Starting a business is exciting! So the fact that you’ve even stopped by this article is worth a huge congratulations. But the big question… How do you start a small business? Especially, how do you start a small business in 2024’s market?
You may have the dream, the ideas, the passion, the gusto, and the determination…
But really, how do you get started? How do you make your dreams come to fruition? Well… it involves a lot of planning, decision-making, and a series of legal processes.
Starting a Business in 2024
A new year, a new you. Or a new business. The new year is always an opportunity for change and growth. So why not grow your passion and ideas into an actual income? 2024 offers an opportunity for aspiring entrepreneurs to turn their business dreams into reality.
Embarking on a business venture in 2024 holds potential. It also brings its fair share of uncertainties. The changing economic landscape, market dynamics and emerging technologies can be both. Intimidating for new entrepreneurs. The question of where to begin, how to secure funding and how to adapt to shifting consumer preferences can feel overwhelming.
That’s where our comprehensive guide on starting a business in 2024 becomes an invaluable tool. We understand that the journey towards entrepreneurship is filled with unknowns, which is why we have created this guide. It aims to provide clarity and guidance helping you navigate the intricacies of launching a business with confidence.
Below we provide 12 valuable steps for entrepreneurs to follow as they begin their small business journey. Let’s get to it.
1. Research the Market
Assuming you already have the skills required for a service industry business or the product developed or available for stocking purposes, the first step you will need to take is to do a little market research.
Market research basically just lets you know if your small business ideas are worthy of a business. Meaning, would your plan be profitable? Is there a need?
You would gather information, possibly through in-person or online surveys about potential customers and other businesses in your area. Then you would use that information to achieve a competitive edge for your small business.
2. Design Your Business Plan
Next, it is essential to design a detailed business plan. Business plans are the foundational roadmap to your endeavors. It is the structure of your business strategy. Your plan will determine your business’s services, functions, prices, and marketing strategies.
Additionally, it will showcase how your business plans to grow. This map will also be the selling point to convince partners or investors that working with you is an easy choice.
A professionally presented business plan must be thorough and well thought out with a clear outline of your operational intentions. This may be all new to you and you may not know where to start on a business model outline. There are plenty of additional resources online that can help you design yours. But, to get started, you can refer to the below sections to see what should be included in your business plan:
The executive summary explains the key points of the entirety of your business plan. It should be a brief synopsis of your model so readers can gain an understanding of your company quickly.
Here you will provide an analysis of what type of company you are. What industry are you in? What type of legal entity are you: a sole proprietor, an LLC, a partnership, an S corporation, or a C corporation? Etc.
This is where you show you have done your homework on your industry as a whole. You will be able to provide trends, concerns, and what your company can do to solve market needs.
This section gives you space to outline who your ideal clients are and why. What demographics will your solutions target? Identify your target audience with location, age group, gender, socioeconomic status, geographic location, and most importantly…their needs.
This analysis will prove you know what you are up against. You will list your key competitors and how your products or services will offer a more competitive edge to outsmart the market’s leaders.
This section showcases how your day-to-day business will function. You will list your employment needs, daily operations, and timeline of projected growth.
In this section, you will list how management will operate and what type of team you will have running your daily operations.
The next section is all about money. You will need to address startup costs, budget analysis, profit estimates, and how you expect to fund it all.
Your marketing plan is key. This outlines how you will go about successfully gaining clientele by showcasing a product that sells. This plan should detail 4 key ideas:
1. Product/Service: What you are selling
2. Prices: The cost your clients will pay for your product or service
3. Place: The location of where you will be doing business. This can be a physical location, multiple locations, or even an online store.
4. Promotions: How you will advertise your product or service to your target audience. This can be through social media campaigns, Google ads, television commercials, online video ads, telemarketing, etc.
5. Name Your Small Business: One of the initial steps to starting any business is choosing the right name. Your company’s name sets the first impression for any potential client or industry partner. Ideally, you want your name to be memorable and define your unique brand with a meaningful impact. Below are some tips to use when choosing your name:
- Choose a name that is simple and easy to remember. You want your clients and business partners to be able to easily spell and pronounce your name.
