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8 Steps to Starting Your Own Businessby: Candice Landau STARTING 559 Shares:This article is part of our “Business Startup Guide”—a curated list of our articles that will get you up and running in no time!People often ask us for a list of steps they can use to start their own business. From business type to business model to physical location, there are so many variables!However, there are things that every business needs to do to get off the ground. So, here are the eight key steps you need to take to start your own business. Just remember, be flexible. Every business is unique and you may need to refine this list as you go.1. Conduct a personal evaluation“Know yourself, and work in a job that caters to your strengths. This knowledge will make you happier.”– Sabrina ParsonsBegin by taking stock of yourself and your situation:Why do you want to start a business? Is it money, freedom and flexibility, to solve a problem, or some other reason?What are your skills?What industries do you know about?Do you want to provide a service or a product?What do you like to do?How much capital do you have to risk?Will it be a full-time or a part-time venture?Your answers to these types of questions will help you narrow your focus.This step is not supposed to dissuade you from starting your own business. Rather, it’s here to get you thinking and planning. In order to start a successful business, passion alone isn’t enough.You need to plan, set goals, and above all, know yourself. What are your strengths? What are your weaknesses? How will these affect day-to-day operations? You could conduct a SWOT analysis on yourself to figure this out.As you get started, your business will likely dominate your life so make sure that what you’re doing is stimulating and challenging, but not completely outside of your expertise. You’re going to be in it for the long-haul. Use what you learn from the SWOT analysis to think through what you want your life to be like, not just what you want from your business.Some good questions to ask yourself include:What would you do if money wasn’t an issue?Is money really important? Or rather, is making a lot of it really important? If it is, you’re probably going to be cutting out a number of options.What really matters to you?Do you have the support of your family, especially your immediate family? They may have to make sacrifices at the beginning, so it’s important to have them behind you.Who do you admire in business? Maybe there’s even someone in the industry you’d like to go into. Why do you admire them? What are their likable traits? What can you learn from them?Answering these questions (and many more) about yourself and your abilities isn’t necessarily going to ensure you’re successful, but it will get you thinking about your goals and about what motivates and inspires you. Use this time to make sure that you are matching the business you want to start to your personal aspirations.Be sure to take our quiz to find out if you’re entrepreneur material, too.2. Analyze your industry“The more you know about your industry, the more advantage and protection you will have.”– Tim BerryOnce you decide on a business that fits your goals and lifestyle, evaluate your idea. Who will buy your product or service? Who will your competitors be? At this stage, you also need to figure out how much money you will need to get started.Your “personal evaluation” was as much a reality check as a prompt to get you thinking. The same thing applies when it comes to researching your business and the industry you’d like to go into.There are a number of ways you can do this, including performing general Google searches, speaking to people already working in your target industry, reading books by people from your industry, researching key people, reading relevant news sites and industry magazines and taking a class or two (if this is possible).If you don’t have time to perform the research or would like a second opinion, there are people you can go to for help, like government departments and your local SBDC.Learn To Clean EffectivelySPONSORED BY CONNATIXYou've been cleaning wrong all these years - using probiotics to clean your house will leave it sparkly clean and healthy.There are also a number of less traditional sources worth turning to:Advertising representatives for statistics and data on your competition or the industry in generalList brokers sell mailing or email lists based on demographic attributes. Like, if you think your target market is people making above a certain income in south Texas, a list broker may be able to tell you how many people fit that criteria, to give you a sense of how big your target market actually is.Industry suppliers (again to get a sense of demand and for market information)Students who will likely be happy to perform research for you at an affordable fee.3. Evaluate your target audienceValidate your business idea by creating a pitch page.To determine how attractive your prospective market really is (your own desires aside for the moment), we suggest doing a market analysis.It will guide your research as you think about:How urgently do people need the thing you’re selling or offering right now?What’s the market size? Are there already a lot of people paying for products or services similar to yours? Have you honed in on who exactly your target market is? Being specific will help you focus your marketing message and investment.How easy is it (and how much will it cost you) to acquire a customer? If you’re selling enterprise software, this may require a significantly larger investment than a coffee shop.How much money and effort will it cost to deliver the value you would like to be offering?How long will it take to get to market? A month? A year? Three years?How much up-front investment will you need before you can begin?Will your business continue to be relevant as time passes? A business that repairs iPhone X screens will only remain relevant so long as the iPhone X sticks around. If your business is only relevant for a specific period of time, you will also want to consider your future plans.If you like, you can even take things a step further and consider the consumer needs currently not being met