An entrepreneur’s journey is filled with opportunities and challenges. It demands a well-structured approach and a clear understanding of the processes involved in starting a new business. According to the US Small Business Administration, there are 33.2 million small businesses operating across the country as of 2022, a figure that demonstrates the exciting potential this path offers.
Although starting a business can seem daunting, the process is manageable when it’s broken down into well-defined, actionable steps. The US Bureau of Labor Statistics reports that nearly 1.4 million new businesses were created in 2022, which underscores how accessible this process can be—with the right guidance and preparation. For would-be entrepreneurs, understanding the components involved in starting a business provides a reliable foundation for transforming a business concept into a fully functioning enterprise.
This guide focuses on the practical steps of starting a business, from identifying the right business opportunity to planning for hiring and financing. Whether you’re just starting to shape your business idea or you’re ready to take your dreams to the next level, this guide offers practical advice and insights to help you launch your business.
What’s in this article?
- Identify the right opportunity
- Write a detailed business plan
- Decide on the legal structure of your business
- Create key internal documents
- Register your business
- Obtain an Employer Identification Number (EIN)
- Apply for all required licenses and permits
- Open a business bank account
- Explore startup financing options
- Apply for a business credit card
- Choose a suitable accounting software
- Understand and plan for taxes
- Protect your business with insurance
- Establish an online presence
- Set up a payment processing system
- Plan for hiring
- Consider business loans
1. Identify the right opportunity
Starting a business begins with the right business opportunity. Look for an opportunity that not only fills a gap in the market, but also aligns with your skills, interests, available time, and investment capabilities.
Skills and interests
Your skills and interests are a reflection of your natural talents and passions, educational background, and professional experiences. When you leverage your skills and interests to start your business—whether that means creating a venture around baking or computer programming or working with animals—you set yourself up for success.Available time
Every business requires a time commitment, but the amount of time can vary greatly. Evaluate what you can dedicate to your new venture, and be realistic. If you’re currently employed full time, a side business that requires a few hours a week might make more sense for you. Because businesses often demand extra time and attention in the early stages, it’s important to consider your personal and professional commitments before jumping in.Investment capabilities
The amount of money you can invest in your business plays a significant role in determining the right opportunity. Some businesses require substantial up-front investment in equipment, property, or inventory. Meanwhile others, such as many service-based or online businesses, require a smaller investment. A clear understanding of your financial resources will help you narrow down opportunities to those that are feasible for you.
Identifying the right opportunity involves introspection and analysis. Ultimately, the best business opportunities lie at the intersection of your skills, interests, availability, and financial resources.
2. Write a detailed business plan
Writing a detailed business plan is a key step in starting a new business. A business plan helps you organize your thoughts and set clear objectives, and it also serves as a road map for your business as it grows. It’s an important tool for presenting your idea to potential investors and lenders.
Business model
Your business model is the backbone of your business plan. It outlines how your business creates, delivers, and captures value. What products or services will you offer? Who are your target customers? What channels will you use to deliver these products or services? How will you generate revenue? Answering these questions will help define your business model. For example, you might sell products online, offer subscription services, or provide a platform for other sellers. Every business model has different operational and financial considerations.Strategies
Your business plan should define your strategies for marketing, sales, operations, and growth. What methods will you use to attract and retain customers? How will your business operate on a day-to-day basis? How will you manage inventory, delivery, and customer service? What will your business look like in 1 year? In 5 years? In 10? As you start and grow your business, having a clear vision and strategy is key.Financial projections
An important part of your business plan is detailing your financial projections. This section should include your initial investment, expected revenue, costs, and profitability. You should create projected income statements, cash flow statements, and balance sheets for the first three years, at least. Stay realistic while making these financial projections and consider best-case, moderate-case, and worst-case scenarios.
Creating a business plan may seem overwhelming at first. But this document is not meant to be static: it should evolve with your business as a tool to track your progress and adjust your strategies as needed. There are many resources and tools available online that can guide you in creating your business plan, including templates, guides, and software solutions.
