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How to Start a Business in 2022: A Step-by-Step Guide

How to Start a Business Starting your own business can seem like an overwhelming prospect if you’ve never done it before. Luckily, plenty of other entrepreneurs have done this, and you can benefit through the wisdom they gleaned from their successes and their business mistakes. This guide on how to start a business, whether it’s your first or your 10th, will help you with everything from finding and validating your money-making idea to figuring out your shipping strategy to finally launching your product or service.

How to start a small business

Starting a new small business? Follow this step-by-step guide to transforming your business from a lightbulb above your head to a real entity.

Refine your idea

The general rule is that if you’re stuck, ask yourself what questions need to be answered in order for you to move forward. Don’t try to answer them yourself; use these questions as your jumping-off point when researching your business idea. Now is not the time for blind optimism or guessing at answers—the most important thing you can do at every stage of business creation is research, so hit up Google and dive into forums, LinkedIn groups, and Reddit conversations about starting a business. Post about your idea on Facebook and Twitter, too—you never know who will have some insider knowledge that could help you avoid costly mistakes down the road.

Don’t forget to read this: 21 Online Business Ideas You Can start in 2022

Write a business plan

Write a business plan

Writing a business plan helps formalize your idea and can streamline the business-creation process by getting you to sit down and think things through methodically. And, yes, plans are (often) worthless, but planning is everything. Many entrepreneurs say they rarely look at their plan once they’ve launched—but they’ll also tell you there’s value in thinking through and researching your idea. At the very least, you’ll quickly figure out what questions you don’t have answers to. Having a firm grasp of your known unknowns is important and writing a business plan is the perfect way to make sure that happens.

Assess your finances

Writing your business plan is about more than putting words on paper. It’s also about knowing what you need in order to start, operate and grow your business. The good news is that most of it comes from within—in other words, you don’t need tons of money or complicated financial arrangements in order to get started. In fact, some of the best businesses out there got started with very little capital and have grown big time. The point here is that while starting a business can be a major financial undertaking (ask any entrepreneur), you probably don’t need as much money as you think. So do yourself and your wallet a favor by figuring out exactly how much cash (and debt) will be required before moving forward with your idea.

Determine your legal business structure

In addition to figuring out what kind of business you want, it’s important to determine which legal structure is best for your goals. Most small businesses start as sole proprietorships or LLCs. Sole proprietorships are easy—just one owner equals one business, but they don’t offer much in terms of protection from liabilities (the owner is liable for everything). If you have partners or investors and plan on expanding, an LLC might be right for you. The primary benefit of an LLC is that its owners can decide whether they want limited liability; this means someone can take on financial responsibility without necessarily being liable if something goes wrong. You should check with your state’s government and/or consult a lawyer before deciding between one structure versus another.

Register with the government and IRS

Before you can start your business, you need to register it with both your state and federal governments. While there are some forms that are similar across states (like Articles of Incorporation or Certificate of Formation), each state has different laws around small businesses. To make sure you’re following all local and national laws, hire an attorney or accountant who is familiar with small business incorporation. In addition, your new company will need an Employer Identification Number (EIN) from the IRS, which will be used for tax purposes and necessary interactions with other government entities. Without one, you can’t operate as a legal business in most states.

Also Read: What Are Porter’s Five Forces and How Do They Apply to Your Small Business?

Purchase an insurance policy

Before you spend one penny on any aspect of your business, buy an insurance policy. No matter how solid or profitable your business idea is, there are always risks involved in growing it. If you start spending money and something bad happens—something that could have been prevented with adequate coverage—you’ll be kicking yourself. To do so would hurt you more than any financial setback, so take it from us: protect yourself by purchasing appropriate insurance early on. After all, an ounce of prevention is worth a pound of cure!

Build your team

Build your team

If you’re working on your business idea by yourself, you may want to hire part-time help. Ask friends and family if they’d be willing to work for free (in exchange for stock options or other perks). Or try offering small, one-off tasks online on freelance sites like oDesk or Elance. If it looks like your company will be able to sustain full-time employees, consider hiring freelancers first—they are usually more flexible with scheduling and require less paperwork than you do. Make sure that people hired remotely can handle the technical aspects of running your company; for example, if you want them to create a website for you, make sure they know how to build one from scratch.

Also Check: Top 10 Communication Apps for Small Business

Choose your vendors

You can’t just wing it when you start your business. If you want it to be successful, then you need vendors in place that will supply everything from raw materials for your products to production equipment and transportation services. It’s important to find reliable partners early on—when your business is still small enough for them to be flexible but large enough for them to respect—and hire them long-term (which doesn’t necessarily mean paying higher prices). Make sure they are reputable companies with good reviews, solid reputations, and good processes. If possible, meet with them face-to-face before signing any contracts or official agreements.

Brand yourself and advertise

As you think through your business idea, one of your biggest concerns should be how to position yourself in relation to your competitors. What’s going to make you stand out? Make sure that everything is branded properly and adhere to any relevant industry standards (such as ensuring that your About Us page is written at an eighth-grade reading level). If you want people coming back for more, advertising is important. To get started, use sites like Facebook or Twitter—but always double-check that you’re not breaking any rules or laws before sending out those tweets.

Grow your business

Once you’ve started your business, you’ll have to get your name out there. Public relations and social media marketing are great ways to do so. In fact, a 2015 Nielsen report found that Facebook was driving more traffic than Google—meaning it’s time for small businesses everywhere to spend some time on Facebook. If you still haven’t signed up for your own account, now might be a good time. You can take advantage of Facebook Pages, where companies and public figures can set up their own pages dedicated solely to brand content and product updates.

Also Read: SWOT Analysis: What It Is and When to Use It

FAQs about starting a business

Starting your own business can be scary and overwhelming, but if you’re aware of all of your options, it can also be incredibly rewarding. Many people looking to start their own company have a lot of questions about different types of businesses and how to structure them. Below are some commonly asked questions about starting your own business so that you have more knowledge about what’s out there for you.

How can I start my own business with no money?

How can I start my own business with no money?

It’s always exciting to dream about starting your own business, but thinking through how you’ll make it happen can be overwhelming. From registering your business and filing taxes to nailing down a viable business model and figuring out how you’ll make money—there are so many details that seem big at first but become manageable as you learn more. Figuring it all out is overwhelming, but let’s start with just getting something written down. In an effort not to scare away anyone who isn’t sure if they should launch their idea or not, here’s how to get started even if you have no money: Get something on paper; create a timeline; break things down into chunks of time that are actually realistic for you.

What is the easiest business to start?

What is the easiest business to start?

In order to answer that question, we need more details about what kind of business you’re looking for. Is it an online business? An offline business? Something in between? Online businesses are easier than offline ones, but both require a lot of work. In order to make your startup as simple as possible, it helps to choose an industry with little competition. You’ll also want your product or service to be original and compelling so that people will buy it over its competitors.

When is the best time to start a business?

As with so many things, it depends. What is your specialty? How long have you been thinking about starting your own business? If it’s something you’ve always wanted to do, then there really isn’t ever a bad time for it; in fact, there are likely advantages (and disadvantages) associated with any given point in time. That said if you want some more structure or guidance on when to start your business and why here are some factors that could be influencing your decision.

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