Running a business can have a powerful impact on your life and the lives of those around you, but before you can manage it, you must set it up.
If you’ve never owned a business before, the idea of starting your own can seem frightening. Fortunately, many other entrepreneurs have already done so, so you can benefit from the wisdom they gained from their successes and failures.
These 13 time-tested steps will help you start a business, whether it’s your first or your tenth, with tips on everything from finding and validating your money-making idea, to discovering your shipping strategy, to finally launching your product or service.
1. Use the time you have available
No matter how ambitious your business goals are, you can still start a business in your spare time, and fit it in with your current life commitments. Not everyone has the ability to give up their full-time job to pursue something of their own, but that doesn’t mean you can’t start.
For example, it is possible to create a business of handmade products in parallel to a full-time job, or start a blog that then becomes a business. If you’re looking for more inspiration, here are seven more ways to start a business without giving up your 9-to-5 job.
2. Identify a business idea
Finding a business idea is something you can approach systematically by relying on time-tested approaches that have worked for other entrepreneurs. Here are 12 ways to identify a product you can sell, including strategies such as:
- Exploit your personal interests. What do you like to do in your free time? Are there products you can sell that relate to your hobbies, or that address a common frustration you have?
- Research existing products. Examine product reviews to see if there are common complaints about popular products, and see if you can identify gaps in the marketplace.
- Capitalize on trends early. If you notice that a particular product seems to be popping up everywhere, or if you have a great idea to help get the most out of a popular product, you could come up with some great business ideas.
- Remember, all you need is an idea to get started. Many successful businesses were launched with an exclusive product and expanded into complementary products from there.
3. Validate your business idea
This may seem difficult, but it’s really just a matter of testing whether customers are willing to pay for your product before you spend too much time and money on it. No matter what kind of business you are starting, it is important that you validate your idea.
There are many ways to do this, some are simple and others a little more complex. Here are some tactical examples that can help you figure out how to measure market demand before you go too deep.
- Set up a store to take pre-orders.
- Launch a crowdfunding campaign.
- Create a beta version of your product or service to sell.
There are other ways to validate your product ideas, but if in doubt, start selling as soon as possible. Learning from direct customer feedback and understanding how they are using your products is invaluable when developing a small business.
Take a look at the case of PopSockets, a now ubiquitous way to confidently hold a smartphone in one hand. Initially, David Barnett designed PopSockets as a way to prevent headset cables from getting tangled. It wasn’t until he saw the students in his class using their PopSockets to better control their phones that he realized the unplanned value his customers saw in the product. That information helped PopSockets sell over 35 million units.
4. Find a brand name
Work to find a name for your business that makes it clear what you do, that is brief and memorable, and that is not in use in your industry. This is not an easy task, but it can be accomplished with a little effort and imagination.
Name generators can help you find a list of unique ideas, and there are also many proven best practices for choosing your business name that can help you build your own list.
Generally, a good name has some characteristics:
- Short and simple. Customers should be able to remember your name quickly, and the best way to do this is to avoid long names. One or two words are ideal, although three or four short words can also work if they create a memorable phrase.
- If your market research shows that everyone in your industry seems to have similar names or is based on similar elements, you should avoid them to get a name that really stands out.
- In addition to avoiding similar names, you should make sure that no competitors are using the name you want for your business. To do this, do a free trademark search in the countries where you’ll be doing business, and be sure to check Google and social networking sites as well. (The same goes for URLs, so do a domain name search before you register anything as well.) ) Even if someone hasn’t registered a trademark, in many jurisdictions they could legally challenge you using a name they’ve been using to do business in the same industry. If you are in doubt, consult independent legal counsel for advice specific to your situation.
5. Make a business plan
Writing a business plan helps to validate and formalize your idea, and can speed up the process of creating the business by inviting you to sit down and think things through methodically.
A classic quote that applies especially to the business plan development process is: “Plans are worthless, but planning is everything. Many entrepreneurs say that they rarely look at their plan once they have opened their business, but they will also tell you that there is value in thinking about and researching your idea while developing the plan.
If you have never done so before, here is a complete guide to writing a business plan and a business plan template to help you structure your thoughts.
When creating your plan, be sure to pay special attention to the sections on competitive analysis and SWOT analysis. While nothing can replace the validation of your idea by confirming that people will pay for it, the research needed to complete these sections can be further proof that you are on the right track.
6. Understand the finances of the business
The shared goal of any business is to make money, so fully understanding cash flow is an integral part of running a business. In this sense, you must understand some basic concepts to start and scale that knowledge as you grow.
There are many businesses you can start with only a small initial investment, but others will require money for inventory, equipment or physical space. Therefore, it is essential to have a clear vision of your total investment before spending a penny, as it will help you make important projections, such as when you will reach your break-even point.
