Right now, someone in the world with less experience, less education, and fewer resources than you is successfully doing what you would love to be doing–starting a business.
If that’s an all-too-familiar feeling, then it might be time to consider starting your own business. But . . . therein lies the rub. How does one start a business? And, maybe most importantly, how does he or she know that it's time to start a business?
The First Step in Starting a Business: Know Thyself
Before you sign on the dotted line, let’s talk about the flip side of owning a business. While you set your own hours, they will likely need to be long hours. You can work from home, but remember that when you do, you are “always at work.” You may need to convince others to invest in your business, and you will certainly need to convince others why your products or services are better than your competitors. You’ll have to get comfortable with rejection.
You may have more time around your family, but less time to actually spend with them. There’s no unemployment waiting if your business fails or recompense if your clients can’t pay. You’ll possibly have to learn to be an expert on all aspects of your business–public relations, human resources, finance, production, logistics, and so on.
Having said all that, there is a lot to love about owning your own business. There’s no limit to what you can get paid per year. There’s no one above you on the organizational chart. You can have strange work hours. You can work from home. You can work from home in your underwear (if that’s your thing). You can take Fridays off. Or Wednesdays. You can schedule a dentist appointment for Tuesday, chicken out and move it to Thursday, and you won’t need to ask anyone if that’s okay. You can hire whomever you want to work for you. In all, it’s a pretty cool thing to do.
So is there a way to know if you have what it takes to run your own business? Well, owning a business is directly correlated to how hard you’re willing to work and how badly you want to succeed. Ninety-six percent of running a business is based in fact. I have had much success teaching these facts for decades and to millions of business owners. If you can embrace hard work and have a relentless desire to do whatever needs to be done for the business to work, you are already most of the way there. The rest of the answers are already out there; you just have to find them.
By the way . . . if you’re reading this, you’re probably of the right mindset and ilk already.
The Second Step in Starting a Business: Choose a Card. Any Card.
So what kind of business are you going to start? And yes, that is truly the million-dollar question. There’s a good chance that you’re going to do something for which you already have a passion or for which you already have experience and education. It’s not mandatory, not at all, but it does help.
One good way to approach this phase of starting a business is to reverse engineer the vision that you have for what you define as a successful business. If your vision is that you have more personal free time, eliminate the long commute to your current job, and make about the same amount of money that you did in employment with someone else, your options for a business are plentiful. You can choose a business that really speaks to what it is that you love to do. For instance, starting a catering company, becoming an author, starting a computer repair shop, or even turning that plot of land you inherited into a mini-golf course and ice cream parlor are just some of the ways that you can maintain your income while running a company for yourself. You can follow a dream that you’ve had for years and throw your energy into that which you are most passionate about.
If your vision of success is becoming a millionaire by thirty and managing hundreds of people someday while enjoying the most-successful IPO ever . . . well, that type of business model will require a significant amount of research and will be almost totally driven by market opportunities instead of personal passions. If your passions and the market conditions to allow for this level of success interact, do not hesitate to start that business immediately!
In the end, most people choose something between sustaining their current income and taking over the business world. They want to do something they are knowledgeable and/or passionate about, but they certainly want the ceiling to be higher than that which they have at their current employer. There’s a good chance this is where you are, too.
Once you have an idea about your business, you’ll want to talk to friends and family you can trust. Just run the idea past them and see how they react. Sleep on things for a day or two. Put yourself into a devil’s advocate mindset, and try to shoot holes in your idea.
Where could things go wrong? What happens if they do? Is your idea something that can pivot, or is it an all-or-nothing concept? Are the people around you ready to support your new business and the work it will take? See how you can work these ideas out alone initially, and then . . . take to the Google machine and start your research.
The Third Step in Starting a Business: Knowledge is Power
There’s a good chance that you’ve been thinking about running your own business for months, years, or even decades. Maybe you want the freedom your own business can bring. Maybe you like the excitement of not knowing what strange and wonderful things are just around the corner. Maybe you have an idea that’s just too good to not act on. Or maybe you don't have any idea of what kind of business you want to start!
