may also be eligible for equity financing, which gives partial ownership, or equity, to investors in exchange for capital.

How do business loans work?

Best startup business loans.

Startup business grants .

Asset-based lending options.

Types of startup funding.

Crowdfunding for business .

Is equity financing right for your business?

Funding your business with a personal loan .

Is your to-do list overwhelming?

Business credit cards can also be used as a short-term financing solution to help you purchase necessary supplies and pay bills while cash flow is still shaky. Just be sure to spend within your limit and pay off your balance in full each month so you don’t get into a cycle of debt. Startup financing aside, business credit cards also make it easier to keep business and personal finances separate. As an added bonus, you can also earn rewards, such as cash back, on the money you spend.

Usually, you can qualify for a business credit card based on your personal credit score.

What is a business credit card?

How to get a business credit card .

Best small-business credit cards .

Best business credit cards for new businesses .

Best 0% APR business credit cards.

It’s essential that you keep records that show how much revenue you’re bringing in and how much you’re spending. Accounting software helps you track and analyze these numbers by generating reports and recording sales trends — and there are even some free options.

As your business grows, you may want to start working with a bookkeeper . This person can help ensure your records are complete and accurate, which makes it easier to file your taxes, apply for financing and more.

Best accounting software for small businesses .

Best online bookkeeping services .

Bookkeeping basics for small businesses. 

Best free accounting software .

Know these 4 business financial metrics to track performance .

You'll have some new tax responsibilities as a business owner — including, potentially, the need to pay taxes throughout the year, not just during tax season. But you'll probably discover some new tax breaks , too.

Filing taxes can be complex, especially as a small-business owner. Developing a relationship with a tax professional early on can help set you up for success, and they can be a trusted adviser to your business later on.

A tax guide for small-business owners.

Self-employment tax, explained.

Best tax software for small businesses .

How estimated quarterly taxes work .

How to find the right tax advisor for your business .

It's important to protect your business and your personal assets, and business insurance exists to do just that. NerdWallet recommends that every business carry general liability insurance in case of legal claims.

You may also need insurance to comply with a contract, like to set up a booth at an event or work as a subcontractor on a larger project.

Best small-business insurance providers .

How much does business insurance cost?

What is general liability insurance?

What is a business owner’s policy (BOP)?

An online presence is critical for almost every business — especially if you want to sell products online. Setting up a website and social media profiles early on, even if they’re simple, can help you start developing relationships with potential customers right away.

Here’s what you need to know to start your business website:

How to build an e-commerce website .

The ultimate guide to small-business marketing .

The best ways to promote your business on social media .

6 Instagram tips for small-business owners .

8 best e-commerce website builders for small businesses .

The do’s and don’ts of using Facebook to drive business sales .

5 best places to advertise your business online .

If your business takes credit and debit cards, you'll likely need a payment processor and point-of-sale (POS) system. Lots of POS system providers double as processing companies, which can make the decision-making process simple. Remember to consider upfront hardware costs for card readers or POS registers, monthly POS software fees and processing fees. Online payments typically have higher processing fees than in-person payments, so be sure to consider the full range of fees when choosing your provider.

How to accept credit card payments.

What is credit card processing and how does it work?

Cheapest credit card processing companies.

Best point-of-sale (POS) systems .

Best credit card processing companies .

Best credit card readers for small businesses .

You may not need to hire employees right away — and some small-business owners prefer to remain solopreneurs throughout the life of their business. But if you do choose to hire, you’ll probably need workers’ compensation insurance, payroll software and more. Here’s what goes into hiring your first employees.

Ready to hire your first employee? Prep with these steps .

Strategies to attract good employees.

Tips for hiring remote workers.

Strategies to help retain employees.

How to choose the right payroll software for your business .

Best payroll software for small businesses. 

What is workers’ compensation insurance?

Once you’ve been in business for six to 12 months, you may start qualifying for business loans. Financing can help your business grow and expand — by buying equipment, renovating an office or expanding your inventory, for instance — or float you through a slow season while you prepare for increased future revenue.

Here’s what you need to know about business loans, lines of credit and other financing options.

How to get a business loan .

SBA loans: What they are and how to qualify .

Equipment financing: What it is and top lenders.

Best small-business loans .

Types of business loans.

Should you grow your business? 6 questions to help you decide .

On a similar note...

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Starting a Business: How to Start a Business in 12 Steps Starting a business doesn't have to be difficult. Check out this 12-step guide to start your entrepreneurial endeavor the right way.

By Matthew McCreary

For millions of people, starting their own business is a key component of the American dream. But it's one thing to have a stellar business idea; it's another to turn that idea into a fully-fledged, profitable enterprise. Starting a new business might be your dream, and there's no doubt that it can be difficult!

It doesn't have to be. In fact, you can start a business entity with 12 steps, even if you don't have any business experience and are still looking for an idea.

This article will guide you through the process of becoming a small business owner, covering everything from financial planning to choosing a professional service or good to provide.

Related: 10 Mistakes to Avoid When Starting an Online Business

1. Evaluate yourself.

Let's start with the most basic question: Why do you want to start a business? Use this question to guide what kind of business you want to start. If you want extra money, maybe you should start a side hustle . If you want more freedom, maybe it's time to leave your 9-to-5 job and start something new.

Once you have the reason, start asking yourself even more questions to help you figure out the type of business you should start, and if you have what it takes.

  • What skills do you have?
  • Where does your passion lie?
  • Where is your area of expertise?
  • How much can you afford to spend, knowing that most businesses fail?
  • How much capital do you need? What are the startup costs and what small business loans will you need to take out?
  • What sort of lifestyle do you want to live?
  • Are you even ready to be an entrepreneur ?

Be brutally honest with your answers. This will create a foundation for everything you do moving forward, so it's better to know the truth now than later.

Related: 15 Free Online Learning Sites Every Entrepreneur Should Visit

2. Think of a business idea.

Do you already have a killer business idea ? If so, congratulations! You can proceed to the next section. If not, there are a ton of ways to start brainstorming for a good idea. An article on Entrepreneur, "8 Ways to Come Up With a Business Idea," helps people break down potential business ideas . Here are a few pointers from the article:

  • Ask yourself what's next. What technology or advancement is coming soon, and how will that change the business landscape as we know it? Can you get ahead of the curve?
  • Fix something that bugs you. People would rather have less of a bad thing than more of a good thing. If your business can fix a problem for your customers, they'll thank you for it.
  • Apply your skills to an entirely new field. Many businesses and industries do things one way because that's the way they've always been done. In those cases, a fresh set of eyes from a new perspective can make all the difference.
  • Use the better, cheaper, faster approach. Do you have a business idea that isn't completely new? If so, think about the current offerings and focus on how you can create something better, cheaper or faster.

Also, go out and meet people and ask them questions, seek advice from other entrepreneurs, research ideas online or use whatever method makes the most sense to you.

And, if you've exhausted all your options and you're still stuck, here are 55 great business options you can start. Some other options include running an eCommerce business or SEO marketing firm, both competitive but rewarding industries.

Related: 63 Businesses to Start for Under $10,000

3. Do market research.

Is anyone else already doing what you want to start doing? If not, is there a good reason why?

Start researching your potential rivals or partners within the market by using this guide . It breaks down the objectives you need to complete with your research and the methods you can use to do just that. For example, you can conduct interviews by telephone or face to face. You can also offer surveys or questionnaires that ask questions like "What factors do you consider when purchasing this product or service?" and "What areas would you suggest for improvement?"

Just as importantly, it explains three of the most common mistakes people make when starting their market research, which are:

  • Using only secondary research.
  • Using only online resources.
  • Surveying only the people you know.

Related: How to Start a Business Online

4. Get feedback.

Let people interact with your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people will become your first brand advocates, especially if you listen to their input and they like the product.

One of the easiest ways to utilize feedback is to focus on "The Lean Startup" approach (read more about it here ), but it involves three basic pillars: prototyping, experimenting and pivoting. By pushing out a product, getting feedback and then adapting before you push out the next product, you can constantly improve and make sure you stay relevant.

Just realize that some of that advice, solicited or not, will be good. Some of it won't be. That's why you should have a plan on how to receive feedback.

Here are six steps for handling feedback :

  • Stop! Your brain will probably be in an excited state when receiving feedback, and it might start racing to bad conclusions. Slow down and take the time to consider carefully what you've just heard.
  • Start by saying "thank you.' People who give you negative feedback won't expect you to thank them for it, but doing so will probably make them respect you and encourage them to continue be honest in the future.
  • Look for the grain of truth. If someone doesn't like one idea, it doesn't mean they hate everything you've just said. Remember that these people are trying to help, and they might just be pointing out a smaller problem or solution that you should look into further.
  • Seek out the patterns. If you keep hearing the same comments, then it's time to start sitting up and taking notice.
  • Listen with curiosity. Be willing to enter a conversation where the customer is in control.
  • Ask questions. Figure out whysomeone liked or didn't like something. How could you make it better? What would be a better solution?

Also, one way to help you get through negative feedback is to create a "wall of love," where you can post all of the positive messages you've received. Not only will this wall of love inspire you, but you can use these messages later when you begin selling your product or service. Positive reviews online and word-of-mouth testimonials can help make a big difference.

Related: 12 Mind Tricks That Will Make People Like You and Help You Get Ahead

5. Make it official.

Get all of the legal aspects out of the way early. That way, you don't have to worry about someone taking your big idea, screwing you over in a partnership or suing you for something you never saw coming. You'll not only have to deal with the federal government and IRS but your state and local governments as well. A quick checklist of things to shore up might include:

  • Business structure ( LLC, corporation or a partnership, to name a few. )
  • Business name
  • Register your business
  • Federal tax ID
  • State tax ID
  • Permits ( more on permits here )
  • Necessary bank account
  • Trademarks , copyrights or patents

Making it official also means considering self-employment tax or business insurance, depending on the legal structure you choose.

While some things you can do on your own, it's best to consult with a lawyer when starting out, so you can make sure you've covered everything that you need.

Related: 10 Questions to Ask Before Hiring a Small-Business Attorney

Choose your business type

One of the most important elements of making your business official is choosing the right business type or business model. There are a few different types of businesses you can start, including:

  • Sole proprietorship , which is a business type that includes one employee (yourself). Doing business as a proprietorship could be cost-effective since you may not even need a business license
  • A business partnership , which includes two employees (such as yourself and one other person)
  • LLC or limited liability companies , which are preferred business types for many entrepreneurs, as they limit personal liability in the event of a lawsuit. They also provide certain tax breaks. LLCs are ideal for small to medium-sized businesses
  • S or C corporations. These business types are for larger enterprises with dozens or hundreds of employees. They benefit from specific tax breaks, but they also have to pay specific business taxes

If you're starting your first business, you're generally better off filing your business as a sole proprietorship or LLC. If you file your business as an LLC, you'll be able to hire employees once you get an EIN or employer identification number.

