How to Start a Business from Scratch: 24 Steps to Becoming Operational
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There are at least 24 things that you should do when starting a new business and I will guide you through each one of them step-by-step.
I assume that you already have a business idea, and I will not be explaining how to build or expand your business in this article. These are the practical steps needed to start operations.
How to Start a Business in 24 Steps
Below are the 24 steps to starting a business
Create a simple and comprehensive business plan
Please provide a name
Purchase your domain name
Secure social media accounts
Create a brand identity
Set up a G Suite account
Build a simple, fundamental website
Get some business cards
Find a certified public accountant and a lawyer
Establish a Limited Liability Company
Obtain an Employer Identification Number (EIN)
Create a document outlining the terms and conditions of the operation
Submit the required documents to your state
Open a business bank account
Establish a payroll service for both employees and contractors
Set up QuickBooks
Establish a simple accounting system
Begin using a project management solution from the very first day
Establish an internal wiki system from the beginning
Create a Slack account
Establish a conference call number
Set up 1Password
Create a tool to keep track of subscriptions
Develop a strategic plan for the upcoming 12 months
First, define your business
1. Create a simple and concise business plan
You need to answer two important questions:
What steps do you need to take to become profitable?
How do you plan to cover the costs required to achieve profitability?
Do not think too much about this. Be practical about the effort required. Conduct thorough research and understand your figures. Write everything down, and the business plan will develop into a valuable tool and guiding principle for the first 6-12 months.
You can utilize this business plan template to begin.
2. Come up with a name
Coming up with a name can be more challenging than creating a business plan. Your name is... well, your name. It needs to be good. It doesn't have to be perfect and it doesn't have to be a fancy, made-up word like Google or Yahoo. However, you will be using this name frequently and it will likely be your URL as well.
I have written a comprehensive guide on How to Buy the RIGHT Domain Name, which you may want to take a look at. In general, here is what is important:
You need to have confidence in the name. Honestly, this is probably all that really matters. It’s definitely the most important aspect of coming up with a name. If you don’t love it, then you can’t sell it. You’re going to be selling it 24/7/365 for a long time. At least that is thI plan..
You need to choose something unique. The general rule of thumb is that if you search Google for a name and there is no established business or product already using that name.
Your name should be easy to remember, reflect your brand, and be simple. You don't want to make it any harder than it already isnot provided well-known.
You should own the .com domain of your name. This is crucial. It's surprising how many people overlook this and ignore their domain name entirely. If you want people to view your business as professional, ensure you have the .com extension.
A good process for creating a business name
Brainstorm words, concepts, ideas, beliefs, descriptors, etc.
Brainstorm names based on your initial ideas from step 1.
Check the names on Google. Remove any choices that are already an established business, especially one in your industry.
Make sure that the domain name is available for purchase. Refer to our guide on how to purchase a domain name for assistance. Don't expect to secure a domain name for $7 per year and be done with it. It is important to invest in a domain name that matches your business name. If you are on a tight budget, be creative. With some effort, you can find a great name that meets all your criteria for under $1,500.
Additional advice for generating a name
Imagine seeing your name with a logo on a large sign in your future office space.
Imagine seeing your name on a T-shirt.
Say your name out loud. “Hi, I’m [Your Name] from [Your Business Name].” How does it feel? Do you like how it sounds?
Discuss your options with others and get their input.
Take some time to think about it and let it sit for a while. Do you keep coming back to the same name?
Next, create materials for your business and marketing
3. Purchase your domain name
Once again, do not underestimate this.
Your domain name is not the place to cut corners. Choose wiselyDomain.com To purchase my domains, you can find more information on why in our review of the top domain registrars.
Depending on your business, you may use the URL as frequently as the actual name of your business. The higher your budget for your domain name, the more opportunities you will have.
4. Make sure your social media accounts are secure
It can be difficult to find a good name that is available as a .com domain. It is also unlikely that you will be able to secure exact match social media handles. Make every effort to obtain them, but if that is not possible, be creative. While your social media handles/URLs are not as critical as your website, they are still worth investing effort in.
