How to Start a Business: Your Complete Guide for 2024

One way to boost your income and make the most of your situation is to start a business. But it’s important to note that though the steps can seem simple, entrepreneurship is not an easy path. 

There may also be some important steps you’re not currently aware of that can make a critical difference in whether your small business succeeds.

To help you out on your new business venture, here’s our step-by-step guide to everything you need to know about starting a business.

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Start with a business idea

If you’re hoping to start a successful business, you’ve probably asked yourself what business you should start and come up with a number of ideas. You can also get inspiration from the hundreds of small business ideas, including online business ideas, out there already. 

Think about something that’s likely in demand, matches your skills, and is something you can do regularly — and every day. You should also consider whether it’s something you can reasonably learn how to make money with.

• 20 inspirational business ideas
• 35 small businesses you can start for $1,000
• 10 profitable business ideas

Consider checking out different business podcasts if you're interested in specific types of businesses, such as a real estate podcast for a real estate business idea.

Popular business ideas

• Pet waste removal
• Hot tub rental
• Blogging
• Etsy shop
• Charcuterie boards
• Pressure washing
• Mobile detailing
• Flipping houses

Research your market

Just because a business idea exists doesn’t mean it’s going to succeed or people want that product or service. You might think you have a great ecommerce idea, but it's only a great idea if people actually buy your product. 

One way to test out demand is to conduct some market research. There are two main types of market research: Primary and secondary.

Start with secondary research

Secondary research is taken from outside resources, such as analyses conducted by reputable government entities and trade and professional organizations.

Use secondary research as a way to figure out demographic trends and get a feel for how certain industries are going. You can also figure out what to expect and see how many businesses operate in your niche.

For more local secondary research, check with your state’s business oversight department or even a local chamber of commerce. With the help of secondary research, you can get the lay of the land and a feel for your target audience.

Use primary research to narrow down your idea

Primary research is about collecting your own data from the market. This can help you narrow down your business idea and figure out where there is a viable business opportunity to concentrate your efforts.

Examples of primary research include:

• Questionnaires and surveys
• In-depth interviews
• Focus groups

When my business partners and I were launching our latest venture, we used focus groups and surveys to figure out what people were looking for and to tweak our ideas in a way that would make our business more attractive.

Write a business plan

Writing a business plan can help you lay out everything you need to succeed and really understand the kind of business you want to operate.

Getting it all down helps you identify things you missed and provides a roadmap for taking step-by-step action. A business plan also gives you an overview of what needs to be accomplished and the order you should follow to make it happen.

At minimum, you business plan should include the following:

• Your company’s purpose, including the customer base and your ability to solve their problems.
  
• Information about the products and services you plan to provide. You should also detail the type of research you’ve done, as well as any intellectual property you own.
• An organizational chart detailing your business legal structure — such as LLC, S Corp, or C Corporation — that you plan to adopt.
• Your strategy for letting customers know who you are and how you’ll show them that you’re the ideal choice.
• Any costs as well as how you’ll price your products and services and how much profit you can reasonably expect.

On top of providing you with something practical to follow, a business plan can also help small business owners get funding. Many lenders and small business development centers ask for a business plan before risking resources.

• How to write a business plan

Fund your business

There are several different options available when you want to fund your business. Sorting through this means establishing the financial plan to go with your business plan. Knowing how much money you need and where your startup money will come from is essential to starting a business.

Self-funding

If you have money saved up, you can fund your business yourself. There are plenty of small businesses you can start for $1,000 or less.

For example, my freelance writing business only required the startup costs of a laptop and internet access. This was something I could pay for out of my own pocket. 

Small business loan

Depending on your business model, you might be able to get a Small Business Administration (SBA) loan, guaranteed by the government. However, in many cases, you need to have a detailed business plan and might even need to have a proof of concept before moving forward.

You can also look at lending marketplaces like Fundera to help you shop for small business loans. Many of these platforms can underwrite and fund loans faster than traditional banks and credit unions, often offering decisions and funding within a few days. 

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Business credit cards

When launching our own business venture, my partners and I got a small business credit card with a 0% APR offer on purchases. This allowed us to avoid paying interest for a set period of time while we got our business up and running. We put our startup costs on the credit card and just made the minimum payment until we began turning a profit.

A number of business credit cards offer low-interest periods like this. Be aware, though, that many small business card applications require you to make a personal guarantee. That means your personal assets might be at risk if your business fails.

Small business grants

Depending on where you’re located, what you provide, and other factors, you might be eligible for small business grants. Check with the SBA and local organizations to see whether you qualify for a grant that can provide you with free money to give you a good start.

Crowdfunding

An increasingly popular way to find the necessary business startup funds is crowdfunding. With crowdfunding, you ask your network to contribute to the cause. Funders may provide money in return for perks, such as one of the first editions of your product.