However, hiring employees also means getting liability insurance and workers' compensation insurance. Be sure to consider these costs when going to a lender for a loan or tallying up your costs in accounting software.

Related: The Top 7 Legal Documents for Every Startup

6. Write your business plan.

A business plan is a written description of how your business will evolve from when it starts to the finish product.

As angel investor and tech-company founder Tim Berry wrote on Entrepreneur , "You can probably cover everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, management resumes and other details. If you've got a plan that's more than 40 pages long, you're probably not summarizing very well."

Here's what we suggest should be in your business plan:

  • Title page. Start with name the name of your business, which is harder than it sounds. This article can help you avoid common mistakes when picking.
  • Executive summary. This is a high-level summary of what the plan includes, often touching on the company description, the problem the business is solving, the solution and why now. (Here's what you should include in the summary and how you can make it appeal to investors .)
  • Business description. What kind of business do you want to start? What does your industry look like? What will it look like in the future?
  • Market strategies. What is your target market, and how can you best sell to that market? What potential customers will your online store try to reach? This is a key part of market analysis.
  • Competitive analysis. What are the strengths and weakness of your competitors? How will you beat them?
  • Design and development plan. What is your product or service and how will it develop? Then, create a budget for that product or service.
  • Operations and management plan. How does the business function on a daily basis?
  • Finance factors. Where is the money coming from? When? How? What sort of projections should you create and what should you take into consideration?

For each question, you can spend between one to three pages. Keep in mind, the business plan is a living, breathing document and as time goes on and your business matures, you will be updating it.

Related: How to Start a Business With (Almost) No Money

7. Finance your business.

There are a ton of different ways to get the resources you need to start your business. Angel investor Martin Zwilling , whose business Startup Professionals provides services and products for startups and small businesses, recommends 10 of the most reliable ways to fund your business . Take a look and consider your own resources, circumstances and life state to figure out which one works best for you.

  • Fund your startup yourself. Bootstrapping your business might take longer, but the good part is that you control your own destiny (and equity).
  • Pitch your needs to friends and family. It can be hard to separate business from personal relationships, but if you're considering asking for a loan, here's a resource you can use to make it as straightforward as possible.
  • Request a small-business grant. Start by checking out our guide to small-business grants . Then, head over to Grants.gov , which is a searchable, online directory of more than 1,000 federal grant programs. It might be a long process, but it doesn't cost you any equity.
  • Start a crowdfunding campaign online. Sometimes power is in numbers, and a bunch of small investments can add up to something major. If you think your business might be a fit for something like Kickstarter or Indiegogo , you should read up on 10 of the best-crowdfunded businesses ever or check out the most popular crowdfunding websites .
  • Apply to local angel investor groups. Online platforms such as Gust and AngelList and local networking can help you find potential investors who relate to your industry and passion.
  • Solicit venture capital investors. VCs typically look for big opportunities from proven teams that need a million dollars or more, so you should have some traction before approaching them.
  • Join a startup incubator or accelerator. These companies are designed to help new or startup businesses get to the next level. Most provide free resources, including office facilities and consulting, along with networking opportunities and pitch events. Some, also provide seed funding as well.
  • Negotiate an advance from a strategic partner or customer. If someone wants your product or service bad enough to pay for it, there's a chance they'll want it bad enough to fund it, too. Variations on this theme include early licensing or white-labeling agreements.
  • Trade equity or services for startup help. For example, you could support a computer system for office tenants in exchange for free office space. You might not get paid for this, but you won't have to pay for an office, either, and a penny saved is a penny earned.
  • Seek a bank loan or line of credit. Here are 10 questions you should ask before applying for a bank loan, including whether you will qualify. If you do meet the requirements, a good place to start for loan opportunities is the Small Business Administration .

Get a business bank account

It's a good idea to get a business bank account at the earliest opportunity. Even if you have a good handle on your finances, it's best practice not to pay for any business expenses with your personal checking account.

Why? Simply put, having a business bank account will make it easier for you to file taxes and track your business expenditures. That way, you always know which charges out of your account were for your business and which were for your personal life or pleasure.

Furthermore, some business bank accounts come with bonuses or special credit card offers. All of these can help you maximize your business finances, which is critically important in the earliest days of your business's lifespan.

Which business loans should you pursue?

It's also worth considering different types of business loans. SBA or US Small Business Administration loans are ideal for new entrepreneurs like yourself. However, you should only ever take out a business loan if:

  • You are confident you'll be able to pay it back on time
  • The loan doesn't come with an exorbitant or overly high interest rate
  • You fully need the loan – it's never a good business practice to take out unnecessary loans, as this can limit your business credit score

Related: 7 Seed-Stage Funding Sources That Might Finance Your Startup

8. Develop your product or service.

After all the work you've put into starting your business, it's going to feel awesome to actually see your idea come to life. But keep in mind, it takes a village to create a product. If you want to make an app and you're not an engineer, you will need to reach out to a technical person. Or if you need to mass-produce an item, you will have to team up with a manufacturer.

Here is a seven-step checklist -- including finding a manufacturer and pricing strategies -- you can use for your own product development. A major point the article highlights is that when you're actually crafting the product, you should focus on two things: simplicity and quality. Your best option isn't necessarily to make the cheapest product, even if it lowers manufacturing cost. Also, you need to make sure the product can grab someone's attention quickly.

When you are ready to do product development and outsource some of the tasks make sure you:

  • Retain control of your product and learn constantly. If you leave the development up to someone else or another firm without supervising, you might not get the thing you envisioned.
  • Implement checks and balances to reduce your risk. If you only hire one freelance engineer, there's a chance that no one will be able to check their work. If you go the freelance route, use multiple engineers so you don't have to just take someone at their word.
  • Hire specialists, not generalists. Get people who are awesome at the exact thing you want, not a jack-of-all-trades type.
  • Don't put all your eggs in one basket. Make sure you don't lose all of your progress if one freelancer leaves or if a contract falls through.
  • Manage product development to save money. Rates can vary for engineers depending on their specialties, so make sure you're not paying an overqualified engineer when you could get the same end result for a much lower price.

To help you have peace of mind, start learning as much as you can about the production, so you can improve the process and your hiring decisions as time goes along.

This process will be very different for service-focused entrepreneurs , but no less important. You have several skills that people are willing to pay you for right now, but those skills can be hard to quantify. How can you establish yourself and your abilities? You might consider creating a portfolio of your work -- create a website to show your artwork if you're an artist, writing if you're a writer or design if you're a designer.

Also, make sure you have the necessary certificates or educational requirements, so that when someone inquires about your service, you're ready to jump at a good opportunity.

Related: 105 Service Businesses to Start Today

9. Start building your team.

To scale your business, you are going to need to hand off responsibilities to other people. You need a team.

Whether you need a partner, employee or freelancer, these three tips can help you find a good fit:

  • State your goals clearly. Make sure everyone understands the vision and their role within that mission at the very start.
  • Follow hiring protocols. When starting the hiring process you need to take a lot of things into consideration, from screening people to asking the right questions and having the proper forms. Here is a more in-depth guide to help you.
  • Establish a strong company culture. What makes a great culture? What are some of the building blocks? You can see our list of 10 examples of companies with great cultures , but keep in mind that you don't need to have Google 's crazy office space to instill a positive atmosphere. That's because a great culture is more about respecting and empowering employees through multiple channels, including training and mentorship, than it is about decor or ping-pong tables. In fact, office perks can turn out to be more like traps than real benefits .

How to hire good employees

It's not enough to just hire qualified individuals. You need to hire the right employees for the job if you want your business to succeed. Fortunately, you can hire great employees by focusing on a few key aspects.

  • Hire employees based on the impression you get from them in the interview. Go-getter employees might not have the best credentials, but they'll have a can-do attitude you can rely on when the going gets tough.
  • Don't forget to consider diversity. It's a good idea to avoid hiring all of your employees from the same demographic, as any minority employees you do have could feel isolated or discriminated against. Try to diversify your hiring panel to avoid this outcome.
  • Hire employees that want to work at your company and progress up the ladder. That's the best way not only to furnish your business with good employees for your immediate needs but to set up future managers and supervisors to help you evolve and scale your business later down the road.

As for attracting these rockstar employees, offer insurance plans and other employee benefits aside from competitive pay. This will be easier as you achieve profitability and expand your business.

In the end, your employees will make or break your business and its operations. If your first batch of employees is a mix of great hires and duds, don't hesitate to fire the employees that bring everyone else down. Bad employees can negatively impact workplace culture, degrade your reputation, and even provide bad experiences for your customers. That can cause an early death spell for your company in the first days of its operation.

Related: 10 Online Careers You Can Start Today With Basically No Money

10. Find a location.

This could mean an office or a store. Your priorities will differ depending on need, but here are 10 basic things to consider :

  • Style of operation. Make sure your location is consistent with your particular style and image.
  • Demographics. Start by considering who your customers are. How important is their proximity to your location? If you're a retail store that relies on the local community, this is vital. For other business models, it might not be.
  • Foot traffic. If you need people to come into your store, make sure that store is easy to find. Remember: even the best retail areas have dead spots.
  • Accessibility and parking. Is your building accessible? Don't give customers a reason to go somewhere else because they don't know where to park.
  • Competition. Sometimes having competitors nearby is a good thing. Other times, it's not. You've done the market research, so you know which is best for your business.
  • Proximity to other businesses and services. This is more than just about foot traffic. Look at how nearby businesses can enrich the quality of your business as a workplace, too.
  • Image and history of the site. What does this address state about your business? Have other businesses failed there? Does the location reflect the image you want to project?
  • Ordinances. Depending on your business, these could help or hinder you. For example, if you're starting a daycare center, ordinances that state no one can build a liquor store nearby might add a level of safety for you. Just make sure you're not the one trying to build the liquor store.
  • The building's infrastructure. Especially if you're looking at an older building or if you're starting an online business, make sure the space can support your high-tech needs. If you're getting serious about a building, you might want to hire an engineer to check out the state of the place to get an objective evaluation.
  • Rent, utilities and other costs. Rent is the biggest facilities expense, but check out the utilities, as well, and whether they're included in the lease or not. You don't want to start out with one price and find out it's going to be more later.

Once you know what to look for and it's time to start searching for a place that fits all of your qualifications, these four tips can help.

