Today, everyone wants to create something they believe in and have the freedom to shape their future. That is one of the biggest reasons millennials and Gen Z have shifted their career paths toward entrepreneurship. They look forward to pursuing their passion and turning their ideas into reality. But unfortunately, it takes more than ambition and ideas to become a successful entrepreneur. So, are you ready to embark on an entrepreneurial journey? Truthfully, starting a business can be an exhilarating endeavor, brimming with new opportunities, but it also demands thoughtful planning and preparation.
As an emerging entrepreneur, you must create a business plan to give investors a clear picture of your product and service offerings. Likewise, devise a budget, figure out expenses, and hire people.
At the same time, you must define your operational processes and workflows to set clear expectations for the team. You must tackle dozens of details, from printing business cards to selecting an entity for your startup. If you are ready to kickstart this journey, keep reading.
Here is a detailed checklist for starting a business.
1. Create a Business Plan for Starting a Business
The primary objective of creating a business plan is to define your objectives, goals, and expectations. It will lay a roadmap for getting your company off the ground, especially if you plan to find investors. Similarly, this plan will be helpful when applying for a loan, as lenders want to evaluate the business’s potential before giving money. Now, the question is how to make a business plan. Look below.
- Apply for EIN: So what is an EIN, and how does it work? An employee identification number (EIN) is a unique nine-digit number allotted to a business entity. In short, you must mention your company’s identification code on the business plan. It would give investors and lenders confidence that your business has been registered already.
- Business Description: It will include your company’s structure, value proposition, and mission statement.
- Market Analysis: Here, you must evaluate where your business stands compared to the market’s rivals. You can dig into industry trends to evaluate how much market share your startup can capture in its initial years.
- Financial Projections: Forecasts will include your pricing strategy, investor details, and financial forecasts.
- Management Overview: Investors want to know how you will run the business; hence, give an overview of the operation side. You can include distribution channels, logistics, production, etc.
2. Estimate Startup Costs
Starting a business requires much more than a stellar business idea. After all, you require substantial capital and financing to fund the business and get your boat sailing. Thus, you should calculate the startup costs. These include,
- One-time costs include the business registration fee, lease deposits, and fixed asset purchases.
- Staff costs can be calculated by accumulating the costs incurred during the recruitment process and monthly wages.
- Overhead costs include utility bills, office rent, taxes, stationary, etc.
Now, how can you fund these startup costs? The best way is to invest your savings into the business. However, if you don’t have enough savings, finance the company through loans. You can opt for Small Business Association (SBA) loans or get working capital finance. It would spare you enough cash to cover the costs and kickstart business operations.
3. Obtain License & Permits
Once you have registered your business and secured the EIN, it is time to obtain the necessary license and permits. Depending on your business niche, you will need a federal permit. Likewise, some businesses also require state licenses. It mainly includes banks, physicians, building contractors, funeral directors, accountants, barbers, etc.
Moreover, if your company sells physical products, you must acquire a sales tax permit because your income will be taxable. Hence, you must also charge a certain percentage of sales tax on your products and collect it from your potential customers.
4. Choose a Business Structure
Are you running the company single-handedly? Do you have partners on board? Select a business structure depending on how you wish to run the business. Here are a few options.
- Sole proprietor: Anyone who wishes to be the company’s sole owner can start as a sole proprietor. It means you will be liable for all business obligations, including its assets, liabilities, or unpaid debts.
- Partnership: If there is more than one company owner, you can label it as a partnership. It will allow you to split the company’s legal and financial obligations. Similarly, all partners will have a share in profits that will be the same proportion as their capital investment.
- Corporations: To separate business obligations, open a corporate. It will make your business a separate entity that owns all assets and liabilities of the company.
5. Create a Management System
Do you want to follow a flat hierarchy or a long chain of command? A management system is vital for every business, whether big or small. It helps formalize processes for managing workflows, finances, teams, and organization.
If starting the venture with a team, create an organizational chart to define the reporting lines. It would ensure that all employees are on the same page. Similarly, determine every person’s responsibility by providing a detailed job description. It will eliminate confusion and oversights from day one. However, if you are starting alone, create comprehensive planners and calendars. Likewise, define the budgets, invoices, and set industry-specific KPIs to measure performance.
6. Market & Launch Your Business
Once you have dealt with the business plan and its operation leg, it is time to think through your marketing strategy. You can begin by considering how you want others to perceive your brand. Are you the next big thing in the fashion industry? Do you plan to send a social message? Depending on your goals, create a brand voice and align it closely with your market niche. It will help build a connection with audiences while marking your mark in the business world.
As far as marketing tools are concerned, invest in a website. It acts like a digital storefront where customers can browse and shop. Likewise, build a stellar social media presence to connect with your audience and spread the brand message.
Undeniably, starting a business in today’s competitive landscape is no easy feat. It demands persistence, consistency, and hard work to kickstart a venture. However, if you take things step by step, everything could become straightforward. Therefore, the first step towards starting a business should be creating a plan, obtaining licenses, and choosing a structure. Likewise, you must look into the operational side, devise marketing plans, and recruit talent.