by businesses in the industry. This is a good time to take a look at potential competitors. And remember, the presence of competitors is oftentimes a good sign! It means that the market for your product or service already exists, so you know that you have potential customers who are willing to spend money on your product or service.While you’ve got the time, learn as much as you can about your competitors, about what they provide to their customers, how they attract attention, and whether or not their customers are happy. If you can figure out what’s missing before you even get started, your job will be made that much easier when you do finally set up shop.4. Set up your businessRealistically, registering your business is the first step toward making it real. However, as with the personal evaluation step, take your time to get to know the pros and cons of different business entities.If at all possible, work with an attorney to iron out the details. This is not an area you want to get wrong. You will also need to get the proper business licenses and permits. Depending upon the business, there may be city, county, or state regulations as well. This is also the time to check into insurance and to find a good accountant.Types of business formations include:Sole proprietorshipPartnershipCorporationLimited Liability Company (LLC)Spend some time getting to know the pros and cons of each business formation. If you need help, we’ve got a full guide on Legal Entities, Licenses, and Permits.While incorporating can be expensive, it’s well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you are less likely to be held personally liable.Other things you will need to do include deciding on a business name and researching availability for that name.5. Start the planning process“Our goals can only be reached through the vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”– Pablo PicassoIf you will be seeking outside financing, a business plan is a necessity. But, even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need to get started, what it will take to make your business profitable, what needs to get done when, and where you are headed.In the simplest terms, a business plan is a roadmap—something you will use to help you chart your progress and that will outline the things you need to do in order to reach your goals. Rather than thinking of a business plan as a hefty document that you’ll only use once (perhaps to obtain a loan from a bank), think of it as tool to manage how your business grows and achieves its goals.While you might use your business plan as part of your pitch to investors and banks, and to attract potential partners and board members, you will primarily use it to define your strategy, tactics, and specific activities for execution, including key milestones, deadlines and budgets, and cash flow.In fact, the business plan does not have to be a formal document at all if you don’t need to present your plan to outsiders. Instead, your plan can follow a Lean Planning process that involves creating a pitch, forecasting your key business numbers, outlining key milestones you hope to achieve, and regular progress checks where you review and revise your plan.If you aren’t presenting to investors, don’t think of this as a formal pitch presentation, but instead a high-level overview of who you are, the problem you are solving, your solution to the problem, your target market, and the key tactics you will use to achieve your goals.Even if you do not think you need a formal business plan, you should go through the planning process anyway. The process will help to uncover any holes or areas you have not thought through well enough. If you do need to write a formal business plan document, you should follow the outline below.The standard business plan includes nine parts:The Executive SummaryTarget MarketProducts and ServicesMarketing and Sales PlanMilestones and MetricsCompany OverviewManagement TeamFinancial PlanAppendixIf you would like detailed information on how to write a business plan to present to banks or funders, there are plenty of online resources, including our own comprehensive guide.You will also find hundreds of sample plans for specific industries on this very website. Use them at your leisure but be prepared to adapt them to suit your precise needs. No two businesses are the same!Types of business plans:If you are simply creating a business plan in order to stimulate a discussion with potential partners and associates, you may want to consider opting for a “startup plan,” also known as a feasibility plan. As your business grows you can flesh out the sections as you see fit.In contrast to the standard plan and the startup plan, is the operations or annual plan. This type of plan is used for internal purposes and primarily reflects the needs of the members of the company. This type of plan is not intended for banks and outside investors. You will use it either to plan your company’s growth or expansion or to set company-wide priorities.If the latter is true and you are using the plan in order to direct your internal strategy, you are creating a strategic plan, a type of plan that will include a high-level strategy, tactical foundations of the strategy, specific responsibilities, activities, deadlines and budgets, and a financial plan.6. Have a plan for fundingDepending on the size and goals of your venture, you may need to seek financing from an “angel” investor or from a venture capital firm. But, most small businesses begin with a loan, financing from credit cards, help from friends and family, and so on.Investment and lending options include:Venture capitalAngel investment (similar to venture capital)Commercial (banks)Small Business Administration (SBA) LoansAccounts receivable specialistsFriends and familyCredit cardsFor in-depth information on funding, see our complete guide on how to get your business funded, which includes detailed information on each of the above-mentioned options.Note: A beautifully fleshed-out business plan does not guarantee you will get funded. In fact, according to Guy Kawasaki, the business plan is one of the least influential factors when it comes to raising money.To stand a realistic chance of getting hold of the funds you