It is essential to have a clear vision of your total investment, before spending a penny
If those calculations show that you need more funds than you can spend out of pocket, you may want to consider financing options such as a small business loan or a crowdfunding campaign.
Accounting should be one of your main financial tasks as soon as you are ready to start shopping for your business. Keeping accurate records of your income and expenses will help you control cash flow and make a smooth transition to working with an accountant or bookkeeper later on.
To make the process even easier, consider opening a bank account and having a credit card specifically for your business. Keeping your personal and business finances separate makes it easier to prepare your business taxes and can also help automate some of the steps.
- Shopify Capital (only available to U.S. merchants). Helps selected merchants get the funds they need, without lengthy bank approvals or giving up part of their business.
- Profit First. A book designed to help ensure that your business is profitable, no matter what type of business you have.
- Tools for accounting. Applications that work directly with Shopify to optimize your accounting processes.
7. Develop your product or service
You’ve done the groundwork and understand the finances, now it’s time to dig deeper into the product or service you’d like to offer.
For a product-oriented business, developing your idea might mean taking one of these three general approaches:
- Creating your own product. Whether you are creating handmade items or looking for an original product from a manufacturer, developing your own product to sell can help you stand out in the marketplace.
- Customize an existing product. With print on demand options, you can add your unique designs and ideas to products that include t-shirts, leggings, towels, backpacks and more.
- Cure a selection of products. Dropshipping is a way to stock your store without creating a new product, so you can start selling almost immediately without having to manage inventory.
As you develop your product, consider your total costs when calculating your prices. While the pricing of your product is not solely based on costs, and there are many factors that influence your pricing strategy, it is important to price your product profitably.
8. Choose a business structure
Your business structure influences the key parts of your business, from taxes to operations and your personal responsibility. Choosing the right structure for your business will help balance the legal and financial protections you need with the flexibility that different options offer. It is an important decision that you should consider carefully before launching your business.
Choosing the right structure for your business will help balance the legal and financial protections you need with the flexibility offered by different options.
Business structures vary by country and area, but two common types, which may have different names in your country, are sole proprietorship and corporation. A sole proprietorship is excellent if you are the only person involved in the business, and it is usually the structure that requires the least effort, but you are still personally responsible for the business and its activities. You can even hire employees as sole proprietors, but you will need an employer identification number to do so, which means registering your business.
On the other hand, if you opt for a more formal structure such as a corporation it is easier to involve several owners in the business, and you will not be personally responsible for the business, but there is more paperwork and steps involved in starting and maintaining a partnership.
When it comes to choosing a business structure, there are some factors to consider.
- Where is your business located? The laws of your country describe the different business structures you can form, and whether or not you need a business license to start.
- What kind of business do you have? Some structures are more suitable for businesses of a certain scale or within particular industries. There may come a time when you need to restructure your business to work with new partners. It is not uncommon for large companies to ask their suppliers or partners to have formed partnerships, for example.
- How many people are involved? If you go it alone as a sole founder you may be able to consider streamlined options. If you have a business partner or several people with ownership in the company, you will need to look at more advanced options to ensure that everything is set up and shared properly.
An accountant or lawyer can be helpful in evaluating the different options available in your area and helping you with the process of establishing your business.
9. Research licenses and regulations
No one wants to get into legal trouble. Remember that your business is subject to the laws governing business in your area, as well as the specific laws and regulations of your industry. For example, a food service company needs to follow specific licenses and regulations for handling the products it sells, but it must also pay attention to the legality of its marketing efforts and to trademark and copyright laws, among others.
Invest time and money to obtain timely legal advice from an attorney, who will be able to guide you according to the specifics of your business, such as industry and geographic location, before you start, so that you avoid future headaches.
10. Select your software systems
One of the best ways to reduce the hard work involved in running a business and prepare for future success is to choose software that helps you automate or streamline the things you need to do.
Often, when you choose the right software systems, you can set them up once and get them working efficiently with little effort. Consider finding software that helps you manage the following tasks:
- Accounting software: With multiple options to help you keep track of everything from a meal with your business partner to a large inventory order, accounting software is one of the best ways to get your business off on the right foot.
- Email marketing: A good email marketing tool will help you stay in touch with your current (and future) customers and ensure that you can send the right messages to the right people at the right time.
- Marketing software: Paying for ads is often an inherent cost of business, especially for online business, but there is marketing software that can help speed up the process and make the most of your advertising budget, no matter how much you have to spend.
- Project management. Even if you are the only owner, having a place to plan your work and follow up on important tasks can help you meet your work schedule. Tools such as Trello and Asana can help.
- Website or online store. Choose a platform that allows you to easily manage all the critical tasks involved in running your business. Look for a theme according to your product lines, and that allows you to take and manage orders easily. To give you an idea of what to do, here is a complete store launch checklist.