  • Think on your own timeframe. Landlords are starting to offer shorter-term office rentals. Don't get stuck in a long-term lease if it doesn't make sense for your business.
  • Play the whole field. There are all sorts of places to use -- co-working spaces, office business centers, sublets and more. Keep your options open.
  • Click around town. You might be able to find the perfect place by using online resources.
  • Do the deal on your terms. Again, you have options. Don't get roped into something that makes you uncomfortable.

After you have a location, you can focus on the aesthetic. You can check out a few design ideas here .

Related: 5 Best Online Businesses to Start This Year (Infographic)

11. Start getting some sales.

No matter your product or industry, your business's future is going to depend on revenue and sales. Steve Jobs knew this -- it's why, when he was starting Apple, he spent day after day calling investors from his garage .

There are a ton of different sales strategies and techniques you can employ, but here are four tenets to live by:

  • Listen. "When you listen to your clients/customers, you find out what they want and need, and how to make that happen," says investor and entrepreneur John Rampton .
  • Ask for a commitment, but don't be pushy about it. You can't be too shy to ask for a next step or to close a sale, but you also can't make customers feel as though you're forcing them into a sale.
  • Don't be afraid of hearing "no." As former door-to-door salesman (and now co-founder of software business Pipedrive) Timo Rein said , "Most people are too polite. They let you make your pitch even if they have no interest in buying. And that's a problem of its own. Time is your most important resource."
  • Make it a priority. As entrepreneurial wizard Gary Vaynerchuk said , "Actually creating revenue, and running a profitable business, is a good strategy for business. Where are we that people think users or visits or time on site is the proxy to a successful business?"

But how do you actually make those sales? Start by identifying targets who want your product or service. Find early adopters of your business, grow your customer base or put out ads to find people who fit your business. Then, figure out the right sales funnel or strategy that can convert these leads into revenue.

12. Grow your business.

There are a million different ways to grow. You could acquire another business, start targeting a new market, expand your offerings and more. But, no growth plan will matter if you don't have the two key attributes that all growing companies have in common.

First, they have a plan to market themselves. They use social media effectively through organic, influencer or paid campaigns. They have an email list and know how to use it. They understand exactly who they need to target -- either online or off -- with their marketing campaigns.

Then, once they have a new customer, they understand how to retain them. You've probably heard many people state that the easiest customer to sell to is the one you already have. Your existing customers have already signed up for your email list, added their credit card information to your website and tested what you have to offer. In doing so, they're starting a relationship with you and your brand. Help them feel as good about that relationship as possible.

Start by utilizing these strategies , which include investing in your customer service and getting personal, but realize your work will never be done. You'll constantly be competing for these customers in the marketplace, and you can never simply rest on your laurels. Keep researching the market, hiring good people and making a superior product and you'll be on your way to building the empire you always dreamed about.

Check out Entrepreneur's other guides and resources for more information!

Entrepreneur Staff

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How to Write a Business Plan: Step-by-Step Guide + Examples

Determined female African-American entrepreneur scaling a mountain while wearing a large backpack. Represents the journey to starting and growing a business and needing to write a business plan to get there.

Noah Parsons

24 min. read

Updated March 18, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

  • The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

  • Raise money
  • Grow strategically
  • Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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  • What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

  • A summary of the problem you are solving
  • A description of your product or service
  • An overview of your target market
  • A brief description of your team
  • A summary of your financials
  • Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

  • Supply chain management
  • Manufacturing processes
  • Equipment and technology
  • Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

  • A description of each task
  • The proposed due date
  • Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

  • Website launch date
  • Store or office opening date
  • First significant sales
  • Break even date
  • Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

  • Conversion rates
  • Customer acquisition costs
  • Profit per customer
  • Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

  • Sole proprietor
  • Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

  • Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
  • Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
  • Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
  • Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
  • Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

  • Company logo
  • Business name
  • Value proposition (optional)
  • Business plan title
  • Completion and/or update date
  • Address and contact information
  • Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

  • Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information you need to cover in a business plan sometimes isn’t quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

If you’re looking for a free downloadable business plan template to get you started, download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

  • Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
  • Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
  • Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
  • Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
  • Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

  • Did you meet your sales goals?
  • Is spending following your budget?
  • Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

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Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

  • Write a brief executive summary
  • Describe your products and services.
  • Conduct market research and compile data into a cohesive market analysis.
  • Describe your marketing and sales strategy.
  • Outline your organizational structure and management team.
  • Develop financial projections for sales, revenue, and cash flow.
  • Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

  • 1. Not taking the planning process seriously.
  • Having unrealistic financial projections or incomplete financial information.
  • Inconsistent information or simple mistakes.
  • Failing to establish a sound business model.
  • Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

  • How will your business make money?
  • Is there a need for your product or service?
  • Who are your customers?
  • How are you different from the competition?
  • How will you reach your customers?
  • How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Table of Contents

  • Use AI to help write your plan
  • Common planning mistakes
  • Manage with your business plan
  • Templates and examples

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Refer also to the Small Business Administration's 10 Steps to start your business .

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70 Small Business Ideas for Anyone Who Wants to Run Their Own Business

Meg Prater (she/her)

Published: March 19, 2024

A good business idea may seem hard to come by, but with some planning and preparation, you can easily launch a small business to supplement your income — or become your own full-time boss.

Small business ideas symbolically showing the spirit of a small business

Maybe you already have an idea of the business you’d like to start. But while you might feel ready for a new venture and passionate about your idea, you might be looking for some direction.

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To help get you started, here's a list of small business ideas separated into a few sections:

  • What makes a good small business?

Best Small Business Ideas

Best businesses to start with little money, home business ideas.

  • Online Businesses Ideas

Easy Businesses to Start

Business ideas for students, creative small business ideas, how to start a small business at home, starting a small business: faq.

The first step to becoming a successful entrepreneur is finding a business idea that works for you. In this article, you’ll find dozens of small business ideas you can start from home and scale up as your clientele grows. Let’s get started.

What makes a good small business idea?

Not all small business ideas are made equal: Some require more effort and funding than others, while some can be launched with few resources — or resources you already have. As a potential small business owner, you’ll want to save as much money as possible on training, rent, supplies, and other necessities.

Let’s go over what makes a good business idea:

  • Requires little to no training . A good small business idea will ideally leverage your existing field of expertise and require little to no training. That will not only shorten your time-to-launch, but also lessen your expenses, since training courses can cost a significant amount of money. Plus, you’ll be more confident offering services that you feel prepared to deliver.
  • Requires low setup costs. Your business should be cheap to start. Maybe you only need to purchase a website domain or buy a desk for your garage.
  • Requires little hands-on inventory or supply management . A great business idea needs few supplies and little inventory management. If you want to sell physical goods, you can either try drop-shipping and manually make goods in small batches.
  • Is based online . The best small business ideas are based online and can be carried out from your personal computer. This will automatically lower your commuting costs and give you greater flexibility over your personal and work life.
  • Can sustainably be managed by few people . As a small business owner, you won’t have the funds to hire other people to help you run your business — at least not at first. A good business idea should give you the ability to run your business on your own.

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You're all set!

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Airbnb Co-founder, Brian Chesky, said, “If we tried to think of a good idea, we wouldn’t have been able to think of a good idea. You just have to find the solution for a problem in your own life.”

If you’re like Brian and you’ve already thought about a solution for a problem you encounter in your life — or you’re on the path to doing so — then starting a small business may be in your future. It may also be for you if you dream of clocking out of your nine-to-five job for the last time and becoming your own boss.

Below, we include the best ideas for you to start your small business — with resources and examples to help you get started.

1. Handyman

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8. Life/Career Coach

If you have experience navigating career, personal, and social transitions successfully, put it to good use as a life or career coach. Many of us are looking for guidance in our careers — and finding someone with the time to mentor us can be tough.

Life/career coaches don’t come cheap, but they are able to offer clients the intense and hands-on training and advice they need to make serious moves in their personal and professional lives. After all, everyone needs some uplifting advice from time to time.

To start your life/career coaching business with confidence, you can look for a certification program (like the Life Coach School’s or Diane Hudson’s ), then apply your skills as you acquire new clients.

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A resume writing business is economical, has few overhead costs, and has few educational requirements. We still recommend having an Associate’s or Bachelor’s degree and a few resume samples on hand. If you still feel that you need to brush up on your resume writing skills, you can take a course like Coursera’s or LinkedIn Learning’s .

Once you’ve gotten resume writing down, you can expand your business to include cover letter writing and even offer career coaching services in conjunction with these services.

10. Freelance Writer

If you have writing skills , there’s someone out there willing to pay you for them. Write blog posts, magazine articles, and website copy galore — just make sure you have a body of work built up to share with potential clients. Even if you create a few sample pieces to have on hand, they’ll help exhibit your work and attract new business.

To become a freelance writer, it’s essential to choose a specialty. For instance, you might choose to only write for publications in the healthcare industry (maybe because you were previously a healthcare worker) or focus on lifestyle publications. Whatever the case, specializing will help you find your niche market and gain confidence as a new freelancer writer.

There are no educational requirements for freelance writing, but you do need strong writing skills. It also helps to enjoy writing. While certification may be beneficial, getting practice and writing every day is more important. Try these writing prompts to start.

11. Landscaper

Mowing, tree-trimming, and seasonal decor are all neighborhood needs. If you have or can acquire the equipment, a landscaping business can be a lucrative affair. It’s also a great choice if you enjoy doing it for your own home and have a good eye for landscape design.

The good news is that you can start small. For instance, you could offer your neighbors seasonal planting services and start with a few perennial plants, or simply offer mulching services.

To grow your landscaping business, you should consider taking some formal training. The following organizations offer courses:

  • New York Botanical Gardens

After completing a course and getting enough experience, you can apply for a certificate from a landscaping organization. While a certificate isn’t necessary to work in the field, it can build your credentials and help you make industry connections to take your landscaping business to the next level. The Association of Professional Landscape Designers offers one potential certificate you could pursue.

Some states require licensure, especially if you’ll be using pesticides and fertilizers. Be sure to review the requirements for your state.

Learn some of the basics now with this video on landscape design from Lowe’s:

12. Videographer

Video production requires you to have invested in the equipment up front, which can be quite expensive. But that’s also what makes your services so valuable. Make sure you have a reel of your work to share or create a website with several selections of your work available for interested viewers.

There are no educational or licensure requirements for starting a video production business. As with writing and other creative arts, though, it pays to specialize. Real estate videos differ radically from wedding videos, and wedding videos differ radically from in-studio interviews and testimonials. By specializing, you target a highly specific customer who’ll benefit the most from your services, and you can also skill-up more effectively in one shooting style.

While you can find general classes on videography, you should consider taking a class in the type of videography you’d like to do. For instance, you could take The Complete Wedding Videography Course .

