10 Steps to Start a Business: Tips for Aspiring Small Business Owners
Table of contents
Starting a profitable business is no easy feat. You need to have a clear goal and know how you want to achieve it. During this process, you will encounter many challenges and setbacks that cannot be solved with simple tricks and tactics.
Regardless of the industry, the first steps are always the same - you need to find
a niche, decide on a name and business model, obtain the necessary permits, and get started.
Starting a business requires little effort, but you can use step-by-step help. The real challenge is what comes after that: how to start earning money, generate a steady income, and maintain financial liquidity.
From a business idea to competition analysis
As is often the case, the beginning is the hardest. The idea for a company itself is the first step and for many people – the hardest. However, if you know what you want to do, you can move on and start working on specifics.
A good entrepreneur must get to know their competition. They simply must. That is why getting to know the market from the beginning and who you will be competing with is worth it. If you have chosen an industry in which there are several monopolists (e.g., a courier company), it may be difficult to break through. Therefore, before you proceed with the formalities, ensure there is a place for your business on the market.
Market research is a tedious process, but necessary. Without it, you can lose your funds and never earn a penny.
Check if you are ready to open a business
Running a business takes time, work, and commitment. You need not only a good idea, but also business skills and funds. You'll also need a fair amount of mental toughness and discipline when things worsen.
What can you do?
Find out how running a business can affect your lifestyle.
Find out where to get professional help and advice.
Make sure it's a business or a hobby
This point may seem rather odd. Can't you combine one with the other? In theory, yes. In practice, there is a difference. A business is supposed to bring you real income. A hobby, on the other hand, is something you do for fun, without a set schedule or pressure, and sales usually only allow you to cover your costs. Which option seems better to you?
Entrepreneurs and hobbyists differ in the need to, among other things:
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pay taxes,
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purchase insurance,
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acquiring licenses and permits,
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keeping records,
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reporting.
How do you go about it? Are you starting a business, or do you just want to show off an interesting hobby and be able to develop it further?
Determine whether you are a contractor or an employee
Another issue that may not have occurred to you when you were considering how to start a business. Recognize whether you are an employee or an independent contractor.
What is the difference?
Generally speaking, a contractor is his own boss and may work for many clients at once. He also often has his own tools and methods of performing tasks. A worker, on the other hand, reports to the employer and the latter controls where and how he does his work.
How to Start a Small Business in 10 Steps
You already know you want to start a business. But how do you go about it? The best approach is to divide the process into several smaller tasks.
1. Refine your business idea
Try to juxtapose your idea with reality: search the Internet for other companies in the industry. Check out what their leaders are currently doing and consider what you can do better.
Above all, ensure you provide users something unique (or the same thing, but faster and cheaper). Can you subscribe to this sentence? Great!
Now listen to what more experienced entrepreneurs say about starting a new business.
Consider franchising
A fairly safe option is to open a franchise of a well-established company in the market. You will get many ready-made resources: a circle of loyal customers, a concept, and a business model. All you need is a good location and start-up funds.
Choose a catchy name
Prefer to have something entirely your own? Welcome to the ambitious and brave!
The first step to starting a business is to give it a name. I recommend AI business name generators, which I've already written about.
A vital tip: check whether buying a domain for the name will be easy and link it to your social media accounts. Remember about an employer identification number.
Identify your target audience
You won't be successful if you don't consider who your customers will be and why they should buy from you. To start, gather demographic data, such as:
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age,
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gender,
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education,
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occupation,
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income,
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place of residence.
Later, try to identify your customers' interests and behaviors, including:
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hobbies,
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lifestyles,
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values,
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purchasing preferences,
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sources of information.
Finally, determine the psychological profile of the customer:
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personality,
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motivations,
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needs,
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pain points.
Of course, this is not a matter of guessing or relying on anecdotal examples. Base your conclusions on more concrete facts from, for example:
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surveys,
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market research,
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social media data analysis,
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Google Analytics.