Your business plan should be a comprehensive document that paints a clear picture of your business, its goals, and how you will achieve those goals. By defining your business model, strategies, and financial projections, you’ll have a solid foundation on which to build and grow your business.
3. Decide on the legal structure of your business
Choosing the legal structure of your business has a direct impact on what you’ll pay in taxes, the level of personal liability you’ll incur, and your ability to raise money from investors. There are several common legal structures to choose from:
Sole proprietorship
This is the simplest business structure and is ideal for individuals who own and manage their business by themselves. It’s easy to set up and offers you complete control over your business. However, in this setup, your personal assets can be at risk if the business incurs debt or legal issues.Partnership
If you’re starting a business with another person or multiple people, a partnership might be the right choice. There are different types of partnerships, but in general, each partner contributes to the business and shares in the profits and losses.Limited liability company (LLC)
An LLC provides the flexibility of a partnership or sole proprietorship, but with the liability protection of a corporation. This means that your personal assets are protected (generally) if the business incurs debt or legal judgments.Corporation
There are several types of corporations, including C corporations and S corporations. These structures are more complex, and they’re often suitable for larger businesses or those seeking investors. Corporations provide owners with the strongest protection from personal liability, but they also cost more to set up and require more extensive recordkeeping.
Understanding these structures and their implications can help you make the most informed choice for your business. Consider seeking legal advice before making this decision.
4. Create key internal documents
In addition to registering your business, you might need to create internal documents that outline how you will run your business, such as a partnership agreement or operating agreement. Creating internal documents is an integral part of establishing your business. These documents serve as a guide for detailing the management structure, decision-making processes, and operational procedures. Here are a few types of internal documents:
Partnership agreement
If you’re forming a partnership, it’s important to have a partnership agreement. This document outlines how you will distribute profits and losses, how decisions are made, what happens if a partner wants to leave the business or if a new partner wants to join, and how disputes will be resolved. It should also include provisions for what will happen to the business if a partner dies. This agreement can help prevent misunderstandings and disputes in the future.Operating agreement
For an LLC, the equivalent of a partnership agreement is an operating agreement. This document lays out the ownership and member duties of the LLC, the division of profits and losses, and other operational details. Even single-member LLCs can benefit from having an operating agreement because this document helps solidify the separation between the business and the owner’s personal assets.Bylaws
If you’re forming a corporation, bylaws are required. Bylaws outline how the corporation will be run; the roles and responsibilities of directors and officers; the processes for holding meetings and voting on company decisions; and other corporate governance matters.Employee handbook
No matter what business structure you choose, if you plan on hiring employees, an employee handbook can be a valuable tool. It sets clear expectations for your employees and helps ensure consistent treatment across your workforce. It can include details about work schedules; pay and promotions; vacation and sick leave; and other company policies on topics such as harassment and social media use.Policy and procedure manuals
These documents provide guidelines for different aspects of your business, such as customer service, product returns, and billing and collections. These manuals can help ensure operations are consistent and efficient.
Tailor these documents to your specific business and review them regularly as your business evolves. It’s a good idea to consult with a business lawyer while drafting them to ensure they’re comprehensive and comply with all relevant laws and regulations. Establishing these internal documents early in the process can help prevent confusion and conflicts down the line.
5. Register your business
After deciding on the most appropriate structure, you’ll need to register your business with the relevant government bodies. Typically, the registration process involves filing paperwork with your state’s secretary of state office and paying a fee.
Registering your business is a key step in legitimizing your venture and making it a distinct legal entity. This process involves several elements, including deciding on a business name, determining the location of your business, and registering with different government agencies.
