Are you an entrepreneur at heart? Do you have a great business idea but don’t know how to get started? If so, this blog post is for you. Here are 8 easy steps that will teach you how to start a business so you can get up and running in no time.
Here are the small business setup categories we'll cover:
- Business name registration
- Business trademark registration
- Business entity options and where to apply
- Accounting considerations for small business
- Client Relationship Management systems (CRM)
- Social media accounts
- Content creation tools
- Outsourcing web and other design needs
- Marketing considerations
1. Register your business name
One of the first things to do when you start a small business is to choose a name. Choosing the right business name is essential. You want something business-related, yet easy enough for customers to remember.
For this article, we are going to assume you’ve already chosen your business name. If you haven’t and are stuck on what name to choose I recommend you read “Hello, My Name is Awesome” by Alexandra Watkins. It’s an excellent book to help small business owners get their name brainstorming started.
Once you’ve chosen your business name you’ll want to register it to protect your business from having a business name conflict with another organization. Registering your business name also protects you from competitors and other businesses trying to register the same name.
How you’ll register your company is determined by where you are and what kind of business entity you want to form. Once you’ve determined those factors, registration is fairly straightforward.
If you conduct business under your legal name, you won’t need to register your business at all. But if you want to ensure personal liability protection, legal benefits, and tax benefits, registering your small business name—even if it’s your given name—could be a wise idea.
Also, it might be in your best interest to get an employer identification number even if you don’t have any employees. An employer identification number is assigned by the IRS for identification. A sole proprietor can also use their social security number.
How does a small business register its name?
There are four distinct methods for a small business to register its name, each serving a different purpose. Some of these registrations may be legally required depending on the business location and structure.
Small businesses frequently use the same name for each registration type, but you aren’t necessarily required to do so.
► Business entity name registration
A business entity name registration protects you at the state level. Where you go to register depends on the state you live in. For example, in Arizona name registration is done through the Arizona Corporations Commission, whereas in California business name registration is done through the California Secretary of State.
To find where your state registers business names simply google your state, plus “how to register a business name.”
► Business trademark registration
A trademark typically protects brand names and logos used on goods and services. Business trademark registration protects you at the federal level and is done through the US Patent and Trademark Office.
Not every logo or business name needs to be registered as a trademark. Trademark law can be complicated, time-consuming, and isn’t always necessary. That being said, for some small businesses, it’s wise to do. Your best bet is to read review the US Patent and Trademark Office website and watch the informative videos on the site.
► Registering your business as a DBA
You may need to register your business as a DBA name if you are conducting business under a name other than your business entity’s legal name.
For example, when my business—an S-corp named Graphic Design Group, inc—started a wedding magazine we called it Arizona’s Finest Wedding. Even though our legal entity was Graphic Design Group, inc, it didn’t make much sense to identify as that name to our advertisers and customers. We were “doing business as” (DBA) Arizona’s Finest Wedding, so we needed to register that fact.
You will register your business entity as a DBA at the same place you registered your entity name. If you aren’t sure where you originally registered simply google your state, plus “how to register a DBA.”
► Business domain name registration
Domain name registration protects your business website address. If you’ve already purchased a domain name you probably purchased through a domain registration company. If so, your business domain name is effectively registered. Godaddy, Namecheap, and Bluehost are examples of popular domain registration (and website hosting) companies.
For more in-depth information about these four name registration categories, and to download forms, visit the US Small Business Administration.
2. Choose your business structure/entity
One of the first things a business upstart needs to do is to decide what type of business structure to establish.
Whichever business structure you choose will determine your legal structure and level of legal protection as well. It will also define which income tax return form(s) you will need to file.
There are five common forms of business structures—sole proprietorship, partnership, corporation, S corporation, and Limited Liability Company (LLC). An LLC is a business structure authorized by state law.
Click on the links below to go directly to the relevant page for each business structure on the IRS website. You can also download any necessary forms:
Quick Definitions:
Sole Proprietorship
When you start your own business you are automatically a sole proprietor. This only changes if you file the necessary forms to change it to an alternative business structure.
Partnership
A business partnership is an arrangement where two or more people or entities agree to go into business together. Partnerships can be tricky because each party may have different opinions and agendas on how to run the business.
Corporation
A corporation, also known as a C-corporation, is the default designation for a corporate entity. Under United States federal income tax law, a C-corporation is taxed separately from its owners.
S-Corporation
An S corporation, also known as an S subchapter, gives limited liability protection (similar to an LLC) and allows corporations with 100 shareholders or fewer can be taxed as a partnership.
Limited Liability Corp (LLC)
An LLC offers protection from personal liability for any of the debts that a business incurs. Sole proprietors, on the other hand, risk being personally responsible for legal claims against the business.
3. Setup your accounting
It’s important to set up your business accounting early on. You will have revenues and expenses, invoicing in most cases, and taxes to consider, and you’ll want to keep everything organized.
Keep in mind, different business structures will have different accounting methods and tax forms.