Hot tip: If you’re interested in specializing in video marketing, check out The Ultimate Guide to Video Marketing and download our starter pack below.

→ Access Now: Video Marketing Starter Pack [Free Kit]

13. Photographer

Start by conducting photo shoots for your family and friends. As you build a body of work, ask for referrals and reviews. Photography businesses often grow by word of mouth, so create a Facebook page where you can tag recent clients. Photos where you tag those clients will show up in their friends’ newsfeeds, where they can view your work. You can also ask them to leave reviews on your Facebook business page.

Like with a video production small business, you’ll want to specialize. Will you do product shoots or portraits? How about wedding or fashion photo shoots? Once you specialize, you’ll be able to create a body of work that most accurately represents your strengths.

There are no educational or licensure requirements for starting a small photography business. Still, we recommend investing in a few photography courses, especially if you haven’t used your camera in a while. Some courses you might start with include:

  • Cornell’s Digital Photography Certificate Program
  • New York Institute of Photography’s Course

From there, seek courses that help you build skills in your chosen specialty.

If you’re not sure where to start with freelance photography, take a look at Erica Clayton’s journey into the business below. Her advice? Give yourself a firm deadline to turn a profit.

14. Bed and Breakfast Owner

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4. Home Inspector

A home inspector examines a house’s drywall, electrical wiring, energy efficiency, and structural integrity to find potential issues on behalf of a home buyer. Home inspectors work in the field. They visit homes in person and provide a written inspection report. Alternatively, some home inspectors offer virtual inspections, which may be a good fit if you’d prefer to work from home.

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Some consulting industries are more competitive than others, so be sure to complete your research before starting a small consulting business. One way to find out how competitive a consulting niche is by doing keyword search . If your target niche is highly searched or is already dominated by big companies, you may have a harder time breaking in. You can use keyword research tools to uncover keyword volume and local demand.

12. Event Planner

An event planning business is an excellent choice if you have great organizational and interpersonal skills, and it’s relatively cheap to start. You might choose to specialize in a specific type of event — like weddings or company meetings — or set yourself up as an event planner of all trades.

The good news is that event planners are always in demand. It’s not an easily automated job, so this small business idea is set to thrive regardless of the digital landscape. To start, you’ll want to look for a platform that will easily allow you to advertise your availability, such as event planner directories like Eventective and WeddingWire .

If you’re highly organized, detail-oriented, and have experience planning large events, it might be time for others to benefit from your skills.

13. Personal Assistant

Personal assistants help business owners and executives take care of administrative tasks. To launch a freelance personal assistant business, you should leverage networking opportunities on LinkedIn and attend small business events at local chambers of commerce. Most local business owners might not even know they need a personal assistant until you market your services to them.

If you’re an organized, highly-detailed person, the life of a personal assistant might be for you. Don’t want to be tied to one office or person all day, every day? Consider becoming a virtual assistant, which allows you a more flexible work environment.

To become an assistant, choose a niche — will you be helping women business owners specifically? Do you have a specific field of expertise, like bookkeeping? A website can also go a long way, and be sure to print business cards for you to hand out during networking events.

14. Consignment Shop Owner

If you have an eye for style but don’t want to invest in the inventory of a brand-new boutique, consider starting a consignment shop. It will allow you to curate a collection of clothing that matches your goals and aesthetic without the overhead of a boutique selling entirely new garments.

The beauty of a small consignment business is that you can now start one online. You can sign up on a platform such as Poshmark , Depop , and even Etsy , then easily start selling your own used fashion from home.

Once you’ve defined your niche — such as vintage clothing, unique locally made art, or colorful shoes — you can begin sourcing new products from your local stores and thrift shops.

15. Caterer

If the personal chef gig is too restrictive for your schedule, consider catering instead. Pick your projects, work on fewer but larger events, and hone in on your time management skills.

Becoming a caterer is a natural step for those who are used to cooking for large events — for instance, you may have already catered your friend’s wedding or brought a 20-person meal to a potluck (that counts, too!).

It’s essential that you have enough temperature-regulated storage for the meals prior to each event, and that you arrange for reliable, temperature-controlled transportation to and from your home kitchen. Alternatively, you can lower your costs by inviting customers to pick up their order at your home.

16. Gym Owner

Kickboxing gyms, yoga studios, CrossFit, oh my! Turn your passion for fitness into a community for others by creating your own gym — start one from the ground up, become an affiliate, or open a franchise location.

Available franchise opportunities include Anytime Fitness, Orangetheory Fitness, Pure Barre, Planet Fitness, Crunch Fitness, and more. Be prepared to take out a loan to finance your franchise — most agreements start with fees upward of $20,000. But the payoff can be tremendous due to brand recognition. You’ll have no trouble recruiting new members as long as you use local marketing strategies .

Alternatively, you can create a local studio, but ideally, it should be for a specific activity instead of general fitness. Yoga, pilates, bootcamp-style gyms, and martial arts perform well as independent fitness studios.

17. Boutique Agency Owner

What’s your specialty? Whether it’s marketing, social media, or PR, it might be time to start your own agency. Many other small businesses need this type of help but don’t have the resources or volume to necessitate a full-time position.

To start an agency, you would ideally have worked in your specialty for a number of years. You should also be prepared to interface directly with clients, fulfill their requirements, and temper their expectations (if they want results in an unreasonably short amount of time).

Consider building a small team and learn from other entrepreneurs who’ve successfully started their own agencies, like Duane Brown of Take Some Risk .

18. Coffee Shop Owner

Turn your caffeine addiction into something a little more lucrative. Opening a franchise or buying an existing shop are lower-risk entry points to the coffee game, but they usually require a little more cash upfront. Starting a shop from scratch requires more planning and work — but it also maximizes your earning potential in the future.

A coffee shop is an excellent fit if you already have a full-time remote job and wish to supplement your income with a small business. You can manage the coffee shop as you work at one of the tables, but be sure to have the budget to hire an experienced barista who can pick up the slack.

If you would like to open a coffee shop and run it full-time on your own, you’ll need to undertake barista training, understand worldwide coffee sources, and have excellent customer service skills.

19. Moving Company

A truck, moving equipment, manpower, and the correct permits and insurance are the building blocks of starting your own moving company . Before you buy your first fleet of trucks, however, start small with a moving van and keep your costs low.

Still sound like too much of an initial investment? Consider offering packing services only, which have a much lower financial barrier to entry. You can partner with moving companies and offer to do their packing, or have them refer clients to you.

You could even take a niche approach to the industry as Astro International has by offering international moving services.

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2. Vending Machine Owner

Since 2015, the growth rate for vending machine businesses has increased 1.4%. Even as social distancing restrictions are still in place, this business can still be lucrative if you choose the right locations. High-traffic is key — places like hospitals, schools, and community centers are smart places to start placing your machines to generate enough revenue to cover cost and turn a profit.

3. Social Media Manager

Do you have a knack for social media? As a social media manager, you can use your skills to manage the social media accounts for companies and even individual people. Influencer marketing has become more common and many influencers rely on marketing agencies or employees to help them run their social channels.

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Online Business Ideas

If you want a business idea that you can run entirely online, check out the ones below. These ideas are ideal for those looking for a passive income stream. In other words, you shouldn’t need to do too much manual work to launch these businesses from your home or preferred business location.

1. Become an online reseller.

To become an online reseller, all you need is some business savvy and some funds to invest in product stock from manufacturers — or, of course,the willingness to sell your own used items. Generally, this is a low-touch but high-performance way of creating a passive income online business.

Online resellers usually use a platform, such as Facebook Marketplace or Amazon Sellers, to sell either their own or manufacturers’ stock. The benefit of using Facebook Marketplace is that you can begin today with your own Facebook account, and simply list items that you already own.

Interested buyers typically drive directly to your home for pick-up — but if you’re not interested in human interaction, you can leave it outside and have the buyer pay via an online platform.

planning to start a business

Blogging is one of the most accessible small businesses to start, and there are countless niches to choose from. That said, because there are many blogs online, you’ll need to learn blog SEO and keyword research to ensure your audience finds you. That way, you actually make money out of your blogging efforts.

The great news is that a small blogging business has a ridiculously low overhead. All you need is a custom domain and your time for writing blog posts.

5. Home-Baked Goods Seller

Warehouse-made, store-bought chocolate chip cookies will never compare to a batch made with love in someone’s home. Simple desserts can be easily baked and packaged to sell at local events or around your neighborhood. Use custom labels and watch the word spread about your goods!

You can begin a baked goods business easily by opening a Facebook and Instagram profile. Facebook and Instagram are both excellent platforms to market your goods, show pictures of your previous baked products, and even showcase happy clients.

Build a loyal following slowly, and save on costs by asking clients to drive to your home to pick up their order. Choosing a niche can be helpful here, or baking in a specific style that can’t be found at grocery store bakeries. The overhead can be especially low if you already have most essential baking supplies.

6. Ecommerce Store Owner

Do you create, collect, or curate anything special? Consider starting an ecommerce store and turning your hobby into a full-time job. Whether you need somewhere to sell all that pottery you’ve been making, or an excuse to search for the sports memorabilia you love tracking down, an ecommerce store can make it financially viable for you to pursue your passion.

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Starting an ecommerce store is simple and easy. You can set up a shop using an ecommerce website builder , all of which start at a minimal monthly subscription (some even start at free). Be sure to take good photos of your products and write descriptive product pages .

If you don’t have inventory, you can always own an ecommerce store by using dropshipping . Instead of creating and shipping your products yourself, you’ll instead partner with a dropshipping website and have them mail out the orders directly to your client.

7. House Cleaner

With a low barrier to entry, house cleaning can be a great way to start doing what you love — soon. Consider advertising to homes in your neighborhood and get more bang for your buck by earning a few small businesses as clients as well. They’ll usually bring in a higher paycheck for a similar amount of work.

To become a house cleaner, you should be prepared to invest in cleaning supplies and accessories, or be willing to use your own. If you plan to serve small businesses, you should buy industrial janitorial supplies so you can get work done more effectively.

Need some inspiration? This small business cleaning service grew virtually overnight on Instagram after their content went viral during the pandemic.

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Learn more about choosing the right structure for your business from the Small Business Administration.

6. Create a business bank account.

Once you have a legally formed business and have been issued an Employer Identification Number (EIN), open a bank account specifically for your business. Having a business bank account is essential for keeping your personal and business finances separate which can help you gain an accurate picture of your business’s cash flow and financial health.

Additionally, keeping your personal and business finances separate makes bookkeeping and tax preparation easier.