Don’t worry, you’re in the right place.
A surprising number of businesses get their start almost by accident. Some people have an idea that no one else has ever had before. Other people work for another company and learn all about an industry before realizing there’s a better way to do something, and they start a company based on that idea. Others yet are simply tired of having to commute two hours each way to work and want something that will let them stay home with their children.
One thing that needs to happen before starting a business is that you need to do some major digging into already-existing businesses that are doing what you want to do. I know — it might seem much easier to start the business without being intimidated or influenced by the competition. In the Han Solo “Never tell me the odds” style of starting a business . . . well, the odds are quite stacked against that approach, if you couldn’t guess.
As scary as it can be, go and look. See what other people are doing. You’ll probably find that your original idea isn’t so original, but that’s okay. It’s still yours, and if you can do it better than others in even some ways, you have a viable business model.
Regardless of what type of business you would like to start or where you’d like to land in the entrepreneurial world, you’re going to have to research and learn about what’s out there–in terms of both competition and opportunity. You will want to make sure that you are not getting into an overcrowded market with a loyal customer base without being able to offer something unique to that market. You wouldn’t want to open up a McDonald’s next to another McDonald’s, for example, but there could be value in opening up a Burger King or Taco Bell.
How to do this new business research is almost an art form. There are many roads to travel on this part of the journey, from online research to actual interviews in the form of surveys and focus groups (direct research). You’ll want to explore social media. Maybe call similar business owners in various parts of the country and ask them what it’s like (do this if you won’t be a direct competitor). As you go, you’ll want to answer these questions:
- Is there a demand for your potential business?
- If there is, how big is that demand? How many potential customers will you logically be able to attract, and is that number enough to sustain your business?
- Who is your target customer? How old are they? How much money do they make? Where do they live? What devices do they use? What are their shopping habits and styles? Do you have the means to service them and their needs?
- How many competitors will you be up against? Are you facing an oversaturated market with established players or a relatively new market without significant competition?
- What are the price points used by potential competitors, and can your new business survive at those levels? Do you have the distribution channels or wholesale prices on raw ingredients available to you that your competition has? Do you have (or can you hire) the talent your competition has?
- What will you call your business? Does anyone else use that name or a similar name?
- What licenses will your business require? How much insurance will your business need to carry?
If you’re able to identify these answers and the landscape looks healthy for a new business, you’ve already made peace with your desire to do whatever it is that is needed to see it succeed, and you’re still interested in moving forward, then it’s time to go to step four.
The Fourth Step in Starting a Business: Writing a Business Plan
You will want to write a business plan before going any further. It may seem unnecessary. You might have thought about your new business endlessly for the past twelve years. You may feel like you don’t need to write it all out, but this step is essential to the simplicity of getting your business off of the ground.
Additionally, investors may very well ask to see your business plan before investing, so you’ll be glad you have this all worked out at this phase. Getting this part done means you’re well on your way to opening day.
Here’s where you are going to get surgical about what it is that your business is going to do and how you are going to do it. If you’ve gotten this far, this should be the fun part. If you are feeling uncertain during this phase, it could be that you need to revisit your business ideas. If not, the business plan will be where you can address and solve multiple problems before they occur.
When it comes to writing your business plan, you’ll want to cover the following topics:
- Business concept
- Mission statement
- Products or services
- Management team and employees
- Stakeholders and investors
- Sales forecast (sales strategy + pricing strategy)
- Marketing plan (positioning + marketing)
- Distribution plan (if needed)
It’s easy to get excited while working on your business plan, but remember to keep it real. This should be a practical look at your business, not a hype-generating document of over-promises.
Whew. You deserve step five. Are you ready? Because here it comes . . .
The Fifth Step in Starting a Business: Enjoy an Overnight Trip w/ Your Loved Ones
Okay, do not skip this step.
Right now, you’re probably extremely excited about your new business and have spent considerable time making sure that it’s a healthy idea that’s perfectly suited to you and your abilities. It might have been that weeks or months have gone by, and all you’ve done is talked about your business to anyone who will listen. You’re super tuned in. And you should be.