Business name
Your business name is what you’ll use on all government forms and applications. It’s also your brand identity. Make sure your desired business name is unique and not currently in use or trademarked by another company. This usually involves conducting a name search in your state’s business database. If you plan to operate your business under a different name from your legal business name (a “doing business as” name, or DBA), you’ll need to register that, too.Business location
To register your business, you must also provide a physical location. This might be your home address if you’re running a home-based business, or a commercial address if you’re operating from an office, retail, or industrial space. The location you register will affect your tax and legal requirements.Federal registration
In most cases, you’ll need to apply for a Federal Tax ID, also known as an Employer Identification Number (EIN). The EIN is like a Social Security number for your business and is required for corporations and LLCs. You’ll need an EIN to hire employees, open a business bank account, and file business tax returns. We’ll look at EINs in more detail below.State registration
Business registration requirements can vary significantly from state to state. Typically, if you’re forming an LLC or corporation, you’ll need to register with the state agency responsible for business filings, usually the secretary of state. Registering typically involves filing articles of organization (for an LLC) or articles of incorporation (for a corporation) and paying a filing fee.Local registration
Depending on where your business is based, you might also need to register your business at the county or city level, often by obtaining a business license or permit.
Registering your business can seem like a complex process, but it’s a key step in starting your venture. It provides your business with legal recognition, ensures you’re paying the correct taxes, and helps protect your personal assets. Consider consulting with a business advisor or attorney to ensure you’ve covered all your bases.
6. Obtain an Employer Identification Number (EIN)
Obtaining an Employer Identification Number (EIN), sometimes referred to as a Federal Tax Identification Number, is an important step in setting up your new business. An EIN is a unique nine-digit identification number that the Internal Revenue Service (IRS) assigns to businesses operating in the United States.
Getting an EIN is a simple yet necessary step that supports many aspects of your business operations, including banking, tax filing, and employee management. This process is straightforward—and free—so it should be one of the early steps you undertake in your business journey. Here’s why your business needs an EIN, and how you can get one:
Why you need an EIN
Corporations, partnerships, and limited liability companies (LLCs) need an EIN. If you’re a sole proprietor, you might not need one unless you have employees or meet other IRS criteria. You need an EIN to open a business bank account, apply for business licenses and permits, file a tax return, and hire employees, among other important tasks. Using an EIN instead of your personal Social Security number can offer added security by reducing the risk of identity theft.
How to obtain an EIN
You can apply for an EIN directly from the IRS. The fastest way is to apply online on the IRS website, but you can also apply by fax, mail, or by phone (for international applicants). The application involves filling out Form SS-4, which asks for information such as your business’s name, address, and business type.
If you apply online, you’ll receive your EIN immediately after your information is validated. For fax applications, it typically takes about four business days to receive your EIN, and mail applications can take up to four weeks.
Once the IRS assigns your business an EIN, that number is never reissued or reused. However, if your business changes its structure (e.g., from a sole proprietorship to an LLC) or ownership, you might need to obtain a new EIN. Applying for and obtaining an EIN is free.
7. Apply for all required licenses and permits
Applying for necessary licenses and permits is a fundamental aspect of launching your business. These licenses and permits will allow your business to operate within the legal framework of your region while helping you build credibility and trust with your clients and customers. The specific licenses and permits you require will depend on the nature of your business; your business location; and the regulations of your local, state, and federal authorities. Here’s a look at the overall process:
Identify the necessary licenses and permits: First, you’ll need to determine which licenses and permits apply to your business. Some common types include a general business operation license, professional licenses (for certain professions, such as cosmetology or architecture), health department permits for businesses that handle food, and sign permits for physical storefronts. Businesses that sell specific products, such as alcohol or firearms, may need special licenses.
Research regulations: Familiarize yourself with local, state, and federal regulations. Your city or county government website is a good place to start for local requirements. For state and federal permits and licenses, you can consult resources such as the Small Business Administration’s (SBA) guide to federal licenses and permits and your state’s official government website.
Apply for licenses and permits: Once you’ve determined which licenses and permits you need, the next step is to apply. This involves filling out application paperwork, paying fees, and occasionally undergoing inspections or tests to ensure your business complies with regulatory standards. Note that the processing time for these applications can vary, so apply well before you plan to start operations.
