By: Fisher Stone, P.C August 1, 2024

Starting a Small Business in Seven Steps

#1 – Do Thorough Research

Perhaps surprisingly, this is the step that many new business owners skip over entirely. Whether this will be the first business you start, or you have done this a few times over, carefully investigating the market you hope to enter is essential. It’s not enough to just have an idea that you think is good – you want to have some proof that the idea is viable and that you have a path to profitability.

Here are a few general steps that should be included in your research process –

Identify the market niche. Figure out exactly what segment of the market you are intending to enter. If you can’t find a market niche that aligns with your intentions, you might want to think twice about the plan you have in mind. Most likely, if there is money to be made, someone is already at least playing in the space. So, find a niche that exists but that presents you with some type of opportunity to compete.
Find an opportunity. You’ll want to be able to identify some type of weakness in the current market that you plan on exploiting with your new business. This could be in the form of a lower price than what is on the market currently, it could be in the form of a better quality product, or it could be something else entirely. Right from the start, you want to see a direction that will allow you to stand out from the competition and start to make some sales.
Assess the feasibility of your business. It’s one thing to recognize that there is an opportunity in a market – it’s another thing entirely to be able to take advantage of that opportunity. For example, you might see a weakness in the commercial airliner industry that you think could be exploited, but without billions of dollars, there isn’t anything you can do about it anyway. Research the feasibility of what it will take to get your new business up and running and whether or not you have the resources available to bring this vision to life.

#2 – Draft a Business Plan

This second step dovetails nicely with the first one. As you are doing your research, and if it starts to look like you’ll want to go ahead with your business venture, you can start to structure a formal business plan. Like the first one, this is another step that some people skip, as they just choose to jump right in head first without getting organized and figuring out exactly what they are going to do.

The good news is that you don’t necessarily need a formal business plan to get started. Even just a page or two written out that highlights what you intend to do will be better than nothing. Of course, if you are going to be looking for outside investors, you’ll likely need a far more advanced, detailed plan so those people will feel comfortable putting their money into your venture.

Some of the components that should be included in a business plan are an executive summary that highlights the overview of the business, a description of what you’ll be doing and who you will serve, a strategy for taking the business to market, and more.

#3 – Secure Financing for the Business

Every business requires at least a little money to get started – and some require a lot of money to get off the ground. There are many different ways that you could potentially fund a business and you need to have a plan in place for financing to make sure you don’t get everything ready only to realize that you can’t afford to bring it all to life.

Perhaps the easiest option to fund a new business is to put up your own money. If you have enough money saved – that you can afford to risk on a business venture – you won’t have anyone else to answer to and can just get started immediately. This is a nice way to go but it is not a practical option for many people, other than those who are starting businesses with minimal upfront expenses.

The two other primary options to pay for your new business are taking out a loan from the bank or finding investors who want to be a part of the project. Each of these has pros and cons. With a loan from the bank, you retain complete ownership over the business, but you do have to pay back the loan with interest. Taking the investor route allows you to avoid some of the drawbacks of having a loan hanging over your head, but you’ll give up part of the business to your investors, which might not be ideal.

#4 – Take Legal Steps

You’ll want to carefully consider the legal side of going into business as you put the wheels in motion and get closer to making your first sale. While anything in the legal realm can be intimidating, working with a firm like Fisher Stone will help to calm your nerves and ensure you are making reasonable, rational decisions.

One legal step that you’ll likely want to take early on is formally registering your business in your chosen structure. From an LLC to a corporation and beyond, there are plenty of options for how you can form a business, but only one will be right for your needs. Getting advice on this potentially tricky topic will make it easier to navigate.

#5 – Establish Your Physical Operations

There will come a point when you are actually ready to start establishing your operation and putting things in motion. Of course, as we go through these steps, you should remember that many of them will be going on at the same time, and there will be plenty of overlap along the way. You certainly don’t have to complete one entirely before moving on to the next.

For some types of businesses, establishing operations is going to mean leasing a space that you can use to serve customers. In the 21st century, however, this is far from a requirement, and you might wind up starting an entirely online, digital venture instead. Even if that is the case, you are going to need the space required to work on such a project, along with the equipment that is necessary like computers and other tools.

#6 – Create a Team

It’s true that some businesses remain just a one-person operation for their entire lifecycle. That’s the exception rather than the rule, however, and if you want to have the potential to grow and expand over time, you are going to need help.

Hiring employees, or even paying contractors, can be expensive, so you’ll wade into this area slowly as your business develops. Start to look for ways that you can outsource some of the things you have been doing on your own. That will free up time for you to invest in other tasks, and you will hopefully find that the time you save winds up leading to more growth, and the cycle can continue to pick up speed moving forward.

#7 – Hit the Market

At long last, it’s time to put the planning and preparation phase behind you and finally start using as much of your time as possible to secure customers and bring in revenue. Of course, the planning never really stops entirely for a business owner, as there will always be more that you have to think about and anticipate to stay ahead of the competition. At least you now get to turn most of your effort toward the most exciting part of owning a business, even if you do have to circle back to the more administrative stuff from time to time.

We hope you feel a little better already about the task in front of you. Yes, there is a lot of work to do, and no, you can’t be sure that your business will succeed until you actually put it out into the world and see what happens. Rather than worrying about that future, stay in the present and execute the steps above in a way that suits the needs of this upstart operation.

At Fisher Stone, we offer a range of services to help new and existing businesses manage their legal concerns, so they can get back to focusing on serving clients and customers effectively. Take a moment today to get in touch and learn more.