A Step-by-Step Guide to Starting a Business
Starting a business remains one of the most challenging and rewarding things I’ve ever done. Even in a world reshaped by COVID-19, you may be wondering how to take that journey to becoming a small business owner yourself.
In this post, we’ll walk through how to start a small business in just 11 steps.
This post will not provide legal recommendations or financial advice. That’s just not our area of expertise; that said, The Lane Collective can point you in the right direction when it comes to experts or software.
In the next few hundred words, you’ll get a basic overview of how to start a small business. If you’d like a deeper dive, you’d probably like this in-depth How to Start a Business Workbook.
One more note, before we jump in: if you have the inner urge to be your own boss, or the drive to bring something new into the business world, go for it.
There are lots of people out there, like me and the rest of the consultants at TLC, who are waiting in the wings to help you. 💸
1. Get Clear on Your Business
Before you come up with a business name, or a formal business plan, it’s important to get clear on what your business will do.
In my experience, it’s easy to get hung up branding items, like words, tag lines, colors, and logos. Don’t start thinking about that yet. Instead, start by thinking about the fundamentals of your business.
Here are a few questions to spark your thinking:
What will you sell?
How will you sell it?
How do you want your customers to feel?
How do you want to feel about your business?
If you’re planning to offer mostly physical products, are there any services you might want to consider adding? If you’re planning to offer mostly services, are you interested in selling physical products, too?
Can you explain your business idea in two sentences?
The How to Start a Business Workbook provides some space for you to answer important questions. You can download it for free here!
Otherwise, just open up your notebook and begin writing. There’s no need to write in complete sentences. You just want to get ideas out on paper, and give yourself room to think big.
2. Trial-Run Your Concept
Test your business idea before it actually needs to earn you money by asking a few friends and acquaintances their opinion.
Seem scary? Good. Starting a business will get you out of your comfort zone and keep you there.
The number one reason startups fail is a lack of market need. The number one reason that small businesses fail is a lack of cash flow. Both boil down to the same thing: people don’t want (or need) what’s being offered.
Your goal in this trial run is to ensure that the market wants at least the concept of what you’re planning on offering.
Try to get feedback on the business idea from people who would potentially be customers in the future. You wouldn’t ask a pre-teen about their opinion on a new wine bar concept. Don’t ask someone who will never buy your product or service for their feedback; if you must, take their input with a big grain of salt.
Just because someone is good at business doesn’t mean they’re good at your business.
Pro Tip: If you’re already uncomfortable asking people about their opinion before you’ve even launched, then getting comfortable being uncomfortable is a muscle you’ll need to stretch. I say this (lovingly) as someone who can relate. In the past, I didn’t want to show anyone my work until it was absolutely perfect. Being a business owner has broken that habit, but it takes some time.
3. Determine How You’ll Make Money
This simple question is the stumbling block for many businesses: how will you make money?
As the saying goes, there are a lot of ways to skin that cat. You could sell products and/or services, and you can sell online, in-person, or both. You could sell your own products, other peoples’, or a combination of both. You could offer a subscription service or a membership program. You could offer payment plans. You could earn money through referral networks, or affiliate programs, or advertising. You could get paid to speak, or to mentor, or to coach, or to consult.
There are so many options available to you, and you owe it to yourself to spend some time thinking through them.
One key learning of the coronavirus pandemic is that businesses can reduce risk by taking a flexible, agile approach to selling. Small businesses with an online presence were much better positioned at the beginning of the crisis than those without.
In the workbook, there are a few worksheets to help guide your thinking. Please note, this exercise isn’t advocating that you create a complete business plan, in most cases.
A business plan is mostly helpful if you’re going to seek a loan or funding; otherwise, it’s probably sufficient to have all of your thoughts and plans documented in a format that works for you. That said, feel free to create a business plan if you want to or feel compelled to!
4. Understand Your Potential Customers
A small business doesn’t exist only to sell products or services; it exists to provide value to real people. That’s why it’s important to begin thinking about your customers early on, and do your best to understand them.
Your goal in this step is to understand who your offering is for, and how exactly it helps them. Practically speaking, you’re looking to create the foundation of your ideal customer profile.
[Read Also: What is an Ideal Customer Profile?]
The phrases “customer avatar,” “ideal buyer persona,” “ideal customer profile,” etc. are all interchangeable and refer to the same thing: an in-depth description of your perfect customer.
You’ll notice that there’s no branding yet, and there’s a good reason for that!