need to get started, you’d be better off first focusing on your “pitch.” Not only will it be easier to fix because it contains less, but you’ll also get feedback on it—most investors don’t bother reading the full business plan, though they may still expect you to have it.It’s also much easier to turn a pitch into a business plan than it is to pare back your plan.7. Set up your spaceYour business plan has been laid out, the money is in the bank, and you’re ready to go. If your business is online and you won’t need a storefront, you’re probably looking at building your website and choosing a shopping cart solution. Maybe you’ll be able to work out of a home office or a co-working space instead of renting or buying office space. But if your business needs a dedicated brick and mortar location, there are many considerations.Finding a location. Negotiating leases. Buying inventory. Getting the phones installed. Having stationery printed. Hiring staff. Setting your prices. Throwing a grand opening party.Think through each of these steps carefully. Your business location will dictate the type of customer you attract, what types of promotions you can run, and how long it will take you to grow. While a great location won’t necessarily guarantee your success, a bad location can contribute to failure.As you’re thinking about where you want to set up shop (including the city and state), consider the following:Price: Can you realistically afford to be where you want to be? If not, or if you’re cutting it fine, keep looking.Visibility: Will people easily be able to find you? Will they see your promotions and offers? Are you in the center of town or further out? How will this affect you?Access to parking or public transportation: Can people easily find you from available parking options and transportation routes? If they have to look too hard, they may give up.Distribution of competitors: Are there many competitors close to you? If so, this may be a sign that the location is premium for the clientele you wish to attract. It may also mean you do no business. Consider carefully how you wish to approach this type of situation.Local, city, and state rules and regulations: Look into regulations, as areas may be more stringent than others. Ensure there are no restrictions that will limit your operations or that will act as barriers to your store.Your marketing will set the stage for the future of your store. It will set expectations, generate hype (if done well), bring business in from day one and ensure that people know where you are and what they can expect from you.Your store’s layout, design and placement of your products will decide not only the overall atmosphere of the store but what products people see and buy. Consider the areas you want well lit; how you will display products (if necessary); what various colors will make people feel, and how people will move through your store.There are reams of literature on why we buy what we do, all of it fascinating and much of it informative. Begin thinking about how you shop—this will get you to think more critically about your own store.Consider: placing products low on shelves will mean that people are unlikely to see them and therefore unlikely to buy them, whereas placing them at eye-level will mean they’re seen first and are therefore probably more likely to be purchased.Your choice of products and how you decide to price them will create a reputation. Rather than stock everything of a similar price range from one or two catalogs, consider only choosing those items that will create the feel you want to become known for.If you’re a service business, build your services in a similar manner, considering your different clientele and the value they will get from the different options you have on offer. If a very affordable package will cheapen your brand, consider excluding it. If a pricier option will limit your clientele too drastically, maybe cut back on some of the services included.8. Prepare for trial and errorWhether you’re starting your first or your third business, expect to make mistakes. This is natural and so long as you learn from them, also beneficial.If you do not make mistakes, you do not learn what to do less of and what to emphasize. Be open-minded and creative, adapt, look for opportunities, and above all, have fun!The great thing about owning your own business is that you get to decide what you want to do and where you’ll grow.Was this article helpful?(91 VOTES, AVERAGE: 4.12 OUT OF 5)Sponsored ContentBusiness Planning Made EasyBY LIVEPLANLivePlan is the #1 selling business planning software in the world. Try it risk free for 60 days, or your money back!

1. Conduct Market ResearchMarket research is the critical first step to understanding the unmet needs of your target market and gives you incredible insight into the direction your company should take. It will help to define the needs and desires of your customers so your company can fill that niche. Even once your business is a success, continuous market research will be necessary.Critical Role of Market ResearchBy conducting market research, you’ll find out where you fit into the marketplace. Market research should answer the following core questions for your business:What is my unique offering to the market?What else can I offer the target market?How can I meet the needs of the market?Who is my competition and what are they offering?Is my product going to meet customer needs?Types of Market ResearchMarket Segmentation - will capture needs, values, attitudes, behaviors and demographics to best determine who is your customer.Product Testing - is a process of measuring the properties or performance of products. It will determine product improvements and opportunities as your customer changes their purchasing behavior.Advertising Testing - is the procedure of vetting your ad concepts with a sample of your target market. This is important to find out exactly what resonates with your customer. Test some ads on your audience and ask for feedback so you can appeal to your customers with improved advertising.Customer Satisfaction and Loyalty Analysis - is a type of research aimed at identifying the key drivers of satisfaction. It also measures whether customers are likely to