So . . . stop everything you are doing and find somewhere wonderful to vacation. Go this weekend. Just for a night. Maybe a fancy dinner, some dancing, a movie, or even camping outside under the stars. As long as you bring the people who will support you the most when you are in the trenches.
Have fun. Relax. And soak in how nice it is to be surrounded by people who love you right here, right now, for who you are exactly as you are now. No matter what happens to your future, the people around you right now love you just the way you are.
The Sixth Step in Starting a Business: What’s in a Name?
Naming your business is more important than it seems. While Juliet so famously declared “What's in a name? That which we call a rose by any other name would smell as sweet,” a business name can and does actually influence the success of your business.
Is your business name complicated to pronounce or even just hard to spell? People will have trouble looking your company up and telling others about you. Is your business name too common? People may have trouble recalling the name of your company. Is your business name too similar to another business? You can face legal trouble, as well as finding yourself face-to-face (or email-to-email) with confused customers. If your business name is too limiting, it could stunt your growth–imagine if you start decorating weddings with a business name like “Mike’s Flower Arrangements,” but then open a catering division someday. It’s an odd conversion for a customer to tell everyone that Mike’s Flower Arrangements has the best pasta in the city.
You’ll also need to make sure that your name is unique. Be prepared to search online and find that someone has already claimed your favorite new business name. If you don’t find anyone who is using your ideal business name, then your next step is to see if the .com is available, too. (You can use a different .com if you need, but ideally you will be able to have your business name and website match, especially if you are just starting out.)
In addition to a great business name, you’ll want to develop a logo. Surprisingly, there’s a lot that can be said and done with a great logo. If you don’t have a deep background in design, this is the part of your business that you might want to consider outsourcing. A great designer can create a mark that both represents your business and is instantly recognizable. If you feel a logo is just a cute letter or symbol and anyone can create one, then it’s a good sign you might want to hire a graphic designer.
The Seventh Step in Starting a Business: Your Business Structure
Here's the part no one wants to talk about: you will have to choose a tax structure for your business. Not only does this affect how you file taxes, but it also decides your personal liability, as well. Thankfully, there are not a ton of choices:
- Sole Proprietorship – This is, all things considered, the easiest business structure to set up. In fact, this is the default business structure if you were to conduct business activities without registering as any other kind of business. This type of business comes with personal liability (your personal goods can be taken as compensation for business debts), but it’s also a good business setup for low-risk businesses looking to evaluate an opportunity before later reorganizing the business structure.
- Partnership – This is the type of business you’d be looking to set up if you were to start a business with another person or persons.
- Corporation – This is the creation of a legal entity that is separate from its owners. This offers new business owners the most protections, but the cost to form the corporation is much higher than the sole proprietorship or partnership.
- Limited Liability Company (LLC) – This is a hybrid of corporation and partnership business structures, which helps protect your personal items in lawsuits/bankruptcy but still considers its members self-employed.
The Eighth Step in Starting a Business: Federal Tax IDs and Business Bank Accounts
You’ll want to get an Employee Identification Number (EIN). Yes, if you are a sole proprietor, you can use your social security number–but you may have to give that number out to your vendors or clients. And having an EIN speeds up loans, sets your business up for growth, and makes things easier all around. And it’s free. You simply apply online with the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
You’ll also want to get a state tax ID, which is done specifically for your state (use a search engine for identifying your state’s specific tax ID application).
From there, you can go ahead and open your business bank account. You will want to get checks and a debit card associated with the account. This bank account will keep your personal finances and business finances separate from each other. This may not sound relevant yet, but always keep your business account for business and your personal account for yourself and family.
The Ninth Step in Starting a Business: Fill the Coffers
There are many ways to start and run a business. Some businesses will need a lot of capital; others don’t need much at all. While each business is unique, what’s important is that your business has the resources that it needs to get off the ground.
Many new businesses start with little cost. Often, someone who is already in an industry leaves their current employer and starts their own business. In that scenario, the new business founder will already have the connections, skills, and resources (software, tools, etc.) to easily transition into their new business.