2. Write a business plan
To open and run a company, at least in the first period of your activity, you may need a business plan. This is a document that will give you a basis for making decisions. At the same time, it may be necessary to obtain external financing, e.g. in the form of an investment loan from a bank or financing from various investors.
A business plan can be compared to a map of your company's needs, and for you it will be a definition of goals and actions, the implementation of which allows you to follow the business path you have chosen.
The basic elements of a business plan include:
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Description of the company - business idea, main assumptions of the company, method of implementation, strengths of the undertaking, areas of activity, vision and mission of the business, goals to be achieved in the perspective of several years.
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Description of the product or service - depending on whether you want to offer customers a product or service, describe them, indicate their distinguishing features and formulate a pricing policy.
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Analysis of the target customer group - together with an indication of the main needs and expectations of the target group.
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Analysis of the competition - description of the competitive environment, market trends and opportunities.
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Marketing strategy – a sales strategy for a product or service, a description of marketing and promotional activities. Determination of the place where such activities will be conducted.
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Competencies and qualifications for running a business – describe what experience and skills you have that will help you run a business.
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Description of contractors and suppliers – who will be your business partner, what suppliers you will have.
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SWOT analysis.
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Financial analysis – taking into account revenues and costs, cash flow.
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Sources of financing.
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Work schedule.
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3. Conduct market research
You already know the kind of people you want to target. Go a step further and carefully analyze your competition. This will help you understand the industry's opportunities and limitations.
It's time to think about what will make your product stand out from the competition. Your marketing strategy and communication language will be based on your USP.
Relatively inexpensive online tools can help you with this, such as:
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Google Analytics - by having a website, you can analyze user behavior and find out where they look most often or how they get to you;
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Social Media - create a short survey on your profile or simply observe what your potential customers are talking about;
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Online forums and discussion groups - this is where people most often share their opinions and experiences, which will help you come to many interesting conclusions;
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Keyword analysis tools - these will help you find out what phrases your target audience is typing most often.
Develop an evacuation plan
You are bursting with positive energy and enthusiasm. After all, you have a great idea that is sure to turn into a success!
Let me bring you down to earth a bit. Like any entrepreneur, you also need a strategy in case of failure. This is as obvious as planning an emergency exit in public buildings or practicing school fire drills.
Don't let carelessness bring you to the brink of collapse and to a loss of capital. When writing your business plan, include any potential difficulties and coping strategies.
Also consider the possibility that your business will not be as profitable as your initial assumptions. Do you have a plan B in case of failure? If not, quickly revisit this point!
5. Register your business
The fourth step is to determine the legal structure of your business. Again, you must think carefully about what will work best in your case. After all, a lot will depend on the decision you make. Not only how you will settle your taxes, but also your personal liability if you fail.
6. Insure your business
What to include in the cost of doing business, 2025? Insurance! Otherwise, equipment damage, theft or a customer lawsuit could put your business out of business.
Therefore, consider:
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Property insurance (covers property, i.e. buildings, equipment, or inventory, and protects against losses due to fire, theft, etc.).
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Business interruption insurance;
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Insurance for transportation, machinery and equipment;
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Insurance against accidents at work and unemployment (when you hire employees);
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Professional liability insurance (mandatory for doctors or lawyers, for example).
To begin with, ordinary property insurance is enough for you. But as your business grows, and its value increases, it's worth expanding it to include other sections. And yes, when you count every penny, insurance fees may seem unnecessary. However, remember that a peaceful night's sleep is worth the price!
7. Build a team
To turn your own business idea into a successful company, you need to recruit and hire good employees.
Again: it's worth sticking to the golden rules of team building.
But what if you are operating alone? Go straight to point 8!
Mission
A good team discussion of how each member and the group as a whole understands its mission has a big impact on day-to-day work. Determine while brainstorming:
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what are the most important tasks to be performed by team members?