- Double-check that your desired name and web domain are available. You can use search engines like Google or trademark databases for registered businesses. You want to avoid using the same name as another company in your industry or even a business that you would not want to be confused with. This can cause a lot of future frustrations.
- Keep marketing strategy in mind. Choose a name that can easily be branded to reflect your desired intent. You want to avoid any potential confusion and deliver a purposeful brand.
6. Determine Your Small Business Location: With this step, you need to ask yourself these questions:
- Where do you want to do business?
- What can you afford on your budget?
- What do you expect your profits to be within your budget?
- Do you see your business expanding?
- How far in the future do you see an expansion occurring?
Your office location will depend on what area you want to serve and how much you can afford for your facility. Keep in mind that start-up costs will play a huge factor in what you can afford to rent, lease, or buy.
Additionally, you may need to pick a location that is expandable or offers a shorter lease term. Keep in mind, most commercial leases are 5 years. If you see quick growth potential, you may want to consider options that allow you to move to a larger space or the potential to expand within your startup building.
Talking to a commercial real estate broker may help you determine the actual monthly expense to run your business out of a commercial building. Once you determine your budget and a few ideal locations, you can reach out to property managers and apply to use the space.
3. Choose the Legal Structure of Your Small Business
The next step is determining the best legal structure for your business. The structure of your business will determine how much you pay in taxes, your registration requirements, and any personal liabilities. Once this is finalized, you will need to register your company with the Secretary of State for each state you will be doing business. See below for the 5 most popular legal structures for businesses.
A sole proprietorship is a very common legal structure for most small businesses. It is an unincorporated private business owned by an individual.
The owner of a “sole prop” would assume all legal responsibility. Their personal assets would be tied to any business obligation or debt. Taxation would use a social security number (SSN) rather than an Employer Identification Number (EIN).
The advantage of a sole proprietorship is that it is the easiest and least expensive legal structure for a business. An owner has few formalities to commit to and it is the easiest of all structures to navigate.
If you are looking to go in on business with another person, or even 2, you would establish a legal partnership. Together, all parties would be accountable for any legal activities, debts, and profits.
The biggest advantages of partnerships are easy setup and joint responsibilities. However, shared liability can have its disadvantages. Maintaining professionalism, having different personalities, different ideas, disagreements, and resolving conflicts, can be difficult to navigate.
Limited Liability Company (LLC)
Limited liability is a legal structure that may not be recognized outside of the United States. LLCs have a hybrid combination of a corporation with either a sole proprietorship or partnership, depending on how many owners are involved.
Furthermore, there is no limit on the number of owners that can be involved. However, it can only remain as a private company. Meaning the business cannot go public for shareholders.
The main advantage of an LLC is that this form of legal structure protects the business owner’s personal assets and shields them from any personal responsibility from all business liability and debts.
LLCs can be taxed once or twice a year. Owners can choose which taxation structure works best for their business.
S Corporation or C Corporation
probably not your ideal legal structure. However, for learning’s sake, we will divulge a tad.
An S corporation, like an LLC, offers its owners personal liability protection. S corporations avoid double taxation by passing the business income through to their personal taxes.
However, S corporations, although in the public sector, are limited to 100 shareholders. S
corporations are also required to have a board of directors. Essentially, more administration regulations give less freedom or flexibility to the owner.
A C Corporation’s legal structure completely separates the owner from the business. Because of this, C corporations also offer limited liability advantages. C corporations are required to have their own tax ID.
This also means that C corporations are subject to be double taxed, on their profits and the shareholders’ dividends. However, this public sector business structure can have unlimited shareholders.
Like S corporations, C corporations are also required to have a board of directors. Which makes administration regulations less forgiving on freedom or flexibility for the owner.
4. Register Your Small Business
Once you have completed the above steps, you will need to officially register your company with the Internal Revenue Service (IRS). Once your registration is processed, the IRS will issue you an Employer Identification Number (EIN) for your Tax ID. Or you will simply use your SSN if you are running a sole prop.
