In this blog serie you will be given tips, insights and information from myself and several small business owners. The series purpose is to give you the push you need to start your own small business. There will be two parts of this series; interviews with small businesses, what you need to start a small business and insights about the small business market.
This blogpost will give you a 10 step plan to follow when starting your business and a few tips.
Hopefully you will get the courage to start your own business! Turn your passion or hobby into your business. If you need help or have any questions about starting a business feel free to contact me.
Starting your own small business is exciting and challenging at the same time. I like to refer to it as a learn as you go process, although there are many things you can prepare for beforehand. For example the business name and products/services you offer.
As the owner of your own business you not only have to make products or provide the services, you also have to take of the financial part, administration and marketing. You could hire specialists to take over or assist you with these tasks, but most small businesses can’t afford that in the beginning.
The following steps are to guide you through the process of the starting your business.
- Do your market research.
This is not the fun part of starting a business but in my opinion might be the most important one. Find out who your competitors are and what they are doing to market their product/service. If there are many competitors doing exactly the same of what you attend to do, it might be a smart move to market your product/service differently. The market research is part of your business plan.
- Write a business plan.
In the business plan you write down your idea and how you thing to make it happen. It is the foundation of your business. In a business plan you write down how to structure, run and grow your business. When writing a business plan think about the location, will you work from home, from an office or do you need to rent/buy a store. The most important part of the business plan is to make a rough lay out of how you want to do certain things such as marketing. Don’t forget to make a financial overview with the costs of making your product, the selling price and if you need funding how are you going to get that and how much you need. Finding funds can be done in many different ways; a loan from family, the bank or friends, start a go-fund-me, a fundraiser, your own savings or even a business partner.
- Choose a business structure.
What “type” of business are you? In every country they use a different system. The business structure that you choose will have impact on the registration requirements, taxes and the personal liability. I will explain the main differences between the business structures. Business structures without corporate (legal) personality are:
- Solo proprietor or solo trader. This means you are the only owner, and are fully reliable for your business. You can hire staff but not a business partner. Freelancers register as a solo proprietor of solo trader as well.
- Commercial partnership. If you want to start a business with a partner this is the option for you. You will work under the same common name.
- Public partnership. In a public partnership you practice your profession alongside your partners under a shared name.
- Limited partnership. If you were thinking about setting up a commercial partnership, but were short on capital or needed a financial backer, then a limited partnership might be just the legal structure you’re looking for. In a limited partnership, your financial backer actually becomes a partner in your business. That partner is referred to as a limited, sleeping or silent partner.
There are also business structures with corporate (legal) personality but these are often bigger businesses.
- Register your business.
If you have to register as a small business, depends on your location and business structure. In many countries you can make an appointment at the federal government and become a legal entity. The major perks of registering your business, is that you get trademark protection for your business name. Depending on the country and business structure, a registration can cost money. In the Netherlands a solo trader business registration costs €50,- once. Along with the business registration you have to get your state tax ID. In some countries you will receive it automatically and in other countries you have to apply for it using your employer identification number (EIN).
- Open a bank account.
As a business you can open a business bank account. A business bank account is important so you can separate your business incomes and set aside money to pay for the taxes.
- Apply for licenses and permits.
In order to stay legally compliant, make sure to apply for the right licenses and permits. These will vary per industry, state, location, business type and other factors.
- Apply for insurance.
There are many insurances to apply for, depending on your business type and location. I would recommend getting a liability insurance and health insurance for sure. Many industry related websites offer information on which insurances are recommended for your type of business. If you are still unsure you can always ask other businesses what insurance they have.
- Design a logo.
Let someone design a logo, or fo it yourself. The logo will be used on many communication tools such as social media, your website, business cards, invoices and flyers. The logo will be your first point of brand awareness and recognition.
- Buy a domain name and design a website.
In my eBook, I explain this step more in-depth. The domain name should be the same as your business name or very similar. There are several websites that allow you to buy a domain name. Building a website doesn’t have to be hard and complicated. WordPress and Wix both offer templates that you just fill in. Or you can hire a website designer.
- Make social media accounts.
In order to market yourself, you can use social media as a tool. There are so many different social media options, for any market and age group. When making social media profiles use your business name, to gain brand awareness. Social media is used
Some tips that will help you when you are starting your business:
Tip 1 Choosing your business name.
Make sure to choose a business name that reflects your business product/service or is unique on its own. Always check if your business name is available or used by someone else. You don’t want people confusing your business with someone else’s.
Tip 2 Be passionate about what you do.
Loving every part of your business is almost impossible, but you need to hype yourself and your business up! You will spend a bunch of time and energy in your business, so it is really important to truly enjoy and love what you’re doing. And especially be excited about your own products or services.
Tip 3 Don’t do it alone.
Starting a business is time consuming and a very exciting thing to do. You will need a support system consisting of friends, family and more. They can help you packing orders, or support your social media posts, promote you to their friends and family. Most importantly, you can use their knowledge in your advantage. For example, your friend has a degree in finance. They can help you set up your finance and teach you how to pay for taxes. And last but not least they can help you with judging your ideas. Sometimes I get super exited about an idea and then my friends talk to me about the execution and how I see it in my head. That is sometimes the best moment to stop talking, or to tell them how I can make it happen. And they are the ones who buy first, because they got super excited as well.
Tip 4 Get clients or customers first.
In times like these it is hard to find clients and customers willing to buy from a starting company. Spend time to connect with potential clients/customers. You can never market yourself too early.