Skip to content

How to start a business: the ultimate guide

Starting a business comes with a long to-do list, but it’s approachable with organization and strategy. Here’s what you need to know about how to start a business, from finding your start-up money to promoting your new company.

Woman learning about how to start a business

So, you’re thinking of starting a business. Congratulations! Whether you want to start your own business from home or open a brick-and-mortar location, becoming an entrepreneur is an exciting moment.

Like any significant undertaking, it’s essential to approach entrepreneurship step by step. Here’s what you need to know about how to start a business, from funding to spreading the word about your new company. But first, let’s talk bout making this your full-time job.

Jump to:

Making the leap: Quitting your day job and committing full-time to your business

This is probably your first big decision as a new business owner. When is the right time to leave your current job and make entrepreneurship your full-time endeavor?

Practically, it’s when you have enough resources to keep you afloat until your business starts to generate income. Experts generally quote two to three years as the average amount of time for a company to become profitable, but “profit” doesn’t necessarily translate to a living wage for the business owner.

That said, learning how to start a small business takes time. Eventually, you’ll need to commit full-time. If you see that day on the horizon, start saving money for your living expenses before you can pay yourself a good salary.

Meanwhile, take time to research your new business and its viability. The Harvard Business Review recommends looking at factors such as:

  • What problems you would solve for consumers
  • Whether enough people need your product or service
  • What competing products and services are available
  • What gaps there are in the competition’s offerings
  • How much you could charge

The best way to get these answers is by talking to professionals in the field you plan to enter. They have the answers and connections you want to make headway in an industry.

Pro tip

Once you’re ready to start your independent business, make sure you submit a professional resignation letter that doesn’t burn any bridges. Even if you’re heading in a different direction, former colleagues and connections can be invaluable once you become a business owner. 

Determining how to fund your business

Unless you already have sizable savings you’re willing to invest in your new venture, you’ll need to find startup funding. The U.S. Small Business Administration (SBA) offers some ideas, including:

  • Personal connections: Loans or gifts from people you know
  • Crowdfunding: Money you raise in small quantities from a large number of people, usually in exchange for special perks once your business is operational
  • Small business loans: Funds borrowed from a bank or credit union that trusts your ability to repay
  • Venture capital: Funding from investors that offer startup money in exchange for an ownership share in your company

Pro tip

As a HoneyBook member, you may be eligible to HoneyBook capital. These small business loans are based on your current revenue, offering more confidence that you’ll be able to pay back the loan quickly.

If you decide to get funding from an institution like a bank or investor, you’ll probably have to submit a business plan. A business plan tells your investor or lender what you plan to do, how you intend to succeed, and where you’ll get the money to share profits or repay the loan.

Writing a business plan

A business plan is a roadmap to your future company. According to the SBA, a traditional business plan includes the following components:

  • Executive summary — what your company will do and how you’ll structure it, including who will be in charge and your desired location
  • Company description — who your target clients will be, what pain points you’ll address for them, and what qualifies you to solve those problems
  • Market analysis  — a description of your target market and how you’ll fit into it, including what competitors do and how you’ll stand out
  • Organization — what type of company you’ll be — for example, a sole proprietorship or corporation — and who will lead each aspect
  • Service or product  — what you’ll sell and how it benefits clients
  • Sales and marketing  — how you’ll reach clients, promote your products or services, and convince people to buy
  • Financial projections  —  your fiscal outlook for the next five years, including projected income and expenses, with documentation whenever possible
  • Funding requirements  —  how much you need in the next five years, and whether you’re looking for a loan or investment

The more detail you can include, the better. Investors and lenders need to know that you’ve done your research and have a solid plan for your company’s success. 

Registering your business

Some businesses must register with state or local governments before accepting clients. The requirements for registering your business depend on business structure, so you must make that decision first. 

There are five primary business structures to choose from. They are:

  • Sole proprietorship  — A one-person business that isn’t a separate legal entity, meaning that the business’s assets and liabilities are legally the owner’s.
  • Partnership  —  A business with two or more owners, some of whom may have limited liability for business debts. 
  • C Corporation —  A distinct legal entity that pays corporate taxes, is liable for its debts, and can retain its profits
  • S Corporation —  A company that is its own entity but can pass tax responsibilities to owners
  • Limited liability company (LLC)  —  A business that separates the owner’s assets from the company’s but isn’t a separate taxpaying entity

A sole proprietorship is usually the simplest structure since you don’t have to file any special paperwork. Just start doing business, and you’re a sole proprietor. If you want to explore other options, consider contacting a business attorney.

Creating your brand

Branding is how your business interacts with the world. Think of it as your business’s identity — what you say, how you say it, what you look like, and how people perceive you.

Developing a brand from scratch seems like a big job, but don’t worry. You probably have a few ideas already; the rest will come from there.

Mission and values

Start with your brand’s mission statement and values. Ask yourself what you want your business to accomplish and how it will serve its buyer community. For example, you might start a bakery to provide busy families with lovingly prepared treats. 

You realize your core values are fresh ingredients, classic recipes, and a down-home aesthetic. You can already see the brand’s personality starting to develop. 

When in doubt, tell a story. Think about what inspired you to start your business and how you learned to do what you do. For instance, perhaps your grandmother taught you to bake when you were little, and you developed recipes based on hers. That story is part of your brand journey and, in turn, part of its identity.