Your EIN or SSN will give your business the ability to set up a merchant account with a bank, hire employees, issue payroll, and properly pay business taxes.
5. Apply For Your Small Business Licenses, Permits, and Insurance
As a small business owner, you need to do your due diligence in determining what remaining permits, licenses, and insurance you will need to legitimize an operation within the city, county, and state you will be working.
These permits and licenses can vary from state to state. We recommend reaching out to your local Small Business Administration or state website for more details on local business requirements.
There are numerous types of business insurance policies out there. It would be wise to consider some of the following insurance policies when starting your small business. You can contact a local insurance agent to see which policy would best fit your needs.
- General liability insurance: This policy will cover any damage, accidents, or injuries that occur on your business property to or by any employee or product.
- Workers’ compensation: This policy would be offered to employees. It coincides with general liability and would cover any medical expenses or leaves of absence a staff member would experience from a work-related injury.
- Commercial property insurance: This policy covers any commercial property damage from vandalism, flood, fire, or theft.
- Business interruption insurance: This policy will cover unforeseen loss of revenue and added expenses if your business is forced into closure by certain outlined events.
- Professional liability insurance: This policy will cover your business against negligence claims
6. Partner With the Right Vendors
When you build strong relationships with the right vendors and or manufacturers you will be setting your business up for success. Reliable vendors and manufacturers are trustworthy, communicative, offer you the best deals, and have your supply ready when you need it.
7. Open Your Small Business Bank Account
Next, it is essential to open a separate bank account for your small business. This keeps all income and payments separate from your personal bank account. Which helps uncomplicate your finances come tax time. This procedure will require the following 5 easy steps:
- Decide on the bank you want to use and contact them.
- Set up a meeting with a banker to establish a positive relationship. From here, discuss your small business needs.
- Fill out the bank account application.
- Deliver the required documentation to the bank. This generally includes your identification cards, proof of address, and the Articles of Incorporation document you received from the secretary of state.
- Wait to be approved.
8. Acquire a Small Business Credit Card
Once you are approved for a small business bank account, you should look into acquiring a credit card under your business name. This will also help separate your business credit card transactions from your personal expenses.
It also helps you build a credit history for your business. In building credit, you can help yourself secure a small business owner’s loan with more ease should you need additional funding in the future or even for your start-up plan.
You can choose to apply for a credit card with the issuing bank of your current business account or a specific credit card company. Look into which banks will offer better perks for using their card. The application process should be pretty straightforward.
9. Create Marketing Materials For Your Small Business
An array of marketing materials are essential to attract and obtain new clientele to your company. You can either hire a team in-house to make these designs or you can contract out your marketing needs. A few key marketing materials that you want to be sure you implement are a logo, a website, and social media accounts.
Like your name, your logo depicts your brand. It can be the first impression you give to potential clients. You will want something that sparks a memorable encounter.
Your logo will be showcased everywhere including your website, business cards, stationary, email signatures, printed and digital marketing campaigns, and so on. The right logo can make all the difference when it comes to customer interest.
Additionally, your website is of the utmost importance. This is your business’s digital brand. It is the roadmap to who you are, what you offer, and what sets you apart.
This information should all be presented in one beautiful and easy-to-navigate online design. This is the best tool you can use to attract more clients and provide them with contact information to reach you.
Social Media Accounts
Many of your target clients will use social media to locate your small business. It is a great way to interact with ideal customers. Depending on your audience, different accounts may attract clients more than others. Either way, you should open accounts in your company’s name on LinkedIn, Instagram, Twitter, and Facebook.
10. Secure Business Funding
Lastly, you will need to secure funding for your business. Your business plan can help you determine how much money you’ll need to start. And the possibility of needing extra money to maintain your small business financially during the challenging early stages of a startup.
Understandably, most entrepreneurs don’t have this type of cash on hand to start a business. This is where the beauty of small business loans comes in handy. Once you have a structured business plan mapped out, you can contact a financial institution or a local lender for financing or a merchant cash advance. Let’s look a little further into the details of how to fund your small business.