It’s also possible to do equity crowdfunding, in which you provide a share of your business in return for upfront capital that could improve your cash flow. 

Investors

Reputable investors, including angel investors, could help get your business up and running. If you're going to meet with potential investors, make sure you have a business plan ready and are prepared to research the investor and their experience to know if they're worth doing business with. Then it's on to working out the terms of your agreement and using invested funds to start and grow your business.

• How to get a loan
• How to establish business credit
• How to apply for a small business card
• Best credit cards for work expenses
• Business credit cards for startups
• Best credit cards for LLCs
• Best business credit cards for gas

Create a marketing plan

You won’t get any customers if you don’t have a marketing plan. This plan outlines your way of connecting with your target market and convincing them to buy your product or service. Even if you don’t have a lot of money to spend, a good marketing strategy can go a long way.

Some considerations when creating a marketing plan include:

• Social media marketing: You have the potential to get more bang for your buck on social media apps, especially if you use your networks, including LinkedIn, to share and get more eyeballs.
• Online advertising: Using Google Ads and Facebook Ads can help you move forward and can cost less than traditional advertising.
  
• Content marketing: Another approach is to make sure you have useful content on your business website. This can include templates, tutorials, how-tos, and other information. The idea is to use SEO to rank higher, get more people to see your content, and convert them to sales. There are easy-to-use website builders available if you're not sure how to create a website.
• Email marketing: You can send out emails in an attempt to get people to engage with your brand and then sell them your product or service.

When creating a marketing plan, make sure you map out where your dollars are most likely to get your best return on investment. Consider where your potential customers are most likely to get information and create a marketing plan based on putting your dollars into efforts more likely to reach people ready to buy.

Choose your business structure

You will need to figure out what type of business entity is most likely to provide you with the greatest benefit. Many small businesses and entrepreneurs start out as sole proprietorships, LLCs, or S Corps.

• A guide for choosing the proper business structure

Sole proprietorship

A sole proprietorship is the simplest and easiest business structure to set up. Essentially, it's automatically created the day you start doing business. For legal and tax purposes the business and the business owner are considered the same in a sole proprietorship. 

While the advantage of a sole proprietorship is that you have complete control and say over your business, you assume all of the risks of your business with no liability protection.    

As a freelancer starting out, I just did business as a sole proprietorship since it was simple and I didn’t need extra paperwork. As my business grew, I became a limited liability company (LLC) to limit some of the personal liability associated with my business.

If you want to structure your business as a sole proprietor but use a different name than your own, then you may choose to operate as a DBA, which stands for “doing business as.” Some states may require you to register this business name, so you’ll want to look into that.

• Sole proprietorship advantages

LLC

A limited liability company (LLC) protects the business owner from personal liability. Although an LLC is different from a corporation, it offers many of the same liability protections.

An LLC separates the finances of your business from your personal finances. That means that if a creditor goes after your business assets, your personal assets are safe. 

Opening an LLC usually requires some paperwork, but companies like ZenBusiness offer business formation services, including expedited filing, to help you run your business and stay compliant with your state’s requirements. 

• Benefits of an LLC

Corporation

A corporation is a separate legal entity from any of its owners or equity holders. While equity holders are entitled to a portion of the business' profits and assets, they're protected from being personally liable for its debts and obligations.

Equity holders will elect a board of directors to oversee the corporation's operations. The board of directors is then in charge of managing the corporation's day-to-day operations.

The two common types of corporations are C corporations and S corporations:

• C corporations: C corporations are taxed separately from their equity holders. The result is that both the corporation and the equity holders pay taxes on income, leading to double taxation.
• S corporations: S corporations don’t have to pay income tax. Their corporate tax requirements instead pass through to equity holders who have to pay income tax on their dividends. As a result, S corporations aren’t subject to double taxation.

Choose your business name

At some point, you need to come up with a business name. One of the most important things you can do, however, is to register your business. In most cases, this is done at the state government level. In some cases, you might have to get your business licensed at the local government level as well.

Some things to consider when choosing a name for your business include:

• Make it simple so people can remember it
• Avoid hard-to-spell names
• Keep it short so it’s easy to put on printed materials
• Do a website search and secure the domain before registering the name with the state
• Consider something that describes what you do

Apply for EIN or Tax ID

Although you might be able to get away with using your Social Security number for a while, a federal tax number, also called an EIN (Employer Identification Number), can help ensure that you pay your business taxes correctly.

You may also need an EIN if you want to take advantage of business funding programs or open a business bank account. You can easily apply an EIN on the IRS website.

• Does your business need an EIN?
  