Maintain compliance: After obtaining your licenses and permits, keep them up to date and renew them as needed. Some licenses and permits expire after a certain period and require renewal. Failing to renew them can result in penalties or even the closure of your business.
Consider professional assistance: If you’re confused about the licensing process or want to make sure you’re covering all your bases, consider hiring a business attorney or a certified public accountant (CPA) who can ensure your business meets all legal requirements.
Applying for licenses and permits requires careful research, time, and resources. It’s a key step that legitimizes your business and ensures it complies with local, state, and federal regulations.
8. Open a business bank account
Opening a dedicated bank account for your business helps you manage your finances effectively while maintaining a clear line between personal and business finances. Here’s more on why a business bank account is important, and how you can open one:
Why you need a business bank account
There are several reasons why having a business bank account will help your business:
Separation of personal and business finances
Separating your personal and business finances helps simplify accounting, tax preparation, and financial management. A business bank account provides clear, accurate records of income and expenses for your business, which can be invaluable during tax season and when analyzing financial performance.Professionalism
Using a business account can enhance your credibility with clients and suppliers, particularly when you issue and receive payments. It sends a message that your venture is legitimate and established.Asset protection
For LLCs or corporations, keeping business and personal finances separate is necessary to maintain the personal liability protection these structures offer.Easier to secure business loans or credit
A business bank account helps establish a banking history for your business, which can be beneficial when you’re applying for business loans or credit.
How to open a business bank account
The process varies depending on the bank, but here are the general steps to follow:
Choose the right bank for your needs: Consider factors such as the bank’s reputation, the convenience of its branch locations, its customer service, the types of accounts it offers, any fees associated with its accounts, and any additional services it provides that your business might need.
Gather the necessary documentation: The exact documents you will need depend on your business’s legal structure. Typically, banks require your business’s EIN, the legal documents registering your business, and personal identification, among other documents.
Choose the right type of business bank account: Depending on your needs, you can choose from different types of business accounts such as business checking accounts, business savings accounts, and merchant services accounts.
Open the account in person or online: Some banks allow you to open a business bank account online, while others might require you to visit a branch in person.
Opening a business bank account is an important step that provides many benefits, from simplifying accounting to legitimizing your business. Make sure to compare and choose the bank and account type to suit your business’s unique needs.
9. Explore startup financing options
Depending on the nature of your business, you may require significant funding to get started. From buying inventory to hiring staff, renting office space, and purchasing essential equipment, startup costs can quickly accumulate. Therefore, identifying potential financing sources is an important part of your planning process. Here’s more about why you need to explore different options, and some potential financing sources:
Why exploring financing options is necessary
Whether you’re purchasing raw materials, renting a brick-and-mortar location, paying for marketing, or covering daily operating expenses, starting a business usually involves substantial initial costs. Understanding different financing options can help you find the most cost-effective way to raise the necessary capital, manage cash flow effectively, and minimize financial risks.
Potential financing options
Self-financing
For many entrepreneurs, the first place to look for funds is their personal savings. Self-financing offers you full control over the business, but it can pose a substantial personal financial risk.Friends and family
Friends and family might be able to provide funding in the form of loans, often with lower interest rates than those that traditional financial institutions offer. However, this method has the potential to strain personal relationships.Crowdfunding
Platforms such as Kickstarter and Indiegogo allow entrepreneurs to raise small amounts of funding from many people, often in exchange for rewards or equity.Angel investors and venture capitalists
These are individuals or firms that invest in businesses in return for equity. Typically, angel investors support early-stage businesses, while venture capitalists invest larger amounts in companies with proven growth potential.Loans and credit lines
Banks and other financial institutions offer different types of loan products and credit lines for businesses. This could include term loans, business lines of credit, or equipment financing.Grants
Depending on your business, you might be eligible for grants from government entities, nonprofit organizations, and corporations. Often, these opportunities are available for businesses in specific industries, or those that are led by individuals from certain underprivileged backgrounds or that serve specific communities.Trade credit
Suppliers may offer trade credit, which allows you to delay payment for goods or services, thus freeing up cash for other immediate expenses.