Your business entity type will impact which accounting structure you should use for tax purposes. For example, a sole proprietorship business doesn’t have investors or shareholders to report to, so business income and expenses are reported on your personal tax return.
As a small business, no matter which business entity you choose to go with, you should have a reliable accountant you can refer to even if you choose to do your business bookkeeping yourself. It’s a good idea to meet with an accountant early on for an exploratory type of meeting.
Questions for your accountant might include:
- Which business structure (entity) should I choose?
- What expenses can I deduct for business?
- What records should I keep?
- How should I keep my records organized?
- Do you recommend a particular type of accounting software?
- If I need help in my business should I hire employees or use contractors?
- Will I need to pay estimated taxes?
- How do I know how much to charge?
- Can you help me get a small business loan?
- Should I get business insurance?
- Do I need a business credit card?
- Are personal assets I add to my business deductible?
- What do you recommend to help me grow my business?
Important! Even if you choose not to hire an accountant you’ll want to be sure to set up a business bank account separate from your personal bank account. Many banks will offer a business bank account customized to your needs. The best place to start looking for one is at the bank you currently use.
What are the best accounting programs for small businesses?
There are many bookkeeping and accounting software platforms for small businesses. If you plan to work with an accountant find out from them if there’s one they prefer you to use.
Many accountants recommend their clients use Quickbooks, but depending on your business you may want to choose one more specialized for the niche you are in.
The image below shows Quickbooks 2022 pricing and benefits:
4. Choose a CRM for your business
No matter what type of business you have you will need to keep track of your customer data. A customer relationship management (CRM) system allows for this business data management.
What is a CRM?
At its basic form, a CRM can help you keep track of client contact information and other details. In a broader scope, a CRM can help a business manage multiple aspects like marketing, sales, product inventory, and more.
A business’s customer data is valuable in this age of information technology; without knowing who your customers are and what they want you will impair your ability to serve them ideally.
A CRM gives business owners insight into their clients and enables them to keep track of buying habits over time. This allows business owners to personalize future promotions or services, creating a more effective marketing strategy that ultimately reduces wasteful spending while increasing revenue.
What are the best CRMs for small businesses?
The best CRM for your business depends on many factors. When you’re weighing which CRM is best for you, HubSpot is a good place to start.
Hubspot is a CRM specifically designed for small businesses. Its main focus is providing users with an easy to use interface that gives them all the information they need in one place.
Hubspot also offers a wide range of features, including contact management, pipeline management, and automated workflows. In addition, Hubspot integrates with a variety of third-party applications, making it a versatile tool for small businesses.
5. Establish your social media presence
If you are a small business owner looking to develop your business, social media is something you need to embody. If you do not have a presence on any of these platforms, it’s time to start. Social media marketing can be a key part of your business success.
Having a social media presence is important for “social proof.” Current and prospective customers see what others are saying about your business, they view customer feedback, ratings, and how your business is doing. It builds provides credibility and builds trust. Many customers go first to social media platforms to interact with the company for questions and customer service.
Start by learning about each platform, how people interact with each of them, and then determine which ones are the best fit for your company.
Most smaller companies have a presence on 3-5 platforms on average, which is likely sufficient for your business too. “The more the merrier” doesn’t work well when you’re trying to run a small business, as social platforms can be time-consuming.
Popular social media platforms:
- YouTube
- TikTok
What is the best business social media platform?
The answer to this question depends on your business. Each business owner should consider their business goals and determine which social media platform will best serve their business needs. If you’re still unsure, start with a Facebook business page.
6. Invest in the best content creation tools
There are a variety of AI design software tools to help you create content for your website, printed materials, social media posts, and more. There are also AI writing tools to help with your written business content.
The best content creation tools, are those that help you create effective content better and faster. While artificial intelligence doesn’t do all the writing for you, it can speed up the writing process significantly. It helps kickstart your creative flow, mitigate writer’s-block, and fill in quickly on sentences and concepts you’ve started.
My all-time favorite AI writing tool is jasper.ai. It’s simple to work with, intuitive and affordable. If you can afford to go with the Boss Mode, do it. The features Boss Mode offers are well worth the money. But even the starter plan at only $29 per month will make your content creation life much easier.
7. Develop your marketing plan
Having your business structure in place is just the beginning. How do you gain and keep customers? This will be an ongoing question as your business continues to succeed and grow. Fortunately, if you find your marketing plan short on ideas I’ve created a long list of marketing ideas to help get you started! You can read it here.
8. Create your business website
Many business owners don’t have the time or expertise to set up their business website, create social media graphics, or write effective business copy.
If you need help with any of these business needs, I recommend hiring professionals who specialize in each of these categories. You can find them by searching locally or on freelancing sites like Upwork, Fivver, and 99 Designs.
Wrap up and next steps
Setting up and planning for a successful business at the start will save you time and money in the long run. Once your business setup is complete it will make it easier for you to focus on business objectives, such as attracting customers and increasing sales!
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Other topics you might like:
Best content creation tools for your business…read more
Marketing ideas you may not have thought of…read more
How to start a business (graphic designers)…read more