You have the option to decide how much effort you want to invest in your social media from the beginning. You can choose to just secure the username, add a few images and details, or fully optimize your profiles. The choice is yours. For now, I recommend ensuring that you have secured the usernames.
5. Create a brand identity
It is important to have a logo, colors, fonts, and an overall aesthetic that complements your brand name. You can always make updates to your brand identity in the future, so the initial design just needs to be of good quality. 99 Designs offers a comprehensive brand identity package that is a great option. You can launch a design contest to choose from a variety of designs.
Unlike your business name, your brand identity is not set in stone. It is perfectly fine to start with a basic approach here - it does not have to be perfect (or expensive); it just needs to be completed. You can always revisit and make changes in the future - most businesses do.
6. Set up a G Suite account
G Suite is the most crucial tool for our business. I use G Suite for almost everything. My team's emails and calendars are also on G Suite. We also heavily depend on Google Drive / Docs.
You will need to set this up as soon as you have your domain name. Then you can easily set up your business accounts. As of April 1, 2019, a Basic account costs $6 per user.
7. Create a simple, fundamental website
Your website can be a significant project based on your business. In certain situations, your website could actually be the business itself. That is why the emphasis here is solely on creating a basic, foundational website.
It is beneficial to have a single-page website up and running with information about your company. From there, you can continue to expand and grow.
You can have your website set up and running in just a few minutes with Squarespace. When you're ready to create a more advanced website, it's simple to switch to WordPress by following our guide on how to make a website with WordPress.
8. Acquire some business cards
Your brand identity package from 99 Designs will include designs for business cards. You can use these designs to print business cards online through Vista Print.
This may seem like an old-fashioned concept to you, but trust me. Once you launch your business, you will be discussing it, and every person you interact with should receive a card with your contact information on it. I prefer not to include my phone number on the card, and instead write it by hand for individuals whom I genuinely want to contact me. This approach makes it simpler to distribute the cards without hesitation - and it conveys to those whom I do share my number with that I genuinely want them to reach out to me.
Now, ensure that your business is legally in order
9. Find an accountant and an attorney
This task may seem easy to procrastinate on. However, by taking proactive steps and preparing in advance, you can avoid a lot of trouble and potentially save your business. Make sure to have legal and tax professionals lined up ahead of time. There are many excellent options available, and both your accountant and attorney can work remotely.
I have not personally used it, but I have heard many good things about Upcounsel.
10. Establish a Limited Liability Company
You have the option to hire a lawyer for this task, or you can use an online legal service. Creating an LLC is straightforward, making it a great opportunity to save money by utilizing a service such as LegalNature or Legal Zoom.
11. Obtain an Employer Identification Number (EIN)
Getting your Employer Identification Number is something you can take care of along with the LLC. They typically go hand-in-hand. You’ll need that to do just about everything, including business banking.
12. Create an operating agreement
Even if you are the sole owner, it is still necessary to have an operating agreement. If there are no other individuals involved in your business, you can easily use LegalNature for this purpose. However, as your business grows and changes, it is likely that you will need to update your operating agreement in the future. If there are other individuals involved, it is recommended to seek assistance from an attorney.
13. Submit the required documents to your state authorities
If you are working with a lawyer, they can handle all of these tasks for you. Otherwise, you will need to conduct research on the specific requirements in your state, which can also vary depending on the type of business you are starting.
14. Open a business bank account
It's pretty simple. You will need your Employer Identification Number (EIN). It is usually easiest to use the same bank that you are already using for your personal accounts.
One thing to be cautious of is the upselling tactics used by many large banks. For instance, when I accepted an offer for Intuit Payroll from Bank of America, it turned out to be a bad user experience. Intuit suggested that I create a new account directly with them because they were unable to resolve some issues we were facing. They blamed Bank of America for the problems. Fortunately, this led me to explore other options and I discovered Gusto, which is a much better alternative.
The key here is to only use your bank account for banking purposes and to be cautious about using it for other offers or services.
Sign up for essential operating tools
15. Establish a payroll service for your employees and contractors
As an expert in SEO, I really like Gusto. They are very good. I use them and find the service to be superior to Intuit Payroll.