Exploring startup financing options is a key step in launching a new business. The financing option that works best will depend on your business model, your financial situation, and your long-term business goals. Consider seeking advice from a financial advisor to help you decide.
10. Apply for a business credit card
Business credit cards can help you manage your company’s finances, separate your business and personal expenses, build your company’s credit history, and even provide you with valuable rewards. Here’s a closer look at this step.
Benefits of having a business credit card
Separation of business and personal expenses
A business credit card helps you differentiate business expenses from personal expenses. This separation is important for accurate bookkeeping and tax preparation.Building business credit history
Using a business credit card regularly—and making timely payments—can help you build a strong credit history for your business. This can be beneficial when applying for business loans or additional credit in the future.Cash flow management
Like regular credit cards, business credit cards often offer a grace period between when you make a purchase and when payment is due. This delay can help with managing cash flow, especially if you’re waiting for customer payments or dealing with uneven income.Rewards and perks
Many business credit cards offer rewards such as cash back, travel points, or discounts on business-related purchases.
Key considerations when applying for a business credit card
Interest rate
Like any credit card, business credit cards come with interest rates. Look for a card with a low annual percentage rate (APR) if you think you’ll carry a balance.Fees
Some cards come with annual fees, late fees, and other costs. Make sure you’re aware of all potential charges before selecting a card.Credit limit
Depending on the size and spending needs of your business, you’ll want to consider cards that offer appropriate credit limits.Reward structure
If you’re interested in earning rewards from your business spending, compare the reward structures of different cards. Some may offer higher rewards for categories that align with your business expenses.Repayment terms
Ensure you understand the card’s repayment terms, including the grace period and minimum payment requirements.
Applying for a business credit card usually requires providing your business information, such as your EIN, personal information, and possibly your personal credit history. As always, it’s important to use credit responsibly, making purchases your business can afford and paying off your balance promptly to avoid unnecessary debt and interest charges.
11. Choose a suitable accounting software
Choosing the right accounting software helps you with tracking income and expenses, preparing financial statements, forecasting, budgeting, invoicing, and tax filing. Here’s an in-depth look at this step.
Benefits of working with strong accounting software
Efficiency
Automated accounting software can save you hours of manual bookkeeping. In addition to tracking sales and taking care of expenses, this software can connect directly to your business bank account and credit card to download transactions.Accuracy
Accounting software reduces the risk of human error. Automated calculations based on the latest tax regulations ensure accuracy and compliance.Financial monitoring
By keeping your financial data organized and in one place, accounting software helps you monitor the financial health of your business in real time. You can easily generate different types of reports, such as profit and loss statements, balance sheets, and cash flow forecasts.Scalability
As your business grows, so will your financial management needs. Many types of accounting software offer different tiers or plans, allowing you to scale up your plan as needed.
Important considerations to keep in mind when choosing accounting software
Ease of use
The software you choose should be intuitive and easy to navigate. You and your staff should be able to perform tasks quickly and efficiently, without needing extensive training.Features
Identify the features that are most important for your business. This could include income and expense tracking, invoicing, payroll integration, tax preparation, multiuser access, mobile accessibility, and reporting capabilities.Pricing
The cost of accounting software can vary greatly. Consider the software’s pricing structure (monthly fee, annual subscription, per-user cost) and the features it offers, and compare that against your budget.Integration
Check if the software integrates well with other systems that you use in your business, such as your point-of-sale system, credit card processing, and inventory management.Support
Make sure that the software provider offers sufficient support via tutorials, a knowledge base, live chat, email, or phone support.Security
Since protecting your financial information and data is imperative, check that the software has strong security measures in place.
Several excellent accounting software options exist for small businesses, including QuickBooks, Xero, FreshBooks, Zoho Books, and Wave. Many offer a free trial, so you can test them to see which one fits your business needs best. What works for one business might not work for another, so evaluate your business’s needs carefully.