Even without prior experience, some business ideas take little to no money. Let’s say that you would like to teach others how to be successful poker players. With today’s access to technology, you can build a website, set up social media, film YouTube content on a phone, and publish a book about how to win at poker. As long as you already own the laptop and phone, your start-up costs would be nominal.
In time, you could start a yearly course and subscription mentorship program for poker enthusiasts. You can leverage your new successful status with paid appearances and speaking opportunities. You can leverage your followers and partner with a casino to have a hotel buyout where you serve as an affiliate of theirs. As you become well-known, there are endorsement deals and partnerships available. And all of this can be done starting with a few dollars to register your business and a selection of software tools that should cost less than a few thousand dollars.
However, some businesses do require significant capital to get started. If you have a great business plan, you can approach banks to provide the capital needed. Other people may borrow money from friends and family to start their own business. Some people have savings that they use to invest in themselves. If none of these options is available, there are still options like grants from the US Small Business Administration and crowdfunding. A great idea should never have to stay silent.
You’ll also want to consider a business credit card. Even if you pay it off immediately after each purchase (and you should), you can rack up great points, airline miles, or hotel stays to use later.
The Tenth Step in Starting a Business: It’s Not What You Know, It’s What You Can Show
It’s time to show the world what your business is about. You may know that you make the best cannoli in the state of Montana, but you have to convince others of this. No one is going to randomly dial phone numbers looking for a cannoli salesperson who just happens to have a batch of fresh cannoli for sale. Thus, you need to be found when people are looking for what you offer (intent-based advertising), as well as reach potential customers when they aren’t looking for you (what we call disruptive advertising).
Create a Website
The first thing to do is to create a website. This will serve as your central online presence, with your other online properties (like social media) supporting this site. There are many website builders available for those who have no experience in creating a website.
Another option, and one that surprisingly covers a significant number of websites in the world today, is to modify a framework to fit your business. An example of that would be using WordPress or Shopify with a template in which you can swap content in and out. You can do this yourself or bring in a designer to help customize the experience. Or, if you have the funding and the need for a custom website design, you can hire a website designer or company to build a website from scratch.
The deciding factor on how you will create your website should be the intersection between time and function. If your online business is teaching people how to play tennis online, you don’t want to spend an eternity learning web design from scratch and may want to bring in a designer to quickly bring the functionality to the look and feel of the site you want. On the other hand, if you plan to sell your own homemade soaps and scrubs, you can probably learn enough about customizing Shopify to open your own shop.
The important part is to not lose years developing a website when someone else could help you produce a website in a matter of weeks or months (depending on scope).
You will want to answer all of the typical “reporter” questions on your website: who you are, why your products are superior, when your team will arrive (service businesses), what you sell, how people can buy your products or services, and where your products are sold.
Beyond that, be sure to creatively tell your story. How did you get here? What makes your products or services so special? You may know everything about what makes your business amazing, but your website is where you need to communicate that to others.
You’ll also want to sign up for an email marketing service. The good news is that if you’re just getting started, the major online services are free. As your list grows, you’ll get into different pricing tiers, but by the time your list is that big, you’ll be fine paying the nominal fees for the service.
Being able to reach out to your audience at any time with any message is worth its weight in gold. If you are running a special, opening a new store, or even closing for a week due to a hurricane, there’s nothing better than reaching those who matter most to your company with a quick and easy email.
The major online email marketing providers also provide templates and easy-to-customize layouts, so you need minimal design experience to create beautiful emails.
Of course, you’ll want to create Facebook, Instagram, or other social media profiles as they fit your business. Having a strong social media following allows you access to your stakeholders at all times. If you are having a sale or would like to announce a new product, reaching thousands (or millions) of followers via social media is a wonderful way to communicate these events. Additionally, your personality/brand has a chance to express itself, allowing you to create a community around your offerings.
