How to Start a Small Business in 10 Steps

A sole proprietor working from home is going to have very different startup costs than a Silicon Valley startup flush with venture capital funds. But it doesn’t matter if you have $1,000 or $1 million to launch your small business — you’ll need to have a budget.

Are you moving the clutter out of your garage to make room for a desk? Or are you going to hire an architect to remodel a warehouse space in a trendy neighbourhood? Obviously, both businesses are going to have wildly different expenses.

Think about your budget and what you can afford to get started. And it’s good to assume that unexpected expenses will pop up along the way — especially in your first year of business.

If you don’t do basic market research before you launch your business, you may be down for the count before you even get started. Ask neighbours, friends, and even your barista if they would be interested in your product or service — and ask how much they’d be willing to pay for it.

Conduct competitor research, local and global searches, and even offer surveys to consumers to see what the need versus want ratio is.

A business plan is your roadmap; it helps guide you as you start and grow your company. If you need capital to get started, most investors will want to review a business plan before they commit to any financing.

To organise your ideas, download and fill out a business plan template. A well-written business plan provides clarity, confirms the math, and helps you establish goals so your business has the best chance of success.

Finding the perfect brand name is a vital step in launching a new business. But hiring a professional naming company doesn’t come cheap — it can cost as much as $100,000, according to Fast Company.

If that’s outside your budget, there are countless AI-powered business name generators available online, and Fiverr has entrepreneurs who will help brainstorm business names for three figures or less.

Take a look at the taxes, zoning laws, and regulations in your location. You may find that operating your business in a different location could offer financial advantages. Review the fees, costs, and tax benefits of each state to see which location makes the most sense for your business. A strategic move may put you ahead of the game before you even open the doors.

Startup costs discourage many would-be entrepreneurs, but the reality is that many successful businesses got started with little more than a vision, discipline, and hard work. However, if you really need cash for that newly opened business bank account, here are four ways of getting that money:

• Self-funding: If you have the means, you may use your own earnings to kickstart your business or see out financial counsel to work it into your budget.
• Outside investors: For a stake in your company, relatives or venture capitalists may be willing to invest in your business.
• Small business loans: If you want to keep full ownership of your business, a small business loan may be the way to go.
• Crowdfunding: If you’re feeling creative and confident, try sites such as Kickstarter or GoFundMe to generate capital.

Register your business in the state where it was formed — and make sure that you’re set up to pay state income and unemployment tax. Review whether your local municipality requires filing for a license or permit to operate your business.

To satisfy Uncle Sam, apply for an EIN from the IRS. Confirm that no one else is using your business name by contacting your state filing office or online database. Some business structures require using a doing business as (DBA) name, and you may be required to open a business bank account.

Once you have a terrific name for your company locked down, you’ll want to create an online presence for your business. Be consistent on your social media channels, ideally creating accounts on the channels — meeting them online where they are.

Develop a website that’s intuitive and filled with all the information your customers need. Your marketing may also include advertising campaigns and public relations.

To enhance your marketing efforts and grow your small business, try customer relationship management (CRM) for Small Business. This will be your solution for storing and managing prospect and customer information such as contact information, accounts, leads, and sales opportunities — all in one single source of truth.

With Salesforce’s Starter Suite, you can start in minutes and easily manage your marketing, sales, and customer service as your business scales.

Congratulations: You’ve done all the hard work and you’re ready to introduce your product to the world. Make sure to announce your launch on social media — and consider throwing a media-friendly bash to celebrate.

A great business name should succinctly identify your company and its audience. Brainstorm and get feedback from friends, family, and potential customers. And before you fall in love with your new company name, make sure that an established business in your industry isn’t already using that name.

Choosing where to conduct business is one of the most important decisions you can make for your small business. While staying close to home may be your first instinct, a change of venue may prove to be financially advantageous.

For tax purposes and protection of personal assets, you need to choose a business structure that offers the right balance of legal protections and benefits. Common business structures include sole proprietorship, partnership, limited liability company (LLC), corporation, and cooperative.

If you want personal liability protection, legal protection, and tax benefits for your company, you’ll need to register your business with state and local governments.

Your Employer Identification Number (EIN) works like a personal Social Security number, but for your business. You need an EIN to pay state and federal taxes for your company.

Whether your business needs to apply — and pay for — licenses and permits depends on your business activities, location, and government rules. Review regulations from city, state, and federal agencies.

Opening up a bank account exclusively for business use will help keep your personal finances separate, making life easier at tax time. There are several banks that will allow you to open a business checking account with a zero balance, but traditionally banks will require an opening deposit of anywhere from $1,000 to $25,000.

Even if you open a business checking account with a zero balance, you’re going to want to have some funds to cover basic operating expenses. The SBA offers guidance on obtaining funding for your small business, including loans, grants, and investors.

Starting a new business may feel like a gamble, but business insurance will help you cover your bet. The right insurance policy will help protect you against accidents, natural disasters, and lawsuits.

You should also consider:

A CRM platform keeps your customer data organised and provides the foundation to build connected customer experiences (that can be made even better through artificial intelligence). Starting with a suite of sales, service, marketing, and commerce tools is easy.

While it is possible to keep track of your financial records on a traditional paper ledger, modern invoice and billing software makes the process much, much easier.

A well-designed logo can make or break a business. The Nike “swoosh” was created by a graphic design student — and the $35 Nike initially spent paid for itself many times over.

Many small businesses exist with just a presence on social media, but having a professionally designed website adds legitimacy to your business.

Like graphic design, marketing expenses are costs that many small business owners initially want to avoid. But strategically investing in a marketing campaign can be a boon for a small business that wants to make noise in a crowded marketplace.

Once your business grows to a certain size, it’s time to create a human resources (HR) department — or, at least, to hire an HR professional. This professional can focus on things such as labor law compliance, employee recruitment, employee engagement and development, and compensation and benefits management while you manage your business.

For most small businesses starting out, hiring an assistant to perform administrative and clerical duties is something of a luxury. If your budget is tight, consider a virtual assistant.

If you have a unique idea for a small business, great. But some of the best small business ideas build on your strengths and experience. What do you love to do? What lights you up when you are helping the community? Do you have a pull to do something more?

Starting a small business is no guarantee of success. Approximately 80% of small businesses survive their first year, according to the Bureau of Labor Statistics. The survival rate decreases to 50% after five years and 30% after 10 years.

Not all big companies started with millions of dollars in venture capital. Some of America’s biggest brand names had far more modest beginnings. Apple famously got started in a Silicon Valley garage, while Mattel was building dollhouse furniture from picture frame scraps in its early days.

Before setting up shop in New York or California, consider launching your small business in North Dakota, Indiana, Arkansas, South Dakota, or North Carolina. These states offer the best conditions to start a business, according to Forbes Advisor.

(Almost) everyone knows that you can deduct entertainment and travel expenses as a small business owner. But you can also deduct software subscriptions, office furniture, and interest on small business loans, according to NerdWallet.

Taking the leap to start your own small business is just the first step on your entrepreneurial path. But you’re in good company. Nearly half of all U.S. employees are employed by a small business — and more than 80% of those small businesses are solo ventures, according to Forbes Advisor. There’s no better time than the present to start turning your dreams into reality.

Want to grow your new small business? Sign up for a Salesforce free trial.