Many banks offer business checking and savings accounts. Business checking accounts typically do not have a limit on the number of transactions that can take place, and issue a debit card that can be used for making business purchases. However, these checking accounts do not accrue interest.

Business savings accounts typically earn interest over time but have a limited number of transactions that can occur each month. When you’re just starting out, look for a business bank account that does not have a minimum balance requirement so you are not penalized for having low funds as you work to build your business.

7. Determine if your business idea works well from home.

Ask yourself whether your business idea will work well from home. Some businesses simply aren’t suited to be based from home. If you want to run a dog boarding center but live in an apartment without a backyard, you might want to consider a dog walking business instead.

8. Set up an office.

If your business idea is well-suited for being run from home, it’s still important you have a designated workspace. While a home office might not be possible, consider setting aside a corner in your living room or putting a desk in your bedroom for a space that inspires you and creates the conditions for success.

Need a more professional space? If you conduct client-facing work requiring you to be on video calls, no one wants to see your rumpled sheets in the background. Check out local coworking spaces for memberships that earn you access to conference rooms, desk space, and more.

9. Get to work!

You’ve put in the hard work, but I’ve got bad news — it’s only going to get harder. But most entrepreneurs will agree that the payoff of being your own boss, making your own hours, and working on projects that you’re passionate about will pay dividends for the rest of your life.

What are the types of small businesses?

The types of small business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.

  • Sole Proprietorship — The simplest type of business structure is a sole proprietorship, which is also the easiest to start. As a sole proprietor, you are personally responsible for the business's liabilities and profits, and you have complete control over your business. If you are a solopreneur, you are automatically considered a sole proprietor.
  • Partnership — A partnership is a business model involving two or more individuals who agree to share the business‘s profits and liabilities. Each partner contributes to the business and shares the risks and rewards. It’s essential to have a partnership agreement that defines each partner's roles and responsibilities to ensure clarity and prevent potential misunderstandings.
  • Limited Liability Company (LLC) — An LLC, or limited liability company, is a common option for small businesses because it protects its owners by separating personal assets from the company's liabilities. To form an LLC, the business owner must file the required paperwork with the state.
  • Corporation — A corporation is an independent legal entity distinct from its owners. It provides limited liability protection to its shareholders, who are not held personally accountable for the company's debts. Corporations have formal requirements and often raise capital by issuing stocks or shares.

Which business type is best?

The best business type is a limited liability company (LLC). Operating as an LLC means that your personal assets are separate from your business assets. If your business goes bankrupt, your personal holdings won’t be affected. That said, it’s also one of the costlier types, requiring a fee paid to the state.

The easiest business type to start is a sole proprietorship. The main downside is that there’s no differentiation between you and your business.

It's crucial to seek advice from legal or accounting professionals to determine the best business structure based on your unique needs and objectives. Each structure has advantages, legal requirements, tax implications, and flexibility considerations.

How do I create a business idea?

To create a business idea, determine your skill set, work preferences, startup budget, and available resources. It’s important to strike the right balance between what you can feasibly offer and what you can feasibly afford in the short and long term.

We recommend starting with your skill set so that you can easily determine the niche in which you can effectively compete. For instance, if you have ample experience as a writer, you might consider starting a freelance writing business. But if you know you’d prefer to work with clients face-to-face, you might choose to start a ghostwriting business instead. That’s why it’s so important to take your work preferences into account, as well.

After that, take a look at your budget and determine the type of business you can start based on the resources at your disposal. For instance, you might not be able to afford a physical office or location, so a location-based business will likely not be a good fit. In that case, starting an online business is your best option.

What resources or tools can I use to refine and validate my business ideas during the brainstorming process?

Online market research tools like Google Trends, Keyword Planner, and SEMrush can provide insights into market demand, competition, and keyword trends related to your business niche. Industry reports and market analyses from reputable sources such as IBISWorld, Gartner, Statista, and industry-specific publications can offer valuable data and trends to inform your decision-making. Ensure you know the industry risk before embarking on your small business venture.

→ Download Now: Market Research Kit [Free Download]

Additionally, joining entrepreneurial communities, forums, and social media groups can provide opportunities to seek feedback, network with like-minded people, and gain insights from experienced entrepreneurs. Finally, consider conducting surveys or interviews with potential customers to gather feedback and validate your business concept before investing significant time and resources.

What are some of the most successful small businesses?

Every small business has the potential to be successful and profitable, provided it’s backed by a strong product-market fit and a robust business plan . These two elements are essential. Maybe postnatal services are one of the most successful small businesses to launch, but if you live in an area with declining population or a large elderly population, then that small business idea won’t yield a high return on investment.

Think carefully about the market where you’re launching your business, and you’ll be more than likely to see lasting success.

What are the top growing small businesses?

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  • What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Julia Martins contributor headshot

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

[inline illustration] Strategic plan elements (infographic)

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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April 1, 2024 , Filed Under: Uncategorized

What to Know Before Starting Your Business

Embarking on the journey of starting your own business can be exhilarating, daunting, and outright transformative. It’s a path paved with challenges, learning, and opportunities. Whether you’re driven by a passion for innovation or the dream of being your own boss, understanding the landscape ahead can make the difference between a fleeting attempt and a thriving enterprise. This article sheds light on key considerations and strategies for aspiring entrepreneurs, aiming to equip you with the knowledge to navigate the complex yet rewarding world of business.

Identifying Your Niche

Finding your niche is a critical first step in the business world. It’s not just about what you want to sell or offer; it’s about identifying a gap in the market that your business can fill. A well-defined niche helps in creating a focused marketing strategy and establishes a clear target audience. Consider conducting market research and competitor analysis to ensure your business idea has the potential to stand out.

Creating a Solid Business Plan

A robust business plan is your roadmap to success. It outlines your business goals, strategies, market analysis, financial forecasts, and potential challenges. It’s a living document that not only guides your startup phase but also assists in managing your business. A comprehensive plan attracts investors and serves as a tool for evaluating decisions and tracking progress.

In the quest for further resources and guidance on entrepreneurship, exploring various platforms for insights can be immensely beneficial. For those interested in gaining a deeper understanding of the nuances, online resources on how to run a business can provide valuable perspectives and advice from seasoned professionals. This can complement your existing knowledge and aid in refining your business strategies.

Building a Strong Brand

Your brand is the identity of your business; it’s what sets you apart in the market. A strong brand resonates with your target audience and creates loyalty. It encompasses your business name, logo, values, and communication strategy. Investing in your brand’s development and consistently presenting it across all platforms can significantly impact your business’s growth and perception.

Understanding Legal Requirements

Navigating the legal landscape is crucial for any startup. This includes choosing the right business structure , understanding tax obligations, and ensuring compliance with local, state, and federal regulations. Failing to address these aspects can lead to significant legal hurdles down the line. Consider consulting with a legal expert to get your business off to a proper legal start.

Maintaining Work-Life Balance

Starting and running a business requires dedication and hard work, but it’s crucial to maintain a healthy work-life balance. Burnout can hinder your progress and affect your decision-making. Setting boundaries, taking breaks, and pursuing hobbies or interests outside your business can enhance your overall productivity and well-being.

Financial Management

Effective financial management is the backbone of any successful business. It involves setting up a budget, managing cash flow , and determining funding sources. Whether it’s through personal savings, loans, or investors, securing enough capital is essential. Understanding your financial landscape also means planning for taxes and setting aside resources for unexpected expenses.

Expanding Your Network

Building a strong professional network is invaluable for any entrepreneur. Networking can open doors to new opportunities, partnerships, advice, and support. Attend industry events, join relevant online communities, and engage with other entrepreneurs through social media platforms. A robust network not only aids in the growth of your business but also enriches your entrepreneurial journey with diverse perspectives and relationships.

Embracing Digital Marketing

In today’s digital age, having a strong online presence is non-negotiable. Digital marketing strategies such as SEO , content marketing, social media advertising, and email marketing can drive traffic, generate leads, and boost sales. Utilizing these tools effectively involves understanding your audience, creating quality content, and constantly analyzing and adjusting your strategies based on performance metrics.

Staying Adaptable and Open to Learning

The business landscape is ever-changing, and adaptability is key to stay ahead. Be open to experimenting with new strategies, technologies, and business models. Continuous learning and being receptive to feedback can lead to innovative solutions and business improvement. Regularly review your business plan and strategies to ensure they align with current market trends and business needs.

Emphasizing Customer Satisfaction

Ultimately, the success of your business depends on the satisfaction of your customers. Delivering quality products or services, exceptional customer service, and valuing customer feedback are fundamental. Implement mechanisms to gather customer insights and respond to them constructively. Satisfied customers are likely to become repeat buyers and can become powerful advocates for your brand in a competitive market.

Launching a business is a venture filled with highs and lows, but proper preparation and awareness can set the foundation for a successful and fulfilling journey. It’s not just about having a great idea but also about strategically bringing that idea to life. By focusing on finding your niche, creating a detailed business plan, understanding legal requirements, managing finances wisely, building a strong brand, leveraging digital marketing, maintaining work-life balance, expanding your network, staying adaptable, and emphasizing customer satisfaction, you are laying the groundwork for a business that can withstand challenges and thrive in a competitive landscape.

The real voyage of discovery consists not in seeking new landscapes, but in having new eyes —  Marcel Proust

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A Beginner’s Guide to Starting a Business in Oregon

Starting a business in Oregon allows you to pursue your passions, create wealth, and address local problems. Oregon’s strategic location next to bustling economies like Washington and California makes it a destination for emerging enterprises.

Agriculture, tourism, and technology contribute to the state’s diverse economic landscape. The skilled workforce in cities like Beaverton offers fertile ground for budding ventures.

Unsurprisingly, Oregon produces 99% of the U.S. hazelnut, a commercial crop that contributes to the state’s GDP of $299.1 trillion.

Ranked as the 17th wealthiest state in the U.S., its current unemployment rate of 4.1% is lower than the long-term average of 6.8%, suggesting a thriving business environment that presents opportunities beyond traditional sectors.

Here’s how you can leverage this booming economic landscape to start your business in Oregon.

1.  Create a Business Plan

Running a successful business can be fraught with many challenges and complex processes.

You need a well-structured business plan when starting a small business in Oregon. It can address these challenges by preparing you and providing a ground plan to guide your business.

A business plan should include sections on its concept, market analysis, operational plan, and financial projections. Moreover, it should outline your business’s objectives and long-term goals.

It should also:

  • Have an executive summary
  • Include a business/company description
  • State what portfolio of services or products you will offer
  • Define your target market
  • Map out customer demographics
  • Have details on operational costs
  • List funding sources
  • Carry analysis of market size in Beaverton
  • Identify main competitors and their market share

2.  Choose a Business Name

Choosing the right name is an important part of how to start a business. It conveys your brand identity and significantly influences how potential customers perceive or receive your business.