continue using a company’s products and services.Brand Awareness - is used to help measure the effectiveness of marketing campaigns in regards to brand recognition, brand recall, brand image, brand identity, brand loyalty, and brand trust.Major Sources of Market ResearchThe quality of market research data is important because it will have an impact on the quality of the research outcomes. The two main categories of market research methods are primary and secondary sources and using them both will give you the most reliable information.Primary research should focus on the particular needs of your new company. You could either conduct it yourself or outsource it to a specialized company. Primary market research methods include:InterviewsSurveysObservationFocus GroupsExperiments and Field TrialsSecondary research is effectively investigating the research conducted by others. Useful research sources are trade associations, government, chambers of commerce or other reputable sources, including:Public SourcesEducational InstitutionsCommercial SourcesThere are two categories of data collection: qualitative and quantitative.Qualitative methods are useful for digging deeper into your findings. They are the outcome of things like interviews and focus groups. They categorize most things that you can not assign a number to, such as a written answer in a survey.Quantitative methods include anything that provides numerical data and functions only with a large sample size. It then allows statistical analysis to find any significant information and trends.2. Write Your Business PlanYour business plan is vital to outline everything you will do and how you will do it.The format for your business plan is important to consider. There tend to be four categories of business plans: strategic, traditional, lean startup, or feasibility. Choose your format according to what best suits your type of company.Business Plan FormatsStrategic business plan format - The strategic business plan format focuses more on higher-level goals rather than the detailed methods. It plans how to achieve your goals and is a great asset for communicating the big picture to others.Traditional business plan format - A comprehensive business plan, covering all the steps, is good for detail-oriented people. This plan is very useful if you are thinking of asking for funding.Lean startup format - This format provides a visual picture of facts about your business, in the form of charts that cover the main information about your company, including finances, customers and structure.Feasibility business plan format - This business plan seeks to answer can the company make a profit and who is going to buy what the company has to offer.Business Plan StructureNo matter what type of company all business plans should cover the following elements::Executive summary - a quick outline of your company.Company description - details what your company does.Market analysis - This is where you will use your market research including some graphs from your quantitative research.Organization and management - the structure of your business.Service or product - what exactly you offer.Marketing and sales - your market and sales strategy.Funding request - how much money you require to conduct your business.Financial projections - detail the current state of finances and add financial projections.Appendix - this is optional to add anything referenced earlier in the plan such as permits, data or research.For an in-depth guide to begin your business plan you can learn more on how to write a business plan.3. Fund Your BusinessIt is important to calculate exactly how much money you will need to start. Assess your current financial position then decide how much money you may need for the next 3-5 years.5 Ways to fund Your BusinessThere are many ways to accomplish self-funding from savings accounts, zero interest credit cards, or leveraging other personal assets.Venture capital funding comes from investors whose money is managed by an investment fund. They look to invest in startups or small businesses that they believe will make them money in the long run.Crowdfunding is a fast way of raising money online, usually from people who believe in what you’re doing, or those who want to buy your product. Here is a list of 9 popular crowdfunding platforms that you could choose from.KickstarterGoGetFundingGoFundMeUluleIndiegogoCircleUpPatreonLending ClubRocketHubSmall business loans are the best option to get enough money to fund your business without giving up equity.A key benefit of angel investors is that they are often entrepreneurs who want to help other startup businesses. However, the investment may be smaller than the amount you could receive from a bank or other sources.What to consider when choosing a type of business funding.There are a number of avenues to consider when you’re seeking business financing. Think about these crucial factors when choosing how you’ll fund your company:Long-Term GoalsAccess to Equity MarketsWhat the Interest Rates AreThe Repayment TermsMaintaining ControlYour Business StructureBorrowing Requirements4. Pick Your Business Address LocationPicking your business address location is a strategic decision. Your state, city, and neighborhood you choose to set up your business will determine taxes, permits, licenses, zoning laws, and state and federal regulations.Types of Business AddressesHome address - Using your home address as your business address will work for some types of industries. For example if you are in a service industry, such as a hairdresser or personal trainer, it may not be feasible to conduct your business from home unless you have a separate space for the business. However, if you’re a freelancer or consultant it may work well for you to use your home address.Another important aspect to consider about using your home address is it won’t be able to protect your privacy. If you care about protecting your personal information a home address is not the best business address option.PO Box - You can rent a PO Box in 3 easy steps. Before signing up there are 5 reasons for renting a PO Box you might consider. It is an option if you’re concerned about your home address being made public. However, if you run an LLC, corporation, or