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which tasks are to be performed independently and which in cooperation with others?
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what will be the result of joint efforts?
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what is your overarching goal and how will you measure it?
Goals
It is always a good idea to divide large tasks into several smaller ones. That's what goals are for. Describe them according to SMART criteria - make them specific, measurable, achievable, relevant and time-bound.
Which means that “improving customer service” is too general an objective. It's better to replace them with “reduce customer call-back time to one hour in the next three months.”
Roles and responsibilities
Each team member should know what is expected of them. It will be useful for you to write down all the responsibilities belonging to a particular person. This will work even better if the team has its own leader. He or she will coordinate the work and be responsible for the results of the department.
Basic principles
In Poland, we call it “the culture of the organization.” Establish rules for your team early on: the required dress code, the number of breaks, or how to communicate. You don't need rules for every behavior, but choose the ones that seem most important to you. Also keep it flexible - as the company grows, some rules will need to be replaced by others.
However, you can adopt general stipulations that will make every employee feel good.
Here are some of them:
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Be courteous to others. Don't gossip or throw malicious remarks.
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Share your experiences and opinions.
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During discussions, don't bring up all the side threads that come to mind.
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Respect time limits - finish and start your tasks on time.
Unfold your plan of action
Do you think writing a business plan is a waste of time? It will be if you don't include specifics in it. So, don't make beginner mistakes, and write a complete action plan immediately.
It should include:
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a summary of the current situation;
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an analysis of the market;
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an analysis of the competition;
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business model;
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marketing strategy;
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financial forecasts.
4. Decide how you will finance your business
Every business requires a financial contribution. Where will you get yours - from your own funds or from a loan? Do you have other savings that will keep you going until the business generates revenue? And do you already have an idea of how much the startup's establishment costs will be?
Break-even analysis
To determine how much money you need, conduct a break-even analysis. Under this rather mysterious phrase is a simple formula:
Fixed costs / (average price per unit - variable costs) = break-even point.
The result will tell you the minimum efficiency your company needs to achieve not to lose money. The formula also helps you understand where profits come from. ;)
And if you feel that something doesn't add up, take further action:
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Analyze which products or services are profitable and which are sold at a loss;
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Re-evaluate your product mix - this time, take into account not only your competitors' prices but also variable costs and the cost of your labor;
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Consider how to reduce your overall fixed costs and some variable costs.
Reasonable investments
When you start learning to ski / snowboard / whatever, you don't immediately invest in the best equipment. As a novice, you usually check your options first and use rentals so you don't burn through money unnecessarily. Such prudence also comes in handy when starting a business.
Read up on online forums and ask friends in the industry which expenses make sense and help you achieve your business goals. Create a plan and stick to it, monitoring all expenses.
Making decisions
The decision-making process should be clear and understandable to all team members. Consider whether they will be made by consensus, vote, or perhaps at the board level.
Either way, each of them should be:
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logical,
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supported by solid arguments and reliable information,
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vetted and consulted by experts in the field.
8. Choose your suppliers
Even if you are independent on many levels, there will be a segment where you need others. Someone has to produce the carton for you, someone has to produce the materials, and someone else has to get the product to the customer. In a word. You need B2B partners.
It's worth choosing them carefully, because they will have access to your company's sensitive data. Also, before you decide on a specific service, ask the contractor about their experience in the industry, their history of working with current clients and how they contribute to their growth.
Of course, there are no universal criteria. But there are key features you need to check:
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Inclusion of multiple payment types for customers;
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A modern interface for making sales;
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Combination of services with accounting management.
9. Build a brand and advertise
Have a great business idea? Let others know about it!
It will be most effective if you go straight to digital marketing.
Have your own website
Whoever is looking for your services will first look online. A simple Google business card may not be enough; you need a professional website. Create your own place on the web with AI website builder and gain new customers. In WebWave you can also successfully create your own online store.