Brand aesthetics

Next, consider how you can express your brand’s personality visually. Consider different color schemes and what feels the most authentic. For instance, would you rather use cool colors or a lot of contrast? Thinking about color will help you decide on other elements of your visuals, such as a business logo.

Another part of branding is how your business “speaks.” Marketers call this your brand voice. It’s the language you’ll use on your website, in marketing messages, and anywhere else your business talks to audiences.

Start with the core brand values you identified earlier. Given your mission and what you believe, how would you talk to audiences? IT can help to think in terms of opposites. For example, which word in each of the following pairs best describes your brand: 

  • Serious or lighthearted
  • Professional or casual
  • Bold or gentle
  • Traditional or contemporary
  • Optimistic or cautious
  • Respectful or edgy

When in doubt, write a sentence in two different styles. One will sound right. For example, something gentle like “all the love of Grandma’s kitchen” would express the home-baked goodness aesthetic better than a more direct “You ain’t seen cupcakes like these in a while.”

Brand consistency

Consistency is probably the most essential element of branding, so settle on an image and voice that feel right. Audiences get to know you based on your brand, and they feel more comfortable when they know what to expect.

That comfort translates into strong client relationships and, eventually, more sales. According to research from Marq, formerly Lucidpress, brand consistency can boost a company’s revenue by as much as 20%. Be reliable in how you communicate, and people will respond.

Developing a marketing strategy

Your brand identity is the foundation of your marketing journey. In other words, you’ve chosen your outfit, and now it’s time to go out on the town. But first, you need to know who to impress.

Research your target market

Communication is always more successful when you know who you’re talking to. When you’re a business owner, that means identifying your ideal client — what your potential buyers have in common, how they choose products, and what makes them different from consumers you’re less suited to serving.

Start by looking at what problems your product or service solves. Consider who faces those problems and what your clients might have in common. For example, if you plan to open a bakery in your downtown area, who do you picture walking through the door?

When in doubt, look at your competitors’ clients and describe them. This process can involve browsing a competitor’s social media followers to Googling “target market for (your industry).” 

Identify your unique selling proposition

The more you know about your market, the better you can answer that all-important question — What makes your business unique?

The answer to that question is your unique selling proposition or USP. Your USP is what you offer that’s better or different than anyone else on the market. Some businesses’ USPs relate to product features or service types. Others center on client care.

Everything depends on what your clients value and how you meet those needs. Take the shoe and clothing retailer TOMS, for example. Many companies offer comfortable canvas shoes, but TOMS has made a name for itself by investing one-third of its profits in grassroots organizations.

Your USP will be the center of your marketing strategy. You may promote different aspects of your business at different times, but everything will ultimately return to your USP.

Develop your marketing mix

Once you have a USP, you can start to develop your marketing mix. You might also hear this referred to as the “four P’s” of marketing:

  • Product  —  how you’ll explain and define your product or service based on your USP 
  • Price:  — what your product or service will cost and how you will frame its value — for example, emphasizing the luxury nature of a high-end item
  • Place  — where you’ll sell, including whether you’ll sell online or in person, and what value that location offers
  • Promotion  —  how and where you’ll market your business, including the channels you’ll use and how you’ll approach various campaigns

Are you surprised that promotion comes last? It does seem like the bulk of marketing, but remember — before you market, you need to have a message and understand what’s behind it.

For instance, to write effective website content, you need to know how you’ll describe your product. 

Create a budget

The Entrepreneur’s Handbook recommends setting your marketing budget based on where the funds come from. If you self-fund, you might not be able to afford more than 10% to 40% of your expected revenue on marketing. If you have investors, you might be able to manage 30% to 50%.

Your spending numbers will vary based on your ambitions and the competition in your market. If you’re entering a competitive industry, you might need to spend more to rise above the noise. 

Also, some marketing methods cost more than others. If you don’t have much extra to spend on marketing, you may decide to focus more on channels you already own, such as blogging and email marketing. Google Ads and social media ads are also helpful for new businesses because you can set spending limits through those platforms.

Make a marketing calendar

By now, you’re nearly ready to start creating marketing content. The only task left is to plan when you’ll run each campaign and what it will contain. 

This step is essential for keeping your marketing organized and professional. It helps you release the right messages in the correct order and choose the channels that will best reach your target audience. 

Choosing the right tools to manage your business

Whether you’re looking at how to start a business online or offline, technology will likely play a part in your success. Instead of doing everything manually, today’s thriving businesses use software programs to automate manual tasks and keep information organized. Some of these tools include:

  • Project and task management platforms
  • Digital marketing software
  • Client relationship management systems
  • Communication and collaboration software
  • Bookkeeping and invoicing systems

The more tasks you can complete with one platform, the better. Cover more of your bases with an all-in-one clientflow platform like HoneyBook, which streamlines the client experience through smart automation. HoneyBook helps you find and book new clients and manage the client relationships you already have, so you can focus on building your new business.

Start your business with the right tools

Try HoneyBook for free, a clientflow platform that helps you manage your entire process of selling and delivering services.

Blog tags:

Share to:

Facebook
Twitter
LinkedIn

Related posts