Your business name should be unique and adequately represent the kind of service or products you offer.

Before you settle on a business name, conduct a simple business name search on the Oregon Secretary of State website to make sure the name you choose is available to register as a business entity in Oregon.

Other considerations for your business name choice include:

●     Clarity

The business name should be easy to pronounce and remember. It should also translate well into the online world, making it easier to choose a domain name.

●     Representation of your brand

Avoid ambiguous names. Your name choice should reflect the products or services you offer. For instance, a name with the word ‘Nutri’ in it will be inappropriate for a home decor product.

●     Expansion

While your business name should be suitable for your current business offering, it should not be rigidly specific to exclude future expansion into other industries.

●     Legal Considerations

Beyond Beaverton and the state of Oregon, your name choice may already exist. Conduct a general search to avoid future lawsuits from trademarks with similar names that you may be infringing on their rights.

If a name is available but you are not ready to register with the state, you can file a “company name reservation” application in Oregon. The application takes between 1-2 weeks to process and reserves the name for 120 days.

3.  Choose a Legal Structure

Choosing the right legal structure for your business is important as they carry different benefits and can influence various aspects of its operations.

These legal structures are of different types and can determine the flexibility of the management and even tax implications.

●     Sole proprietorships

Sole proprietorships do not confer limited liability to the owner of the business. You bear unlimited liability for any debt or legal issues that may arise and report profits and losses on your tax returns.

●     Partnerships

Partnerships facilitate shared ownership and management and are particularly valuable when two entities collaborate.

Particularly, this structure spreads liability and is a prevalent structure in Oregon, where the involvement of moving companies, Beaverton is crucial for easy movement of assets.

Here, profits and losses directly impact the owners, who report them on their tax returns.

●     Limited Liability Companies (LLCs)

Limited liability companies (LLCs) provide personal protection for their owners, known as members.

Registering your business as a legal entity offers protection from being liable for lawsuits against your business (limited liability protection). They have flexible taxability either as sole proprietors or as corporations.

●     Corporations

Corporations have a more complex structure and robust liability. Taxing is separate from their owners. Although Oregon does not have a state sales tax, corporations face corporate income tax on profits while shareholders pay taxes on dividends.

4.  Registering Your Business

After choosing your legal structure, the next step is to register your business. It establishes its recognition as a legal entity.

The Oregon Secretary of State handles all registration processes, and you can choose to file a registration online, in person, or by mail.

Moreover, the address and contact of the registering agent must be in Oregon. Sole proprietorship businesses also do not need to register unless they are using an assumed business name.

Depending on your chosen legal structure, you may need to file articles of incorporation. Other documents the Oregon business registry requires may include articles of dissolution, entity mergers, and other similar registration documents.

5.  Meeting Licensing Requirements and Obtaining Permits

Oregon does not have a general business license. Obtaining one depends on your business activity and location. For instance, in Beaverton, every business within the city pays a business license fee unless exempted by state or federal statutes.

The business license fee expires on December 31st, with some modifications for businesses that obtain their license after June 30th. You can apply for the business license online or mail it with the filled-out form and payment check.

Businesses such as insurance, utility, and real estate are not required to obtain a license in Beaverton. These licenses are not transferable when you sell the business, and they do not permit it to operate outside the dictates of federal, state, regional, and local laws.

6.  Explore Funding Options

The financial costs needed for your business to be operational, including fees for your small business legal requirements, can be high.

In addition to the cost of equipment, marketing, and ongoing expenses, you may need to explore various funding options. It helps to have a financial plan that demonstrates your business’s viability and helps attract investors or lenders.

  • Angel Investors provide seed capital in exchange for equity in your business.
  • Business loans offer funds with agreed-upon repayment terms and interest rates from financial institutions.
  • Personal savings involve using one’s own money (bootstrapping) saved over time to finance a business venture. It allows you full control and ownership over funds and business.
  • Oregon Small Business Development Centers (SBDC) provide tailored guidance on how to secure funding when you are starting a business in the state. These centers have access to lenders looking for qualified businesses.

7.  Open a Dedicated Business Bank Account

Separating your personal finances from your business proceeds is essential in maintaining your liability protection.

Opening a business account can help you achieve this. It requires you to file for an Employer Identification Number (EIN), a 9-digit number issued by the IRS. The EIN is what identifies your business for taxes.

Bottom Line—Becoming A Founder

The processes involved can seem overwhelming when you are new to starting a business in Oregon.

But if done properly, it can be a rewarding endeavor. By following these guides, you can avoid some pitfalls that many small businesses fall into and be well on your way to business success.

Also, an extra tip for you would be this: do not hesitate to seek professional guidance as needed.

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New York Takes Crucial Step Toward Making Congestion Pricing a Reality

The board of the Metropolitan Transportation Authority voted to approve a new $15 toll to drive into Manhattan. The plan still faces challenges from six lawsuits before it can begin in June.

Multiple cars are stopped at a traffic light at a Manhattan intersection. A person responsible for controlling traffic stands nearby wearing a yellow reflective vest.

By Winnie Hu and Ana Ley

New York City completed a crucial final step on Wednesday in a decades-long effort to become the first American city to roll out a comprehensive congestion pricing program, one that aims to push motorists out of their cars and onto mass transit by charging new tolls to drive into Midtown and Lower Manhattan.

The program could start as early as mid-June after the board of the Metropolitan Transportation Authority, the state agency that will install and manage the program, voted 11-to-1 to approve the final tolling rates, which will charge most passenger cars $15 a day to enter at 60th Street and below in Manhattan. The program is expected to reduce traffic and raise $1 billion annually for public transit improvements.

It was a historic moment for New York’s leaders and transportation advocates after decades of failed attempts to advance congestion pricing even as other gridlocked cities around the world, including London, Stockholm and Singapore, proved that similar programs could reduce traffic and pollution.

While other American cities have introduced related concepts by establishing toll roads or closing streets to traffic, the plan in New York is unmatched in ambition and scale.

Congestion pricing is expected to reduce the number of vehicles that enter Lower Manhattan by about 17 percent, according to a November study by an advisory committee reporting to the M.T.A. The report also said that the total number of miles driven in 28 counties across the region would be reduced.

“This was the right thing to do,” Janno Lieber, the authority’s chairman and chief executive, said after the vote. “New York has more traffic than any place in the United States, and now we’re doing something about it.”

Congestion pricing has long been a hard sell in New York, where many people commute by car from the boroughs outside of Manhattan and the suburbs, in part because some of them do not have access to public transit.

New York State legislators finally approved congestion pricing in 2019 after Gov. Andrew M. Cuomo helped push it through. A series of recent breakdowns in the city’s subway system had underscored the need for billions of dollars to update its aging infrastructure.

It has taken another five years to reach the starting line. Before the tolling program can begin, it must be reviewed by the Federal Highway Administration, which is expected to approve it.

Congestion pricing also faces legal challenges from six lawsuits that have been brought by elected officials and residents from across the New York region. Opponents have increasingly mobilized against the program in recent months, citing the cost of the tolls and the potential environmental effects from shifting traffic and pollution to other areas as drivers avoid the tolls.

A court hearing is scheduled for April 3 and 4 on a lawsuit brought by the State of New Jersey, which is seen as the most serious legal challenge. The mayor of Fort Lee, N.J., Mark J. Sokolich, has filed a related lawsuit.

Four more lawsuits have been brought in New York: by Ed Day, the Rockland County executive; by Vito Fossella, the Staten Island borough president, and the United Federation of Teachers; and by two separate groups of city residents.

Amid the litigation, M.T.A. officials have suspended some capital construction projects that were to be paid for by the program, and they said at a committee meeting on Monday that crucial work to modernize subway signals on the A and C lines had been delayed.

Nearly all the toll readers have been installed, and will automatically charge drivers for entering the designated congestion zone at 60th Street or below. There is no toll for leaving the zone or driving around in it. Through traffic on Franklin D. Roosevelt Drive and the West Side Highway will not be tolled.

Under the final tolling structure, which was based on recommendations by the advisory panel, most passenger vehicles will be charged $15 a day from 5 a.m. to 9 p.m. on weekdays, and from 9 a.m. to 9 p.m. on weekends. The toll will be $24 for small trucks and charter buses, and will rise to $36 for large trucks and tour buses. It will be $7.50 for motorcycles.

Those tolls will be discounted by 75 percent at night, dropping the cost for a passenger vehicle to $3.75.

Fares will go up by $1.25 for taxis and black car services, and by $2.50 for Uber and Lyft. Passengers will be responsible for paying the new fees, and they will be added to every ride that begins, ends or occurs within the congestion zone. There will be no nighttime discounts. (The new fees come on top of an existing congestion surcharge that was imposed on for-hire vehicles in 2019.)

The tolls will mostly be collected using the E-ZPass system. Electronic detection points have been placed at entrances and exits to the tolling zone. Drivers who do not use an E-ZPass will pay significantly higher fees — for instance, $22.50 instead of $15 during peak hours for passenger vehicles.

Emergency vehicles like fire trucks, ambulances and police cars, as well as vehicles carrying people with disabilities, were exempted from the new tolls under the state’s congestion pricing legislation .

As for discounts, low-income drivers who make less than $50,000 annually can apply to receive half off the daytime toll after their first 10 trips in a calendar month. In addition, low-income residents of the congestion zone who make less than $60,000 a year can apply for a state tax credit.

All drivers entering the zone directly from four tolled tunnels — the Lincoln, Holland, Hugh L. Carey and Queens-Midtown — will receive a “crossing credit” that will be applied against the daytime toll. The credit will be $5 round-trip for passenger vehicles, $12 for small trucks and intercity and charter buses, $20 for large trucks and tour buses, and $2.50 for motorcycles. No credits will be offered at night.

Grace Ashford contributed reporting.

Winnie Hu is a Times reporter covering the people and neighborhoods of New York City. More about Winnie Hu

Ana Ley is a Times reporter covering New York City’s mass transit system and the millions of passengers who use it. More about Ana Ley

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More From Forbes

How To Start Writing A Business Plan That Works

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For the entrepreneur, knowing how to start writing a business plan can be as exhilarating as it is overwhelming. The business plan is a foundational document and the blueprint of your business and is critical for securing funding, setting clear goals, and communicating your vision to the world.

Let’s explore the significance of a business plan, the essential elements it should include, and strategies to forge a plan that resonates with stakeholders and steers your business toward success.