Social media
Social media is the best promotional tool of our time. With the help of well-run profiles, you can not only reach your target audience, but also rock the business - for example, offering discounts and coupons to engage your followers.
Paid ads
Finally, something that will quickly make noise around your company – PPC!
Paid ads bring fast results, are precise (you can target them based on location, interests, demographics, or user behavior) and provide detailed data on campaign effectiveness. In addition, they simply increase brand visibility, help attract customers and are flexible: you decide how much you can spend on a given ad.
Have I convinced you? Try one of the most popular platforms:
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Google Ads (the largest and most popular)Facebook Ads (for activities on Facebook and Instagram)
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Microsoft Advertising (an alternative to Google Ads, useful for companies operating in B2B industries)
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LinkedIn Ads (aimed mainly at professionals).
10. Strive for continuous development
I think I can congratulate you now. Your company exists, and you can start selling!
It's time for the most challenging task: making a profit and staying on the market.
Development is necessary to make this possible. Unfortunately, there is no simple recipe for success here. Arm yourself with patience and be ready to work hard. In addition, follow trends and try to adapt to changes quickly.
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How to Start Your Own Business? Summary
Owning your own business is a huge opportunity, but also a challenge. If you are looking for your niche, then your own business may be the job for you. Remember to approach it with caution, analyze all the pros and cons and plan for the future. All of this can lead your business to great success. Good luck!
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Company.
Help.
Templates.
FAQ.
What are the first steps to choose a business?
To decide a business, start by identifying your interests and skills. Research various small business ideas within your area of expertise. Consider market demand, potential profitability, and whether you prefer to work from home or need a physical location. It's essential to analyze your competition and figure out what makes your business unique.
How can I secure financing options for my startup?
There are several financing options available for startups, including business loans through the Small Business Administration (SBA), personal savings, crowdfunding, or angel investors. You’ll want to prepare a solid business plan that outlines your financial needs and projections, which will help communicate your vision to potential lenders or investors.
What should I include in my business plan to help start my own business?
Your business plan will help you outline your business goals, target market, competitive analysis, marketing strategy, and financial projections. It should also detail your business structure and operations plan. This document is essential for securing financing and guiding your initial steps to launch and grow your business.
What steps should I take to establish an online presence for my business?
To establish an online presence, start with creating a professional website that reflects your business name and branding. Utilize social media platforms like TikTok and Facebook to connect with customers and promote your products or services. You’ll also want to consider search engine optimization (SEO) strategies to improve visibility and attract traffic to your site.
Do I need to register my business, and how do I do it?
Yes, you’ll need to register your business with the appropriate state or local authorities. This process often involves choosing a business name and type of business structure, such as LLC or corporation. You may need to apply for an Employer Identification Number (EIN) from the IRS if you plan to hire employees or if your business structure requires it.
What accounting software is best for managing my business finances?
The best accounting software for managing your business finances depends on your specific needs. Popular options include QuickBooks, FreshBooks, and Xero, which can help you track income and expenses, generate invoices, and manage your business checking account. You’ll need to choose software that integrates well with your other tools and is user-friendly.
How can I grow my business after launching?
To grow your business, focus on building your customer base through effective marketing strategies, improving customer service, and diversifying your product or service offerings. You can also explore partnerships with other businesses or utilize the local chamber of commerce resources to connect with potential clients and collaborators.
What small business ideas require little to no money to start?
Some small business ideas with low startup costs include consulting services, freelance writing, virtual assistance, and online tutoring. You can also consider drop-shipping or affiliate marketing, which allow you to start a business with no money by selling products without holding inventory. Researching these options can help you find the best fit for your skills and market demand.
How can I effectively manage my business operations?
Effectively managing your business operations involves setting clear goals, implementing efficient processes, and regularly reviewing your performance. Utilize project management tools to keep track of tasks and deadlines, and invest in training for yourself and your employees. Regularly assessing your business needs and adjusting strategies will also help you stay on track to achieve growth.