What social media platforms are best for business? The answer is that it’s varied and really depends on your audience. Maybe your business is best suited for Twitter. Or maybe Tik Tok, or Pinterest. One smart idea is to examine the social media mix of others in your niche. What platforms are they using? You don’t have to reinvent the wheel. If you see they are connecting with their followers on any platform, then you can assume that platform may very well work for you, too.
One powerful piece of advice, however, is to not dabble on a social media platform that you don’t keep up with. Once you commit to an online social media platform, populating that platform with interesting, engaging content should now be a regular part of your marketing mix.
Of course, another thing that you’ll want to be able to show is . . . profits. You will want to partner with a good accountant or CPA, or sign up with a firm to handle these things for you. You’ll also want to invest in financial software to track cashflow. None of these need to be expensive.
The Eleventh Step in Starting a Business: Your Suppliers, Retailers, and Marketplaces
Finding Suppliers for Your Business
While some businesses require little in the way of raw materials or even manufactured goods, other businesses are heavily dependent on a supply of others’ products or materials to generate their profit. If you’re starting a business based on an industry that you’re already familiar with, then you’ll likely know and have relationships (at least by proxy) with suppliers and manufacturers.
If you’re entirely new to the game, though, you may have to do some investigation. The most important and most logical way of finding suppliers for your business is to reach out directly to manufacturers. Sometimes, though, this effort is met with unreturned phone calls or red tape. And many suppliers won’t ship unless there’s a minimum order. So while you’d love to open an online store to sell top-of-the-line makeup products, you might find that you’d have to order more than you’re ready to take on.
Don’t despair if you don’t line up all your suppliers right away. Sometimes, these things take time.
One idea, if we were to keep in line with our example of selling makeup products, would be to attend trade shows. Attending a trade show will give you access to lesser-known, but potentially outstanding, makeup brands and products. Selling boutique makeup products may not be your original idea, but these new, up-and-coming manufacturers will be glad to have their products in your store. What’s more, as they grow, and as your relationship with them grows, so does your own business. You’d be surprised what a small world the beauty industry can be.
Also, sign up for industry groups, Reddit subs, and other collections of people doing what you do. You’ll make friends, and people will be glad to help.
Another idea is that if you are only doing business in certain areas (perhaps in your city or region), you can reach out to business owners with similar businesses in markets that you won’t be entering. Since you won’t be a direct competitor, you’ll likely find great advice and mentorship from other company owners. Just make sure to be upfront about your intentions and to be truly kind and respectful, even if someone passes on giving helpful advice. When someone is willing to help, you can ask them directly for their list of suppliers and an introduction. Offering a little quid pro quo once you’re up and running can’t hurt, either.
You can also explore distributors and wholesalers. This isn’t quite the same as direct from a manufacturer, but these channels allow for smaller retailers to obtain goods from a variety of manufacturers who otherwise do not sell to smaller businesses.
Another option is to look for bulk sales of goods online. Especially on sites like eBay, you can (usually) easily find bulk sales of raw materials. It may not be the most cost effective method since you’d be relying on a constant supply from third-party vendors, but it can work as you’re first starting out or if you do not require timely, consistent delivery of raw materials and supplies.
Suppliers for Business Management
You will want to consider what suppliers you will need for day-to-day operations. If your business is based in sales, then a software solution like Salesforce might be a consideration. If you plan on operating a service business, you may want to negotiate a phone plan for on-location staff. You’ll want to visualize your daily operations and account for all the third party vendors that you will be contracting.
Got an office or retail space? Then you’ll want to look into security systems, phone systems, office cleaners, and more. If you’re running an online-based business, you’ll want to explore a business phone line, web hosting, a financial services provider, merchant programs, and possibly a delivery/pickup service (if you will be shipping goods). And if you pay employees, you could consider a payroll provider like ADP.
No matter what business you’re starting, you’ll want to at least inquire about business insurance. Types of insurance that you may want to consider include:
- Worker’s Compensation
- General Liability Insurance
- Property Liability Insurance
- Commercial Property Insurance
- Product Liability Insurance
- Personal Liability Insurance
At this stage, you’ll also want to make sure that your business has obtained all required licenses.