partnership a PO Box is not accepted.Commercial Business Address - you can use a commercial business address to register your LLC or corporation. The requirement is a real street address, not a PO Box.You can use these for your commercial business address:Virtual Mailbox - This gives you a real business address to receive mail and packages. When you receive mail, it is scanned and sent to you digitally. You’ll get real-time notifications when it is processed in your mailbox. Then you login and decide whether to forward, recycle, or trash the mail.Coworking Spaces - These are a shared space in an office building used by individuals or a team. They provide access amenities such as meeting rooms, open collaboration spaces, work desks, and more space than your home, but without the corporate atmosphere of a traditional office.Private Mailbox - These are rented mailboxes from a Postal Annex, UPS Store, PostNet, or located somewhere in a retail center. Your mailbox will be linked to that address, so it still provides you with a physical address.Commercial Office - Commercial property can be land, property, or facilities that are either zoned for or used exclusively for business purposes.Virtual Office/Business Centers - A virtual office gives businesses a physical address and office-related services without the overhead of a long-term building lease and administrative staff.5. Choose a Business StructureThis may affect your taxes, financing, liability and legal requirements so it’s best to choose your business structure wisely before registering your business.There are three main factors that affect the type of business structure you select; taxation, record-keeping, and liability.Sole Proprietorship - This is a popular and easy way of organizing your business, which gives the owner complete control. The disadvantage is that the owner is personally liable for the business and is thus at a greater personal risk.Partnership - A partnership structure can be used when there is more than one person who shares the losses or profits of the company.There are two main types of partnerships which are Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs).LLPs give all owners limited liability which protects each partner against the risk of actions from other partners. Limited partnerships, on the other hand, give one partner unlimited liability while the others have limited liability.Limited Liability Company (LLC) - This structure protects the owners from personal liability. This means that if the company accumulates debt, personal assets cannot be taken from the owners to pay the debt. It also gives profits and losses to owners with business taxation. This is a common choice amongst medium to high-risk companies. Owners who have a high amount of personal assets also tend to prefer this format.C Corporation - A C Corporation is completely separate from the owners being a legal entity in its own right. It can be taxed, held liable and make profits. Sometimes, the profits will be taxed twice both on receipt of profit and when shareholders are paid out.S Corporation - They are designed to remove double taxation of the C Corporation. S Corps can give losses and profits to owners without having corporate tax rates.6. Register Your BusinessBoth the business structure and location will affect how you register your company. To register your business a registered agent is required. It is also important to understand if your business operates in another state in order to register under foreign qualification.Why Do You Need a Registered Agent?Registering your company requires a registered agent to be assigned, which is a person or business that can accept the service of process documents. It is their role to receive government and legal documents and communications from the Secretary of State on behalf of the LLC or corporation.These documents may include:Tax-related documents from the IRS, the Franchise Tax Board, and other government tax entities.Normal corporate filing documents, such as reminders for filing the statement of information and other information sent by the secretary of state.Notice-of-litigation mail (mail that initiates lawsuits) and legal documents when others want to formally contact you or send you notice.The registered agent must be in the same state as your business and needs to have a physical address in the state not a PO box, and be contactable during regular business hoursForeign QualificationThe foreign qualification process means you need to register as a foreign entity for any other states where you want to perform business operations outside of your state of formation. If you are unsure you can learn more about when to register a business out-of-state. You will often need a Certificate of Good Standing when you are registering in other states and require the following items as part of your application for Certificate of Authority or Certificate of Registration.File application of Certificate of Registration or Certificate of Authority to foreign qualify your company.Pay a fee application.Include a copy of your company’s Certificate of Formation or Incorporation.Provide a Certificate of Good Standing or Certified Copy from the state of formation.Certificate of Good StandingThis state-issued certificate shows that your company is authorized to conduct its business in that state and that you’ve met all their requirements. The Certificate of Good Standing shows that your company has:Made all its franchise tax paymentsFiled its annual reportMade all its state fee payments7. Get Federal and State Tax IDsWhen you register your LLC or corporation an EIN will need to be obtained. An EIN is a unique nine-digit number assigned by the IRS to business entities operating in the United States.You are required to have an EIN for the following purposes:To open a business bank accountApply for business licenses, permits, or business loansHire employeesFiling taxesForming an LLC, partnership, or corporationOnce an EIN is issued by the IRS, it is permanent and does not expire. It stays for the life of the business until ownership or structure changes, or other exceptional circumstances. Applying for an EIN is free and should never ask for payment. Learn how to apply for an