Starting a business is the dream of many entrepreneurial spirits across the globe. Despite the stock market crash of 2020and the economic downturn that followed it having affected establishments in all sectors, interest in starting a business was at an all-time high in July and August 2020.
This peak in interest might have been due to many Americans losing their day jobs as a result of the coronavirus pandemic, which brought with it a considerable infection risk when gathering in groups, forcing many businesses to close.
When faced with this unequalled adversity, many an entrepreneurial spirit has found clever ways to adapt their business model, and even new business ideas have been born from the ashes of the sudden recession.
If you are thinking of starting your own business, these are the 10 steps involved according to the U.S. Small Business Administration.
1. Conduct Market Research
Getting to know your competitors, community and potential customers is an essential step to finding your niche in the market. Once you know what your target audience is looking for and what’s already out there on offer, you can define a product or service with clearly defined Unique Selling Points.
2. Write a Business Plan
Your business plan will define the value proposition, structure, operating rhythms and growth plan for your business. It will help you ‘sell’ your business idea to potential investors and future employees.
3. Get Funding
The nature of your business, along with your business plan will define how much starting capital you’ll require. If you don’t have enough money on hand, you’ll either need to raise or borrow the capital, for example by taking out a small business loan, starting a crowdfunding campaign or getting venture capital from investors.
Find out more about getting small business funding on the SBA’s website.
4. Choose Your Location
Whether you’re starting an online business or a brick-and-mortar store, the location of your business is likely to affect your tax responsibilities and revenue, as well as the licences and permits that you’ll need.
5. Select Your Business Structure
Now, it’s time to choose the legal structure of your business – each of which will have different implications on your personal liability, how much tax you should pay, as well as your day-to-day operations. Common business structures are sole proprietorship, partnership, Limited Liability Company (LLC), Corporation and Cooperative.
6. Choose Your Business Name
This is the fun part! Find a memorable name for your business that reflects your personality and values. Make sure it isn’t already taken and make sure to register it as an entity name, trademark, Doing Business As (DBA) and/or web domain.
7. Register Your Business
Registering your business allows you to protect your brand and make your business official. If you’re trading under a name that’s different to your own, you’ll need to register with the federal government and might be required to register with your state government too.
8. Get an Employer Identification Number
Your federal and state tax ID – the Employer Identification Number (EIN) – will be an essential part of setting up your business. It will help you open a business bank account and pay taxes. Check if your state might require for you to get a tax ID as well.
9. Apply for Licenses and Permits
To avoid run-ins with the law, you’ll need to make sure you have the correct licenses and permits to run your business. These legal requirements will vary per state, industry, location and others – make sure to check with the right federal agency and issuing agency on how to apply.
10. Open a Business Account
At this stage, you should have all your paperwork ready to open a business bank account. Having a business bank account will make the process of paying, getting paid, and filing your taxes easier. It also helps you to stay legally compliant and protected.
There is a lot of setup work involved in starting your own business, but by following all the right steps, you’ll set yourself up for success while avoiding troubles in the future. These are unusual times that call for innovative and adaptive small business ideas. Whatever you do, make sure to take measures to keep yourself and your customers, clients and colleagues safe while doing business, especially in the coronavirus pandemic.