Finding Retailers to Sell Your Goods
Another challenge that may or may not be in your future is finding stores to sell your goods. Say you'd like to create an all-natural energy tea with organic maca root. Unless you have the right relationships in place, you won’t be able to go into the regional Whole Foods market headquarters with a bag of your tea and end up on the shelves tomorrow. Thankfully, if you haven’t started your business yet, you just need to be aware of this for now and know that you’ll eventually need to be ready when it occurs–which means that you should consider building relationships within your industry as the opportunities arise.
Once you’ve created your product and your business is up and running, you’ll want to find retailers to carry your product. The first secret to finding retailers to carry your product? Ask!
And ask nicely. There are going to be a lot of rejections in your future, especially the “maybe, but not right now” kind. It’s okay. Your experience is normal. You’ll need to find the right retailers for you.
Big retailers work very much like major music labels in the 1990s. They’ll want to see proof of the salability of your product besides the great songs. So to apply that to an energy tea model, it might be good to visit local tea shops in your area and have your tea available for sale both in-store and online (if possible). You’ll want to visit independent supermarkets. You can have a booth at state festivals, farmers’ markets, and other gatherings. Contact restaurants that would be enthusiastic about your product, like organic and specialty restaurants, bakeries, and tea shops. Stop into the local college and see if they would be interested in serving your healthy, organic energy tea.
From there, you can also start to sell on Amazon and other online marketplaces on your own. As you grow your business with these channels, it creates the data points you need to convince larger retailers that your product will be in demand and profitable.
Once you’ve planted the seeds and done the work, you can start to find product representatives to help place your products into bigger retail stores. You should absolutely attend the top trade shows as a vendor. Everyone in the industry will be there looking for new products, and giving out samples of your tea is ideal.
How to Create Your Own Marketplaces
Sometimes you don’t have to worry about which stores are going to carry your products or how you’re going to find the raw materials you need to create the world’s rarest products. Maybe your business is built on things that are easily sourced. Perhaps you carve amazing art pieces out of driftwood. If you live near a source of easily-obtainable driftwood, you wouldn’t need to care much about the challenges other businesses face when manufacturing goods. You also probably don’t have the ability to create enough similar products (quality controlled) to be in a major retailer. You can sell and ship these pieces directly!
Creating your own marketplaces has never been easier. With easy-to-use software like Spotify and WooCommerce, you can create your own marketplace right on your website. In addition to that, there are online communities like Amazon, Etsy, eBay, and ArtFire. Selling online has never been easier.
The Twelfth Step in Starting a Business: Build
At this point, you’ve probably spent quite some time getting all of your ducks in a row. Be proud of the work you’ve done already and excited for the work yet to come. You’ll want to start putting the pieces together – make sure you’ve addressed all of the items in your business plan, try to think through the moments where things could go wrong and prepare ahead of time, and remember that you don’t have to be absolutely perfect before starting your business–no one ever gets it 100% correct to start.
The Thirteenth Step in Starting a Business: Launch
Once you have spent the time accomplishing all that has been laid out here, you should have a firm idea of what awaits you. If you are looking for a solid blueprint on how to take this knowledge and launch a product, service, or book, then I recommend joining us here for Product Launch Formula, the proven launch gameplan responsible for over $1 BILLION in sales–in every kind of market imaginable.
I’ve coached or helped all kinds of experts including Tony Robbins, Brendon Burchard, Dan Kennedy, Bill Glazer, Rich Schefren, Frank Kern, Dean Graziosi, Yanik Silver, Greg Clement and dozens more “gurus.” But I get most excited about all of the new business owners that I’ve helped quit their jobs and launch or grow serious businesses.
Check out the posts below for a deep dive into starting an online business:
- 15 Years Of Internet Success (And The First Law)
- What If You're Not An “Expert”?
- Your Independence Day
- The ONE WORD SECRET To My Success
- Do You Need To Be An Expert?
- How To Make Your Own Good Luck
- Is It Too Late To Start My Business?
- The Vision For Starting a Business
- Coaching at 115 Miles Per Hour
- Innovation vs. Marketing Suicide