• How do I find my business tax ID number (EIN)?
• Online EIN application form (IRS)
  

Obtain required licenses and permits

Depending on your business, you may need to apply for business licenses or permits. For example, if you own a restaurant, you'll need to ensure that after you hire employees, they have the appropriate food handlers permits. 

Find out what’s required of your business in your state and then move forward with getting the right items.

• Business licenses 101

Choose an accounting system

As a business owner, you'll need a system to help you organize your taxes and stay on top of your payroll, invoicing, and other important functions. Having your books in order is important when it comes time to file your taxes and helping you get funding in the future.

You need to decide whether you’ll handle the finances yourself or hire it out. Business accounting software like QuickBooks and Xero can help you stay on top of things. 

• Bookkeeping vs. accounting
  
• How to file taxes
• Best tax software [2024]
  

Get the right insurance coverage

Don’t forget about getting the right insurance coverage for your needs. What types of business insurance you need varies depending on the type of business you have.

For example, if you own a physical business location, you probably need a property insurance policy. And in some lines of work, you may need to be covered by liability insurance.

If you plan to hire workers, you might also need workers’ compensation insurance. This insurance is often required by the state and provides financial protection for employees who are hurt on the job.

Open a business bank account

Opening a business bank account will help keep your business finances separate from your personal finances. This makes things easier at tax time because you have the records you need related to business income and expenses.

Most banks and credit unions offer business bank accounts. An increasing number of online providers also offer business savings and/or checking accounts.

Look for an account with low (or no) fees and check to see whether it offers a promotion or introductory credit. Don't forget that, if you get payment processing services through your bank, you might have to pay batch fees and other fees.

• How to open a business bank account

Pick a business location

In some cases, you might need a brick-and-mortar shop to offer your services. In other cases, you can just have an online store. Think about what kinds of costs you’ll have and whether it would be better for you to get a physical location or if you just need web hosting and a domain name to sell your product online.

For a physical location, consider whether you plan to rely on foot traffic, and pay attention to the costs associated with the building. You also need to factor in the needs of your business, and how much modification needs to be done to the space to make it viable. 

Even if you manage your business mostly online, consider if it makes sense to have some sort of physical location, whether it’s an office or coworking space, or just occasionally setting up a booth at the local farmer’s market.

• Best states to open a business

Hire help

There are times it makes sense to hire someone to help out. For example, you might want a virtual assistant to manage your social media posts for you. If you’re just starting out, you might get help from friends and family. This can help you get the help you need at a discount until you can afford more.

Realize that when you hire an employee, you need to be aware of tax and state requirements for hiring. Contractors, on the other hand, come with fewer hassles. However, you can’t tell a contractor when and how to work, and you might not have as much control over their work product.

At some point, as a business owner, you won’t be able to do everything, so it can make sense to hire someone who can do the job better, freeing you up to focus on more pressing issues.

Open up for business!

Now it’s time to start doing business. From this point forward you’ll need to keep track of stats like visitors to your store, as well as sales. Watch your inventory and be sure to stay on top of that. If you stock products, you need to ensure you have items available when needed. This is true whether you operate online or offline.

Don’t forget to set goals for your business, and revisit them to make sure they’re realistic. Additionally, once you reach your business goals, you can move forward with new objectives.

Next steps

It’s important to continue learning and growing as you move forward with your business. The landscape is always changing and just because you know how to start a business doesn’t mean it will always be successful.

Here are some things to keep doing if your business is going to keep growing:

Keep marketing

You need to constantly market your business if you want long-term success. Continue getting your brand out there and keep advertising where it makes sense. Track your return on investment and put more money into advertising where it works.

Keep assessing and restrategizing your goals

Tweak the metrics you use to measure success. You want to make sure you’re measuring the right things and setting the right goals. Continually evaluate that information and then strategize as needed.

Keep learning

You can’t always know everything. Even while you run your business, keep learning about your service or product, as well as the industry. Educate yourself on best business practices and the latest trends to keep moving forward.

How to get help starting a business

Starting a business can be complicated, but you don’t have to go it alone. There are a lot of great places to go for help with your business.

You can find a lot of information from the Small Business Administration (SBA), as well as regional small business development centers. Also, consider networking with local professionals and others in your industry. You can check with the Chamber of Commerce to find local resources and networking opportunities.

If you’re worried about tax planning, you may also consider talking with a tax preparation professional in your area who has knowledge specifically about filing taxes for businesses.

• Small Business Administration (SBA)
• U.S. Chamber of Commerce
• Tax Planning for Beginners
  

FAQs

Bottom line

Starting your own business can be one of the best side hustles to earn extra income, but it could also build into a full-time job if you want it to and you make smart decisions. You might be surprised at how you can succeed in the long run.

Approach the business in a professional manner, take the time to research, and then be realistic about your results. 

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