EIN.8. Apply for Licenses and PermitsYour state and county websites will list the types of permits or licenses you need for your industry specific requirements.Federal licenses and permits - If your business operates in areas regulated by a federal agency, you’ll need a federal permit or license. Check with your federal agency if your business requires this and how to apply.State licenses and permits - The required business licenses depend on where you are and what your business does and the fees vary. Usually, states regulate more activities than the federal government.Local licenses and permits - The local licenses and permits depend on where you are based and your business type. Businesses that are run from home usually need permission to perform these activities in a residential zone.9. Open A Business Bank AccountThe main reason why it’s recommended to open a business bank account is that it alleviates problems that are caused by mixing your business and personal finances. It is important to separate your business and personal bank accounts to keep financial records clean.Overall, you’ll have a better way of managing budgets with a clear overview of your spending and expenses as you keep track of business expenses, simplify tax reporting, and protect your business.Steps to Opening a Business Bank AccountBegin by finding the right bank for your business, then choose the type of account that best suits your needs. Make sure you investigate all the attached fees and costs.You will be required to provide personal and business documentation such as Articles of Organization and EIN so make sure you have everything you need by calling the bank of choice. You can learn the 3 steps to opening a business bank account.Lastly, you will need a physical address to open your business bank account. Due to stricter financial regulation some banks will allow a home address, but a PO Box is not permitted. You can learn more about how to get a physical address to open U.S. business bank accounts.ConclusionIt is critical to be thorough throughout the process outlined in this 9 step guide on how to start a business. By ensuring that you are correctly setting up your business it will build a stronger foundation of success.Put in the work to conduct your market research, write a strong business plan, obtain necessary funding, and in the selection of your business location and structure.To register the business make sure you have all business documents as well as all the necessary licenses and permits for operations.Lastly, don’t forget to open a business bank account for your financial success.

1. Conduct a personal evaluation“Know yourself, and work in a job that caters to your strengths. This knowledge will make you happier.”– Sabrina ParsonsBegin by taking stock of yourself and your situation:Why do you want to start a business? Is it money, freedom and flexibility, to solve a problem, or some other reason?What are your skills?What industries do you know about?Do you want to provide a service or a product?What do you like to do?How much capital do you have to risk?Will it be a full-time or a part-time venture?Your answers to these types of questions will help you narrow your focus.This step is not supposed to dissuade you from starting your own business. Rather, it’s here to get you thinking and planning. In order to start a successful business, passion alone isn’t enough.You need to plan, set goals, and above all, know yourself. What are your strengths? What are your weaknesses? How will these affect day-to-day operations? You could conduct a SWOT analysis on yourself to figure this out.As you get started, your business will likely dominate your life so make sure that what you’re doing is stimulating and challenging, but not completely outside of your expertise. You’re going to be in it for the long-haul. Use what you learn from the SWOT analysis to think through what you want your life to be like, not just what you want from your business.Some good questions to ask yourself include:What would you do if money wasn’t an issue?Is money really important? Or rather, is making a lot of it really important? If it is, you’re probably going to be cutting out a number of options.What really matters to you?Do you have the support of your family, especially your immediate family? They may have to make sacrifices at the beginning, so it’s important to have them behind you.Who do you admire in business? Maybe there’s even someone in the industry you’d like to go into. Why do you admire them? What are their likable traits? What can you learn from them?Answering these questions (and many more) about yourself and your abilities isn’t necessarily going to ensure you’re successful, but it will get you thinking about your goals and about what motivates and inspires you. Use this time to make sure that you are matching the business you want to start to your personal aspirations.2. Analyze your industry“The more you know about your industry, the more advantage and protection you will have.”– Tim BerryOnce you decide on a business that fits your goals and lifestyle, evaluate your idea. Who will buy your product or service? Who will your competitors be? At this stage, you also need to figure out how much money you will need to get started.Your “personal evaluation” was as much a reality check as a prompt to get you thinking. The same thing applies when it comes to researching your business and the industry you’d like to go into.There are a number of ways you can do this, including performing general Google searches, speaking to people already working in your target industry, reading books by people from your industry, researching key people, reading relevant news sites and industry magazines and taking a class or two (if this is possible).If you don’t have time to perform the research or would like a second opinion, there are people you can go to for help, like government departments and your local SBDC.There are also a number of less traditional sources worth turning to:Advertising representatives for statistics and data on your competition or the industry in generalList brokers sell mailing or email lists based on demographic attributes. Like, if you think your target market is people making above a certain