11. Find a location for your business
Your business plan will help guide what kind of space you need for your business. If you sell on-demand printed T-shirts, you may only need to find a place in your home to create a small work space, a desk and a laptop. On the other hand, if your business requires physical commercial space, you will need to find a place to rent.
To help narrow down what you need from your business location, consider asking yourself these questions:
- How much space will I need for inventory? If you agree to receive thousands of items at a time, you may not be able to accommodate them in your living room.
- Will I be offering retail sales in person? While selling in your home may be an option for your first orders, if selling in person is an important channel, you’ll need a comfortable, easily accessible space for customers to visit.
- How do I pack and ship orders from my location? Depending on the size of your shipping operation, you may need more space than you have available in a home office.
You may be able to manage your business from a space you already have available, especially if you do not plan to sell in person. If that’s the case, here are some design ideas for a home office that will help you create an effective workspace as your business takes off.
12. Plan your workload and team size
How much work will you need to do and what skills will be needed to launch your business? These are fundamental questions that you will need to answer, as they will guide the timeline and investment for the launch.
If you plan to do all the work yourself, you will be limited to the time you have available; if you plan to hire help, you will need to account for those costs, as well as the time needed to find and hire freelancers or employees.
Here is an overview of the basic skills you will need to learn, know, or hire when you launch your business.
There are many design decisions you must make when setting up your business, from designing a logo to choosing your brand colors. There are tools available to help you make some initial decisions and guide you in the right direction.
- You can use a logo creator like Hatchful or online image software like Canva to create your logo.
- Start with one of the many online tools that can create a color palette, or use Hatchful to choose colors for your brand.
- Website design. Using a professional theme for your website allows you to get a site based on best design practices.
If taking on shop design on your own is too far outside your area of expertise, you can find professional designers by asking for references from other business owners, or find a Shopify expert.
Quality photos are essential to your business, especially if you are selling online, but that doesn’t necessarily mean you can’t take photos of your products yourself.
There are also templates you can use to simulate product designs, like these mockups of T-shirts and shirts.
Marketing is an integral part of your business that requires a set of skills. So start by determining which marketing activities will have the greatest impact on your new business, and use your plans to make a list of the skills you will need to execute them. For example, running paid ads requires different lifestyle photography skills to develop your Instagram fan base.
Research and understand some of the most common promotional tactics used in your industry, and make sure you have the skills necessary to implement them.
Once you receive an order, how will the products get from point A to point B? Make sure you have a shipping strategy that covers key details such as
- Will you offer free or discounted shipping to your customers, or will you transfer the exact cost to them? This is a decision that affects many parts of your business, so it’s important to crunch the numbers and weigh the options.
- Lighter packaging often means lower shipping costs, but you’ll need to find a balance between weight and protection. Cardboard, although heavy, protects many products better than a polyethylene envelope.
- Will you be shipping internationally, nationally, or just locally? The answer will depend on your products and your goals, and may change as your business grows.
Whatever your shipping strategy, Shopify Shipping (only available to US and Canadian merchants) is here to help you with negotiated rates with USPS, UPS and DHL in the US, and Canada Post in Canada.
For more information on preparing and shipping goods, don’t miss our free guide:
Hire help for your business
If you don’t have the time or ability to do everything you need for your business, get help. You can find a virtual assistant for continuous, routine tasks, or work with an expert for more complex projects, such as creating your website or your marketing plan.
Manage your workload
Once you have a good understanding of the tasks to be performed and who will perform them, it is time to add a little project management to make your life easier. Consider using a time management tool such as Trello or Asana to write, assign and track tasks. These tools are especially useful for keeping your team on schedule, but don’t underestimate the value of the structure they provide for you as well.
13. Open your business
You’re ready to take the last step in starting a business: the launch. The preparation you have already done has established a solid foundation to support your launch, so you can concentrate on marketing activities and make your first sale. However, a plan of attack, especially when trying to generate traction, can help make your launch even more successful.
While every launch is unique, there are some elements that can boost the first few days of sales of any business.
- Leverage your network. Promote your store primarily on free channels that are already available to you, including your personal social networks and your contact list. Sending one-to-one emails asking for support, as well as sharing content on social networks, can be very useful in gaining traction.
- Consider offering discounts. Rewarding early customers with a discount code that fits your profit margins can help you gain traction early on, especially when your store is new and does not yet have many customer reviews or social trial points.
- Try paid ads. Even if you start with a small budget, paid ads can be one of the most effective ways to present yourself to your ideal audience. Trying out early and learning from your results can help you drive your first sales and optimize your ad’s performance as you scale.
Start a Business and Make an Impact
Starting a business is not easy, but it doesn’t have to be scary either. Whether you want to sell a product that solves a problem, build a profitable business for yourself, create opportunities for the people around you, or generate some extra money each month, these steps can help you make your dreams come true.