Whether you are about to launch your first business or need to revitalize an existing business strategy, a business plan provides the foundation that supports your entrepreneurial journey.

Why a Business Plan Is Needed

A business plan is not solely for the benefit of a bank manager or an investor . The business plan is a document that helps bring clarity to your vision and can guide every decision and strategy within your company.

A well written business plan forces you to put your goals and ideas into concrete, manageable steps. It cuts through the noise, ensuring you stay focused on what truly matters for your business’s growth.

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For startups looking to secure that critical initial investment, a business plan is often the first point of reference for potential backers. It’s a chance to sell your vision, show your financial acumen, and demonstrate a roadmap to profit.

Identifying potential pitfalls early is a vital aspect of proactive business ownership. A good business plan helps you prepare for the unexpected and develop strategies to mitigate risk and safeguard the longevity of your business.

Setting clear, measurable goals in your business plan provides a framework for tracking your progress. This will give you the insight needed to pivot or double down on strategies as the market dictates.

Creating Your Story

Before you start drafting sections and compiling data, step back and consider the story of your business. Your plan should be like a good book, with a clear narrative arc that compels the reader from the first sentence to the last.

Any good story is rooted in an understanding of the world it inhabits. Your business's narrative begins with a comprehensive analysis of the industry in which you operate, as well as the consumers you aim to serve.

Think about how you define your unique selling proposition (USP) . What sets your business apart from competitors? All good stories have a unique twist, and your business plan should articulate what makes your venture different from, and better than, the competition.

Introduce your team into the story. Highlight their expertise, experience, and any relevant achievements that lend credibility to the business’s ability to execute on its vision.

Writing Your Business Plan Is Just the Beginning

A business plan can span from a quick roadmap sketched on the back of a napkin to a hefty document carefully crafted to align with industry standards. Regardless of size, it should contain certain fundamental elements .

The act of writing a business plan, while pivotal, is just the first step in an ongoing process of refinement and execution.

Here’s how to make sure your business plan is a living document:

1. Regular reviews and updates

Markets shift, consumer behavior changes, and your business will grow. Your plan must evolve with these factors, which makes regular reviews and updates a must-do.

2. Be realistic

It’s essential to be both ambitious and realistic in your plan. Don’t over-inflate projections or underestimate costs. An unrealistic plan is as unattractive to investors as a lack of vision and ambition.

3. Seek professional input

Don’t be afraid to ask for help. Experienced business advisors, accountants, and mentors can provide invaluable feedback and spot issues you may have missed.

4. Start small

Your first draft doesn’t have to be perfect. Write down your initial thoughts, outline your ideas, and refine them over time. Starting with a large plan can be intimidating but working on it gradually can be a more manageable and effective approach.

The bottom line is that writing a business plan can feel overwhelming, but with the right approach and attention to detail, you can create a document that not only articulates your vision but actively works to make that vision a reality. It’s a living, breathing narrative that outlines your business’s course of action, and should be treated with care and enthusiasm.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business . She is the founder of She Means Profit, which is a podcast and blog . As a Finance Strategist for small business owners, Melissa helps successful business owners increase their profit margins so that they keep more money in their pocket and increase their net worth.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

Melissa Houston

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I was nervous and lonely after I got put on a PIP at work. But I survived and think it helped me grow.

  • A woman who works in digital marketing was put on a performance-improvement plan in a new job.
  • As a result of an ADHD diagnosis and treatment, she was able to improve her performance, she said.
  • She survived her PIP and has tried to help new hires so they don't feel as isolated as she did.

Insider Today

This as-told-to essay is based on a conversation with a woman based in the US who works in digital marketing. She was put on a performance-improvement plan several months into a new job. She'd been fired from a prior role and didn't expect to survive the PIP. However, diagnosis and treatment for attention-deficit/hyperactivity disorder helped improve her focus. She asked that Business Insider withhold her identity because she didn't want her story to reflect poorly on her employer's training process. The following has been edited for brevity and clarity.

I work in digital marketing. When I was placed on a PIP, I had a lot of people tell me to start looking for another job. Some said not to even fight the PIP because my bosses already had it in their minds to fire me. Even recruiters and my friends who work in HR said that.

But my circumstances were a little different. Most of the bosses are pretty young. They're my age — early 30s — and I think they really did have the intention of sharpening me up a bit. They did exactly what the performance improvement plan is supposed to be for, which is to get team members up to the standards they expect.

The problem I had was that my boss hired me and then went on maternity leave. Once I started, there was a period of several months when she was gone, and I felt like I was just left out in the woods. I was relying on my teammates to train me — people who didn't have experience doing that. When my boss got back, she seemed frustrated that the two new hires — myself and someone else — weren't up to par.

I did feel it was unfair to be placed on a PIP because of that, but I'd had a history of losing jobs. I had always had a lot of focus issues. However, during the PIP, I was diagnosed with ADHD, which I think explains why I sometimes struggled at work.

I survived my PIP, but a coworker didn't

Two of us were placed on a PIP at the same time — the two new people. Everyone else on the team had been there for four or five years. They ended up firing the other new team member. When they fired him, I thought I was also on the chopping block, though eventually, my coworkers told me he just wasn't meeting the expectations of the PIP.

The PIP meeting was the first time my employer formally stated expectations and standards. How can you meet expectations if you don't know what they are? I heard things like, "You need to reply to clients within 24 hours. Send meeting notes 30 minutes prior to a call." No one had ever said any of that.

I've heard that the more realistic the objectives, the more you can pass a PIP. Ours are pretty well-defined and pretty realistic. It was things like being online by 8 a.m. and having your camera on for meetings. These things hadn't been stated but were easy to achieve.

A lot of my job is meeting with clients. When my boss returned from maternity leave, she was on all of my calls supervising. Afterward, she would send me notes with, "Here's what I would have said." That was the first time that I ever had any real feedback. Before she came back, my other workers were supervising. Everyone would just say, "Oh, good job on the call."

Related stories

Both my managers are very busy. Before my PIP, I felt like I had to ask my coworkers questions on calls. I didn't want to send a message through Teams because I didn't want any trace of it. I didn't want it to seem like I didn't know anything. I didn't know what they expected me to know.

After my PIP, we eventually got two new hires. I told my boss, "Here's what went wrong. Here's what the new hires need to know so they are not placed on a PIP." There was a lot of company knowledge that I didn't glean when she was gone. I felt like I didn't have anyone to turn to because I didn't want to keep bugging my coworkers. We work remotely, and I think that in an office setting, I would have had more opportunities to ask questions. I feel like I was thrown to the wolves in some regard.

I just made sure the new hires knew that they could ask me anything at any time. I felt very alone during my PIP, and I don't want others to experience that feeling. I am a first-generation college graduate. I was the first generation to work in a corporate role. So I have nobody to go to when something like this happens.

ADHD medication is helping me focus

The ADHD medication is helping a lot. It's helping with my focus. Once I was diagnosed and started learning more about ADHD, I felt like I understood my whole life. I remember being a teenager, and I was a straight-A student. I had wanted to be a doctor, but I told myself, "I can't handle that." I didn't know that I had this attention-deficit disorder. The diagnosis and medication have really changed the game for me.

When I was put on the PIP, I was in crisis mode. I was considering switching to a different career. I was thinking of becoming an EMT. Random stuff. But I thought, let me knuckle down in this job first and give it 110%. At the time, I didn't have an ADHD diagnosis.

I never felt confident during the PIP that I was going to survive it. I would get messages from my bosses like, "Good work. You're coming up to speed on things." Everything that they said during it was positive, but because of what I'd heard about PIPs, I expected to get fired.

Then, after my diagnosis, I was taking my medication every day and working around the clock. I was very vocal and transparent with both of my bosses about what I was doing because we had weekly check-ins for the PIP.

But it was hard to know what to disclose. On one call, I was very hesitant to mention it, but I said, "I was recently diagnosed with ADHD, and I know that it's affecting my performance. I apologize if there were any gaps." I told them I was on medication that's really helping. They said, "Thank you so much for telling us. We're really glad that you opened up to us about that. We wish you would have said something sooner because we could make accommodations." It ended up being a positive for me to say that, but I was taking a gamble because it can also be used against you.

It's not the warmest office. It's not the most transparent management. I didn't feel like I had a rapport with one of my bosses until I met her in person. Then she ended up apologizing for the PIP and saying that after she had her baby, she had postpartum depression and was kind of going through a lot and needed the team to be at 100% because it would help her out, too.

I didn't have the final PIP meeting. They just sent an email saying that I passed and that we wouldn't have the check-ins and everything was fine. And they copied HR. I felt very relieved. But I still felt weary and like I needed to tread lightly. You still have to continue the standard that they set.

The PIP process, on the whole, was positive — having so much transparency for the first time. Now I know I can go to my bosses and say, "Hey, I'm not able to get a refill of my medication because of a shortage. I'm sorry if you need to remind me about anything. Just feel free to be harder on me during this."

Overall, I feel more job security now. They're even putting me on new accounts. Do you have something to share about a PIP or what you're seeing in your workplace? Business Insider would like to hear from you. Email our workplace team from a nonwork device at [email protected]  with your story or to ask for one of our reporter's Signal numbers. Or check out   Business Insider's source guide  for tips on sharing information securely.

Watch: Jill Kramer, CMO of Accenture, says disability inclusion should be baked into creative briefs

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California fast-food workers will get $20 minimum wage, starting Monday

Vanessa Romo

Vanessa Romo

Alina Selyukh 2016

Alina Selyukh

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A McDonald's worker hands food to a customer at a drive-thru window in Los Angeles, on Sept. 28. Damian Dovarganes/AP hide caption

A McDonald's worker hands food to a customer at a drive-thru window in Los Angeles, on Sept. 28.

California fast-food workers cooking Big Macs or whipping Frappuccinos will start making a minimum wage of $20 an hour on Monday. For many, this means a 25% raise.

The new state minimum uniquely focuses on a particular segment, fast food, affecting some of the country's biggest chains, including McDonald's, Starbucks, Subway and Pizza Hut.

It's a big win for cooks, cashiers and other fast-food workers – some of the lowest-paid jobs in the U.S. – whose wages have been growing at a faster clip since the pandemic, after decades of stagnation.

California is one of the country's most expensive states; about half a million people are estimated to work in fast food here, mostly women, immigrants and people of color. Many live below the poverty line.

Uber and Lyft threaten to halt operations in Minneapolis over minimum wage law

Uber and Lyft threaten to halt operations in Minneapolis over minimum wage law

Sandra Jauregui from Sacramento is counting down the days to her first bigger paycheck in two weeks. After 18 years working at several Jack in the Box franchises, her pay will jump from $17.50 to $20. That means she could be bringing home another $120 each paycheck.