income in south Texas, a list broker may be able to tell you how many people fit that criteria, to give you a sense of how big your target market actually is.Industry suppliers (again to get a sense of demand and for market information)Students who will likely be happy to perform research for you at an affordable fee.3. Evaluate your target audienceValidate your business idea by creating a pitch page.To determine how attractive your prospective market really is (your own desires aside for the moment), we suggest doing a market analysis.It will guide your research as you think about:How urgently do people need the thing you’re selling or offering right now?What’s the market size? Are there already a lot of people paying for products or services similar to yours? Have you honed in on who exactly your target market is? Being specific will help you focus your marketing message and investment.How easy is it (and how much will it cost you) to acquire a customer? If you’re selling enterprise software, this may require a significantly larger investment than a coffee shop.How much money and effort will it cost to deliver the value you would like to be offering?How long will it take to get to market? A month? A year? Three years?How much up-front investment will you need before you can begin?Will your business continue to be relevant as time passes? A business that repairs iPhone X screens will only remain relevant so long as the iPhone X sticks around. If your business is only relevant for a specific period of time, you will also want to consider your future plans.If you like, you can even take things a step further and consider the consumer needs currently not being met by businesses in the industry. This is a good time to take a look at potential competitors. And remember, the presence of competitors is oftentimes a good sign! It means that the market for your product or service already exists, so you know that you have potential customers who are willing to spend money on your product or service.While you’ve got the time, learn as much as you can about your competitors, about what they provide to their customers, how they attract attention, and whether or not their customers are happy. If you can figure out what’s missing before you even get started, your job will be made that much easier when you do finally set up shop.4. Set up your businessRealistically, registering your business is the first step toward making it real. However, as with the personal evaluation step, take your time to get to know the pros and cons of different business entities.If at all possible, work with an attorney to iron out the details. This is not an area you want to get wrong. You will also need to get the proper business licenses and permits. Depending upon the business, there may be city, county, or state regulations as well. This is also the time to check into insurance and to find a good accountant.Types of business formations include:Sole proprietorshipPartnershipCorporationLimited Liability Company (LLC)Spend some time getting to know the pros and cons of each business formation. If you need help, we’ve got a full guide on Legal Entities, Licenses, and Permits.While incorporating can be expensive, it’s well worth the money. A corporation becomes a separate entity that is legally responsible for the business. If something goes wrong, you are less likely to be held personally liable.Other things you will need to do include deciding on a business name and researching availability for that name.5. Start the planning process“Our goals can only be reached through the vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”– Pablo PicassoIf you will be seeking outside financing, a business plan is a necessity. But, even if you are going to finance the venture yourself, a business plan will help you figure out how much money you will need to get started, what it will take to make your business profitable, what needs to get done when, and where you are headed.In the simplest terms, a business plan is a roadmap—something you will use to help you chart your progress and that will outline the things you need to do in order to reach your goals. Rather than thinking of a business plan as a hefty document that you’ll only use once (perhaps to obtain a loan from a bank), think of it as tool to manage how your business grows and achieves its goals.While you might use your business plan as part of your pitch to investors and banks, and to attract potential partners and board members, you will primarily use it to define your strategy, tactics, and specific activities for execution, including key milestones, deadlines and budgets, and cash flow.In fact, the business plan does not have to be a formal document at all if you don’t need to present your plan to outsiders. Instead, your plan can follow a Lean Planning process that involves creating a pitch, forecasting your key business numbers, outlining key milestones you hope to achieve, and regular progress checks where you review and revise your plan.If you aren’t presenting to investors, don’t think of this as a formal pitch presentation, but instead a high-level overview of who you are, the problem you are solving, your solution to the problem, your target market, and the key tactics you will use to achieve your goals.Even if you do not think you need a formal business plan, you should go through the planning process anyway. The process will help to uncover any holes or areas you have not thought through well enough. If you do need to write a formal business plan document, you should follow the outline below.The standard business plan includes nine parts:The Executive SummaryTarget MarketProducts and ServicesMarketing and Sales PlanMilestones and MetricsCompany OverviewManagement TeamFinancial PlanAppendixIf you would like detailed information on how to write a business plan to present to banks or funders, there are plenty of online resources, including our own comprehensive guide.You will also find hundreds of sample plans for specific industries on this very website. Use them at your leisure but be prepared to adapt them to suit your precise needs. No two businesses are the same!Types of business plans:If you are simply creating a business plan in order to