How to Finance a Small Business
The first step to funding your small business is determining how much money you will need to launch. Not all financial solutions are one-size-fits-all. Your business needs will vary from others which means your financial needs will be different.
Not to mention your personal financial situation at the startup. These factors will shape how you decide which course is the best to take for gaining access to funds.
So, once you figure out how much startup funding you will need, it’s time to determine how to get money for your business startup. You have 3 main funding options:
- Startup business loans
Self-Funding For Your Small Business
When you become a self-lender you would be leveraging your personal financial resources to support your business finances. Though called “self” funding, it’s not always done all on your own. Yes, you can use your savings account or tap into your retirement funds from your 401(k), but you could also turn to friends and family for financial assistance. But, telling your loved ones “I need money” to support your dream is always a challenge and might not be beneficial to your relationship.
A benefit of self-funding however, would be that you get to retain total control over the business. The disadvantage? You personally take on all the risk. And some of that risk may include borrowing money from family. This type of loan can be detrimental in the long run if things don’t go to plan. So, be wise not to spend more than you can afford.
Acquire Venture Capital From Investors
The next way to gain funding is through investors. A person or group of people can provide you with venture capital to start your small business. But venture capital investment is not a small business grant, nor is it a loan.
Venture capital investments are an exchange. Startup funding in return for a share in the company and a percentage. Investors are looking to invest in businesses that will have a high ROI (return on investment).
Venture capital differs from traditional loans or financing in a number of ways. ROI is not interest, like a loan. Basically, if the business does well, the venture capitalist does well because they are receiving an equity return.
Not debt repayment plus interest. Investors will mostly focus on potentially high-growth businesses knowing they have a higher risk they will have a higher reward if successful. You can look up the best investment companies online to get started.
Crowdfunding is a really great option if you have the opportunity. With this type of funding, a group of enthusiastic supporters will support a startup company by raising the necessary funds for the business.
Crowdfunding is not a money loan. Unlike business loans for startups, crowdfunding is more of a gift. Crowdfunders do not expect any interest repayment or any return on investment or ownership in the company. At most, a small business could thank the crowd funders with in-person meet and greets or a gift of the small business’s products.
Apply for a Small Business Loan
Lastly, if you do not have enough money in your personal finances, you cannot find crowdfunding opportunities, and you want to retain total control over your company, you can look into a business startup loan program.
Unlike a personal loan, a small business loan or business line of credit will not affect your personal assets. Huge plus. One of the best things you can do after deciding to go the loan or financing route is to compare different online lenders, banks, and credit unions. You will be offered different loan amounts and interest rates depending on factors such as your time in business, your business plan, and possibly your credit history.
ECS is an online lender that can offer your small business startup the funds you need to get your dreams off the ground. We offer both merchant cash advances and business loans with:
- A quick and easy online application
- Extended repayment terms — up to twelve years*
- Large loan amounts — up to $250,000*
- Funding in as few as 3 days**
- Affordably low monthly payments
- Zero personal collateral required
- Premium customer service 7 days a week
You can learn more about our easy business lending program here.
You can also look into lending from the Small Business Association. They offer SBA business loans, SBA small business loans, and SBA microloans.
11. Find a Payment Processor
The last thing you will need to do before you open your doors, or website, for eCommerce merchants, for business is determine how you will accept payment. Cash and check simply won’t cut it anymore. Especially in 2024. A successful business will have multiple payment solutions to accept various digital payments such as credit cards, debit cards, and bank to bank transfers, or ACH.
ECS Payments is a merchant service provider that is here to help you discover the payment solutions that will best meet your needs. And our seamless integration makes the whole process a breeze.
12. Open Shop
Once you’ve successfully completed the 12 steps above, congratulations, you are ready to open up shop and start serving the people with your big dreams. What’s left is continuing to manage and grow your business.
For more information on starting your small business and accepting payment, contact ECSpayments today.