Come up with your business idea

 

The first step to starting a small business is coming up with a winning business idea. Ideally, you’ll develop a business venture that interests you and meets a need in the market.

A great way to do this is by identifying a problem that frustrates you. Is there an issue that you continually encounter that you wish someone would solve? That could be your next business venture.

But, you don’t necessarily have to reinvent the wheel. Take a look at the businesses that are already out there, and ask yourself how you could improve upon what they’re already doing. Are there any gaps in the marketplace that you could fill?

Decide what you’re going to sell

A lot goes into starting a business, but the first place to start is to figure out what you plan to sell. Your success as a business depends on your ability to sell products or services to your customers.

Come up with a list of ideas for products or services you can offer. From there, you should consider the following questions:

• Is there a demand for this product or service?
• How will this benefit my customers?
• Would I purchase this product or service?
• What could I reasonably charge?
• Is there enough of a demand for me to make a profit?

[Read more: The Complete Guide to Selling Online]

Write a business plan

Next, you’ll write a business plan. A business plan will help you gain clarity as you’re getting started, and it will help tremendously if you decide to apply for small business financing in the future.

According to the SBA, most business plans fall under the category of a traditional business or a lean startup. You’ll go into great detail in a traditional business plan. These plans can be several dozen pages long, and are required by most lenders and investors.

In comparison, a lean startup business plan focuses on a high-level overview of the business. You’ll summarize the most important aspects of your business, and it will only be about a page long. This will be much faster to create, but if you seek out funding, investors may ask for more information.

[Read more: Startup 2021: Business Plan Financials]

It can help to partner with more established businesses to get your name out there and grow more quickly.

Decide on your business’s legal structure

Choosing the correct legal structure is an important part of running your business. If you want to get started quickly and with as little hassle as possible, a sole proprietorship may be right for you.

With this type of business model, you don't have a partner or executive board to answer to, so you’re in complete control of all the decisions. Keep in mind, though, there is no legal separation between you and the business; you’re responsible for any debts and lawsuits that the business incurs.

In contrast, a limited liability company (LLC) provides more flexibility and creates a legal separation between you and the business; however, there is more paperwork to fill out, and you’ll have to file your business with the state.