stimulate a discussion with potential partners and associates, you may want to consider opting for a “startup plan,” also known as a feasibility plan. As your business grows you can flesh out the sections as you see fit.In contrast to the standard plan and the startup plan, is the operations or annual plan. This type of plan is used for internal purposes and primarily reflects the needs of the members of the company. This type of plan is not intended for banks and outside investors. You will use it either to plan your company’s growth or expansion or to set company-wide priorities.If the latter is true and you are using the plan in order to direct your internal strategy, you are creating a strategic plan, a type of plan that will include a high-level strategy, tactical foundations of the strategy, specific responsibilities, activities, deadlines and budgets, and a financial plan.6. Have a plan for fundingDepending on the size and goals of your venture, you may need to seek financing from an “angel” investor or from a venture capital firm. But, most small businesses begin with a loan, financing from credit cards, help from friends and family, and so on.Investment and lending options include:Venture capitalAngel investment (similar to venture capital)Commercial (banks)Small Business Administration (SBA) LoansAccounts receivable specialistsFriends and familyCredit cardsFor in-depth information on funding, see our complete guide on how to get your business funded, which includes detailed information on each of the above-mentioned options.Note: A beautifully fleshed-out business plan does not guarantee you will get funded. In fact, according to Guy Kawasaki, the business plan is one of the least influential factors when it comes to raising money.To stand a realistic chance of getting hold of the funds you need to get started, you’d be better off first focusing on your “pitch.” Not only will it be easier to fix because it contains less, but you’ll also get feedback on it—most investors don’t bother reading the full business plan, though they may still expect you to have it.It’s also much easier to turn a pitch into a business plan than it is to pare back your plan.7. Set up your spaceYour business plan has been laid out, the money is in the bank, and you’re ready to go. If your business is online and you won’t need a storefront, you’re probably looking at building your website and choosing a shopping cart solution. Maybe you’ll be able to work out of a home office or a co-working space instead of renting or buying office space. But if your business needs a dedicated brick and mortar location, there are many considerations.Finding a location. Negotiating leases. Buying inventory. Getting the phones installed. Having stationery printed. Hiring staff. Setting your prices. Throwing a grand opening party.Think through each of these steps carefully. Your business location will dictate the type of customer you attract, what types of promotions you can run, and how long it will take you to grow. While a great location won’t necessarily guarantee your success, a bad location can contribute to failure.As you’re thinking about where you want to set up shop (including the city and state), consider the following:Price: Can you realistically afford to be where you want to be? If not, or if you’re cutting it fine, keep looking.Visibility: Will people easily be able to find you? Will they see your promotions and offers? Are you in the center of town or further out? How will this affect you?Access to parking or public transportation: Can people easily find you from available parking options and transportation routes? If they have to look too hard, they may give up.Distribution of competitors: Are there many competitors close to you? If so, this may be a sign that the location is premium for the clientele you wish to attract. It may also mean you do no business. Consider carefully how you wish to approach this type of situation.Local, city, and state rules and regulations: Look into regulations, as areas may be more stringent than others. Ensure there are no restrictions that will limit your operations or that will act as barriers to your store.Your marketing will set the stage for the future of your store. It will set expectations, generate hype (if done well), bring business in from day one and ensure that people know where you are and what they can expect from you.Your store’s layout, design and placement of your products will decide not only the overall atmosphere of the store but what products people see and buy. Consider the areas you want well lit; how you will display products (if necessary); what various colors will make people feel, and how people will move through your store.There are reams of literature on why we buy what we do, all of it fascinating and much of it informative. Begin thinking about how you shop—this will get you to think more critically about your own store.Consider: placing products low on shelves will mean that people are unlikely to see them and therefore unlikely to buy them, whereas placing them at eye-level will mean they’re seen first and are therefore probably more likely to be purchased.Your choice of products and how you decide to price them will create a reputation. Rather than stock everything of a similar price range from one or two catalogs, consider only choosing those items that will create the feel you want to become known for.If you’re a service business, build your services in a similar manner, considering your different clientele and the value they will get from the different options you have on offer. If a very affordable package will cheapen your brand, consider excluding it. If a pricier option will limit your clientele too drastically, maybe cut back on some of the services included.8. Prepare for trial and errorWhether you’re starting your first or your third business, expect to make mistakes. This is natural and so long as you learn from them, also beneficial.If you do not make mistakes, you do not learn what to do less of and what to emphasize. Be open-minded and creative, adapt, look for opportunities, and above all, have fun!The great thing about owning your own business is that you get to decide what you want to do and where you’ll grow.