You won't need to worry about this until you start paying employees or contractors. It's good to have it ready and on deck though. Not only will the service automate your payroll, but it will also take care of taxes and forms that need to be filed.
16. Set up QuickBooks
A QuickBooks account is necessary right from the start. This is how you will handle your financial records and ensure that you always have accurate information. It is not enjoyable to go back and import historical data. The sooner you set it up, the better.
17. Establish a simple accounting system
The best option is to collaborate closely with your accountant. A recommended strategy is to consult with your accountant about the tasks you should be completing throughout the year to simplify the tax season process and ensure all quarterly requirements are fulfilled.
QuickBooks handles most of the difficult tasks, but there are still some things you will need to keep track of. Some of it overlaps with what has already been discussed hereShopify As an expert in SEO, I have created a comprehensive guide on small business accounting.
18. Begin using a project management tool from the very beginning
The most important thing is to make a habit of tracking all of your work. Even if you are the only person in your company, you should operate as if you were an organization because eventually you will have to. Another benefit, in addition to developing good habits, is the historical information and data that will be generated by working in this way from day one.
It is highly beneficial for new individuals to join your company and be able to review the work that has been completed in the past. This context will assist them (and your business) in achieving success in the future.
It doesn't matter which tool you use. You'll probably end up changing it multiple times regardless. We personally use Trello, but there are many other great tools available.
19. Establish an internal wiki system from the very beginning
Just as you should use a project management tool from the very early stages, it’s extremely valuable to start documenting everything right away.
If you ever want to grow your startup, you'll need your mind to grow as well. Your internal wiki is like your mind. Providing your future team with instant access to your mind is significant. If you already have a disciplined approach to documenting things in the wiki, your team will do the same.
It is not enjoyable to determine the value of a wiki system three years later, with 50 people involved. You will think of numerous documents that you wish you had written as you progressed.
We use Confluence.
20. Create a Slack account
Everyone enjoys using Slack. It is efficient and works well. Mobile communication is essential. There is a Free plan that is a great starting point. The next plan up costs about $7 per user per month, and it offers additional features such as guest access to different channels, more storage, and additional app connections.
21. Establish a conference call number
Many businesses will need to conduct conference calls at some point, and GoToMeeting makes it simple. You can easily join, host, or manage a video, audio, or web meeting from a conference room, your desk, or a remote location using your Mac, PC, or mobile device. Visit GoToMeeting to sign up and get started in just a few minutes.
22. Set up 1Password
By now, you are beginning to understand the common theme: Minimize potential future problems. Establish your systems now, and you will be able to concentrate on progress in the future.
1Password is a great tool for organizing all your passwords and sensitive information. It simplifies the process of securely sharing logins with your team - a crucial aspect as Centrify suggests that lost passwords can result in a loss of $416 in productivity per person.
23. Create a subscription tracker
This is a simple task, but it is often ignored. 1Password is excellent for managing your subscription logins. However, you still need a method to easily view all of your subscriptions and what you are paying for, especially as your business expands and more people are using and signing up for various tools and subscriptions.
A simple spreadsheet is all you need. Keep track of the subscription, monthly or yearly cost, terms (if applicable), payment method (which account or card is linked to it), and renewal date.
Now, plan your goals for your first year in business
24. Create a strategic plan for the next 12 months
Like your business plan, your strategic plan doesn’t need to be complicated.
Here is a guide on how to create a basic business plan for a startup in its first year
Come up with a major goal for the next 12 months.
Identify what steps you need to take to achieve your objective. What projects or tasks will you have to complete?
Determine which metrics or parameters you can use to monitor progress. Establish a system for tracking them.
Review and assess monthly. Make any necessary adjustments.
Even in a one-person business, dedicating time to this task will encourage strategic thinking and intentional action. It will prevent you from being reactive and haphazardly doing whatever tasks come your way.
It becomes even more important when you have a team that needs to know which direction to move in. They will need that context in order to perform their jobs.
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Other guides on how to start a business are often quite generic. I don't see much value in repeating what is already available, so here is a list of guides that I would recommend for more in-depth information on starting a business:
Startup Checklist by Business Know How
Guide for Entrepreneurs Starting a Business
105 Best Tools to Start Your Business