"It's super great," says Jauregui, 52, speaking in Spanish. "At the very least it'll give me some breathing room ... and make it easier to pay the rent and other bills."

Chipotle, McDonald's warn of price hikes, less work

But the dramatic pay raise has also touched off a heated debate about the impact on local businesses. Smaller franchise restaurant owners warn they'll have to raise prices, reduce worker's hours, cut jobs or even close shop.

California's pay hike is a result of a contentious deal struck by labor leaders, including the large Service Employees International Union, and fast-food companies last year. The new wage law applies to fast-food chains with at least 60 locations nationwide, with exemptions for some bakeries and smaller fast-food outposts inside grocery stores, airports and other venues.

Several fast-food executives have suggested prices would go up 2.5% to 3.5% to offset higher wages; Jack in the Box, Starbucks, McDonald's and Chipotle have all warned of upcoming price hikes. That's on top of price increases many restaurants have been rolling out for months. The cost of eating out has stubbornly inched higher even as inflation has cooled elsewhere .

Other chains plan to speed up their use of automation, including kiosks and robots. A major Pizza Hut franchisee cited the wage hike as the reason for layoffs of more than 1,000 delivery drivers this year, in a switch to apps like Uber Eats and DoorDash that pushes more delivery fees onto shoppers.

planning to start a business

One big Pizza Hut franchisee in California cited the upcoming wage hike as a reason for laying off more than 1,000 delivery drivers in a shift to delivery apps like Uber Eats and DoorDash. Justin Sullivan/Getty Images hide caption

One big Pizza Hut franchisee in California cited the upcoming wage hike as a reason for laying off more than 1,000 delivery drivers in a shift to delivery apps like Uber Eats and DoorDash.

Franchisees weigh cuts to workers' hours

Many restaurant owners expect workers to be working fewer hours. That was the main side-effect a decade ago, when Seattle hiked its minimum wage to $15, research suggests .

"I am used to being a champion of labor and I'm in this odd position," says Michaela Mendelsohn, a longtime advocate for LGBT workers and also owner of six El Pollo Loco restaurants with about 170 employees.

Her restaurants lost shoppers after a pre-emptive price increase in February, she says. Now, the focus is on cutting costs by simplifying operations, changing how long it takes workers to make sauces, for example, or to close up for the night.

Minimum-wage workers in 22 states will be getting raises on Jan. 1

Minimum-wage workers in 22 states will be getting raises on Jan. 1

"We're having to get more efficient," Mendelsohn says. "So really what's left is ... to reduce labor hours. And I hate saying that."

In recent years, the battle for higher minimum wages has increasingly played out at the city, county and state levels as the federal minimum wallows at $7.25 an hour .

Broadly, California often sets the bar for many business decisions that other states later follow. Advocates hope something similar will happen with fast-food pay – spreading to other industries in the state and across the country.

California's minimum previously rose to $16 an hour on Jan. 1.

Workers are thrilled, but also anxious

Employers' warnings have left many workers with mixed feelings about the raise, despite the potential for extra spending power.

The Jack in the Box worker Jauregui, 52, has been cobbling together two salaries, working about 54 hours a week between the restaurant and a laundromat.

She says she's always trying to save a bit to treat her grandchildren – she has custody of three of them – who are constantly growing out of clothes and shoes. And although she marched alongside fellow SEIU members to win the wage increase, she is fearful of the downside.

These millionaires want to tax the rich, and they're lobbying working-class voters

These millionaires want to tax the rich, and they're lobbying working-class voters

"My boss told me that he won't reduce my hours but that he will cut others' hours," Jauregui said.

All this makes California's wage hike a high-profile case study for how exactly a higher minimum wage reverberates through the local economy.

"This policy is going to be really different in different parts of California," says Jacob Vigdor, professor of public policy and governance at the University of Washington, who has studied the effects of Seattle's 2014 minimum wage hike.

The research found that after the minimum wage rose from $9.47 to $13 – in the early years of the Fight For $15 labor campaign – workers generally didn't lose jobs even though they did lose hours. And they ended up with higher pay.

"The restaurant business is a really tough business," Vigdor says. "Restaurants open and close all the time, even in places where the minimum wage hasn't changed for more than a decade. ... Generally speaking, we found that in the restaurant industry, businesses were able to find ways to adapt to higher wage costs."

KQED's Farida Jhabvala Romero contributed to this report.

  • fast food workers
  • minimum wage

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  5. How to Make a Business Plan,Perfect Startup Guide

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  6. How to Write a Business Plan for a Startup?

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  1. How to Start a Business Without Quitting Your Job

  2. #001 Stop planning, Start hearing

  3. Annual Planning Hack: start in the past. #businessplan

  4. This is HOW TO Start a Business while Working a 9-5

  5. 12.06.2023

  6. 📚 Entrepreneur's Business Plan guide🏅

COMMENTS

  1. How To Start A Business In 11 Steps (2024 Guide)

    The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may ...

  2. 12 Steps to Start a Thriving Business in 2024

    7. Write your business plan. You need a business plan before starting a business. This isn't about checking a box but improving your understanding of what it takes to run a successful business. 8. Make your business legal. Before setting up shop, you must check all the necessary legal boxes.

  3. Starting a Small Business: Your Complete How-to Guide

    The Bottom Line. Knowing how to start a small business involves the key steps of market research, setting up a business plan, understanding the legal requirements, exploring funding options ...

  4. How to Start a Business: A Startup Guide for Entrepreneurs [Template]

    7. Create a brand identity. Once you have the first six steps squared away, you can focus on developing a unique brand identity for your business. Key components include your brand personality and experience, as well as visual elements like your logo, color palette, typography, imagery, graphic elements, and more.

  5. How to Start a Business: A Comprehensive Guide and Essential Steps

    Fact checked by. Vikki Velasquez. Starting a business in the United States involves a number of different steps, spanning legal considerations, market research, creating a business plan, securing ...

  6. The Step-by-Step Startup Guide: How to Start a Business

    Registering with the state. Some states allow you to register your business online, while others require you to fill out and mail or physically hand in paperwork. You should register through the Secretary of State's office, a business bureau or a business agency. 7. Get an employer identification number from the IRS.

  7. How to Start a Business: A Step-by-Step Guide

    9. Brand yourself and advertise. Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your literal or ...

  8. How to start and fund your own business

    The SBA can help you learn how to start your own business with 10 Steps to Start a Business. The SBA's Business Guide covers other important aspects of running a business. These include: Paying business taxes. Getting business insurance. Applying for licenses and permits.

  9. Business startup checklist: Launching a startup step by step

    To begin, you'll need to calculate your exact startup costs. These may include: One-time startup costs: state business registration fees, lease deposits, etc. Labor costs: your salary plus worker salaries. Overhead costs: monthly office rent, utilities, taxes, computer equipment, production costs. Spreadsheets are your friend with planning ...

  10. How to Start a Business in 15 Steps

    5 best places to advertise your business online. 13. Set up a payments system. If your business takes credit and debit cards, you'll likely need a payment processor and point-of-sale (POS) system ...

  11. Starting a Business in 12 Easy Steps

    7. Finance your business. There are a ton of different ways to get the resources you need to start your business. Angel investor Martin Zwilling, whose business Startup Professionals provides ...

  12. How to Write a Business Plan: Guide + Examples

    Download Now: Free Business Plan Template. Writing a business plan doesn't have to be complicated. In this step-by-step guide, you'll learn how to write a business plan that's detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

  13. Checklist for Starting a Business

    Refer also to the Small Business Administration's 10 Steps to start your business. Apply for an Employer Identification Number (EIN) if applicable. Select a business structure. Choose a tax year. If you have employees have them fill out Form I-9 PDF and Form W-4. Pay your business taxes. Page Last Reviewed or Updated: 05-Jul-2023.

  14. 70 Small Business Ideas for Anyone Who Wants to Run Their Own Business

    Remember, the goal is to start a business for cheap, and a certification can have a high ROI after you book your first few clients for garden design. 3. Travel Planner. The time of the travel agent might be passing, but people are still looking for those with a knack for more nontraditional travel coordination.

  15. Strategic Planning: 5 Planning Steps, Process Guide [2024] • Asana

    Step 1: Assess your current business strategy and business environment. Before you can define where you're going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

  16. Planning To Start

    How Planning To Start Works. 1. Answer some questions about your business idea It should take around 10 minutes. 2. Access an instant start-up toolkit Filled with resources, advice, events & support specific to you. 3. Connect with your local office Your local office will be in touch to discuss your next steps. 4.

  17. What to Know Before Starting Your Business

    A robust business plan is your roadmap to success. It outlines your business goals, strategies, market analysis, financial forecasts, and potential challenges. It's a living document that not only guides your startup phase but also assists in managing your business. A comprehensive plan attracts investors and serves as a tool for evaluating ...

  18. How To Start A Small Business At Home (2024 Guide)

    Open a Business Bank Account. Opening a business bank account helps keep personal and business income and expenses separate. Using a business bank account can make it easier to track and record ...

  19. A Beginner's Guide to Starting a Business in Oregon

    Here's how you can leverage this booming economic landscape to start your business in Oregon. 1. Create a Business Plan. Running a successful business can be fraught with many challenges and complex processes. You need a well-structured business plan when starting a small business in Oregon.

  20. SWIFT planning launch of new central bank digital currency platform in

    Global bank messaging network SWIFT is planning a new platform in the next one to two years to connect the wave of central bank digital currencies now in development to the existing finance system ...

  21. NYC Congestion Pricing and Tolls: What to Know and What's Next

    The board of the Metropolitan Transportation Authority voted to approve a new $15 toll to drive into Manhattan. The plan still faces challenges from six lawsuits before it can begin in June.

  22. What Congestion Pricing's Arrival in NYC Would Mean

    Transit authorities plan to start charging motorists a fee to drive into New York City's crowded midtown Manhattan as soon as June. The aim of the congestion pricing plan, the first in the US ...

  23. How To Start Writing A Business Plan That Works

    Writing Your Business Plan Is Just the Beginning. A business plan can span from a quick roadmap sketched on the back of a napkin to a hefty document carefully crafted to align with industry standards.

  24. My ADHD Diagnosis Helped Me Survive a PIP at Work

    This as-told-to essay is based on a conversation with a woman based in the US who works in digital marketing. She was put on a performance-improvement plan several months into a new job.

  25. California fast-food workers will get $20 minimum wage, starting ...

    California fast-food workers cooking Big Macs or whipping Frappuccinos will start making a minimum wage of $20 an hour on Monday. For many, this means a 25% raise. The new state minimum uniquely ...