With an understanding of your customers, you can begin to create branding that will resonate. Branding and rebranding can cost thousands of dollars. You dodge an expensive bullet when you create a customer-focused brand at the outset of your business.
Remember, if you take care of your customers, everything else will take care of itself.
5. Register Your Business
The next step is to register your business. To do that, you’ll need a name.
Use the clear sense of your product and customer to think of a few ideas. Why a few? Because you may find that a name you really like is already registered in your state.
Registering your business is a bit of a technical process, and it’s different in every state. You can hire a lawyer to help, or a business registration service like LegalZoom. I don’t really recommend doing it on your own, because mistakes can be costly.
Expect that registering your company will cost at least a few hundred dollars, and up to a few thousand.
6. Develop Your Branding
Now that you’ve got a registered business name, you’re ready to start thinking about your branding. This is a really fun part of the process!
If you already have a clear sense for how you want your brand to look and feel, the biggest question to answer is whether you’re going to D.I.Y. your branding or hire an expert.
Others may find the process of branding completely overwhelming. If that sounds like you, just create a Pinterest board and start pinning logos, advertisements, and images that you like to it. Certain patterns will emerge. You can use these patterns to create a mood board that will provide direction and guidance.
At a minimum, your brand will need:
A logo
A favicon (the tiny icon in the browser tab)
Fonts
Vision
Mission
Values
Other items to consider are: tagline, jingle, logomark, typemark, visual guidelines.
To learn more about this unique process, get on the pre-sale list for our D.I.Y. Guide to Branding. Even if you decide to hire an expert, this eBook will help you learn the lingo and understand how to think about branding.
7. Consider Your Marketing
Now is the time to start planning how you’ll attract and engage your audience. After all, it’s not a business unless people are buying! To buy, they need to know that you exist.
That’s where marketing comes in.
Marketing is nothing more or less than attracting and engaging with potential customers.
The cardinal rule of marketing is that every action, strategy, and message should be created with your ideal buyer in mind.
Your goal is similarly clear: lead generation.
Remember that the goal is always lead generation, and you'll be in the growth-focused mindset from the start.
Want some help with marketing your startup or small business? That’s exactly what The Lane Collective is here for. Schedule a free intro call here.
The biggest mistake you can make in your marketing early on is trying to do everything at once. It’s not possible, and it dilutes your efforts. With that in mind, the worksheet is designed to help you choose one or two marketing strategies to focus on right now, in addition to creating a website, which we will cover next.
Here is a complete guide to building a marketing program from scratch. It’s 20+ pages, and distills a lot of the big ideas that you’ll need to be successful at marketing.
Like everything else, you can choose to hire an expert to help out with your marketing.
8. Build Your Public Presence
You’re now ready to put yourself and your business out there! It’s time to start building your public presence - or at least, the foundations of it.
Every business in 2020 needs a digital marketing strategy. At a minimum, you will need:
A website
A basic social media strategy
A local marketing approach
You can build your audience through advertising, media relations, and PR, in addition to more traditional content marketing strategies. However, to achieve any of them, you’ll need the digital basics outlined above.
9. Create Your Product and Store
By this point, you’re ready to begin creating your product, if you haven’t already started. The advice here is very general: start small.
This is particularly true if you’re selling a physical item. It’s better to sell out than to have too much product.
You’re also ready to create the store through which you’ll sell your products or services. Of course, any company in 2020 should seriously consider having an online store, if only to sell gift cards.
As with everything else, keep your ideal customer in mind. This is absolutely essential, particularly in this stage.
P.S. Need help choosing the right tools for building your business? Here is our complete list of recommendations.
10. Execute on Your Plans
Now it’s time to begin executing on your marketing and sales plans, and get the word out about your new business.
Remember, the theory of inertia applies even in business. You have no momentum when you first start your business, so the beginning is usually the hardest part for your growth.
Finally, opinions are good, but data is better. Depending on the marketing strategies you’ve chosen, make sure to also identify a few relevant KPIs to monitor.
For more information on how to define the right marketing strategies for you, and how to execute on them, check out the Beginner’s Guide to Marketing.
11. Keep the Faith
Building a small business is challenging. You will need to be consistent, to stay hopeful, and to keep working at getting better each and every day. It’s totally normal to have down days, to feel doubtful, to wonder if you bit off a little more than you could chew.
Through those feelings, keep the faith! You’re bringing something new and needed into the market. It will be fulfilling and it will give you freedom - but no one promised it would be easy.
Want a deeper dive, including helpful worksheets? Check out our How to Start a Business Workbook!