12. Understand and plan for taxes
Understanding and planning for taxes is an indispensable part of starting a business. Ensuring you’re compliant with all relevant tax laws and taking advantage of available deductions and credits can save you a significant amount of money—and potential legal headaches—in the future.
Here are the key aspects of understanding and planning for taxes
Business structure and tax implications
The structure of your business (sole proprietorship, partnership, LLC, corporation) will determine the type of tax return form you file. It will also affect how you pay yourself and what taxes you pay. For example, a corporation might be subject to “double taxation” (profits are taxed at the corporate level and again when distributed as dividends), while an LLC can provide the advantage of pass-through taxation (profits are not taxed at the corporate level, but rather pass through to shareholders’ personal tax returns).Tax obligations
Depending on your business, you may need to pay a variety of taxes: income tax, self-employment tax, payroll tax, sales tax, property tax, and possibly others. Research your obligations under federal, state, and local laws.Estimated tax payments
If you’re self-employed or a business owner, you will probably need to make estimated tax payments quarterly. These are prepayments on the income tax and self-employment tax that you expect to owe for the year.Tax deductions and credits
Several tax deductions and credits are available to businesses, and taking advantage of these can significantly reduce your tax burden. Common deductions include home office expenses, business travel, advertising costs, and the cost of goods sold.
Steps to plan for taxes effectively
Keep detailed records: Detailed, accurate recordkeeping is the foundation of good tax planning. Keep track of all business expenses, revenues, and receipts. This will make it easier to claim all eligible deductions and provide documentation in case of an audit.
Understand deadlines: Mark all relevant tax deadlines on your calendar to avoid penalties for late payment. Different types of taxes may have different due dates.
Consult with a professional: Tax laws can be complex, and missing a deduction or making an error can be costly. Consider consulting with a tax advisor or CPA, especially when you’re starting your business. They can help you navigate the tax landscape and develop a plan to minimize your tax liability.
Plan for your tax bill: Taxes are an expense like any other, so factor them into your budget. This can help you avoid unpleasant surprises during tax season.
Stay informed: Tax laws change regularly. Use resources from the IRS and your state’s tax department to stay up to date on the latest changes that might affect your business. If you use a tax advisor, they will be an important source of information as well.
Understanding and planning for taxes lets you manage your business’s financial resources in a strategic way that promotes growth and sustainability.
13. Protect your business with insurance
Establishing a business comes with its share of risks—financial, operational, legal, and personal. Choosing the right insurance can help protect your business against these risks.
At first glance, insurance might seem like just another expense in your long list of startup costs, but the value it offers is immense. For many businesses, the costs associated with a single accident, lawsuit, or natural disaster could be devastating. The right insurance coverage can offer you peace of mind and let you focus on what matters most: growing your business.
Here are some common types of insurance you might consider
General liability insurance
This type of insurance is fundamental for every business. It covers legal costs and payouts if you’re sued for things such as alleged negligence, personal injury, or property damage. For example, if a customer slips and falls in your store and sues, general liability insurance would cover their medical costs and any legal costs.Property insurance
Property insurance is important if you own or lease a physical space for your business. This insurance covers the building and its contents—such as inventory, equipment, and furniture—from damage due to events such as fires, storms, and theft.Workers’ compensation insurance
If you plan on hiring employees, you’ll need workers’ compensation insurance. It covers medical treatment, disability, and death benefits if an employee is injured or dies as a result of their work.Professional liability insurance
Also known as errors and omissions (E&O) insurance, this covers your business against negligence claims due to harm that results from mistakes or failure to perform. This is particularly relevant for businesses that provide services.Product liability insurance
If your business manufactures or sells physical products, consider product liability insurance. This covers you if one of your products causes injury or harm.Business interruption insurance
This type of insurance compensates you for lost income if your business can’t operate as usual due to an unexpected event such as a fire or natural disaster.
Steps to secure appropriate business insurance
Evaluate your risk: Identify the risks your business could face. This depends on the nature of your business, its location, the number of employees, etc. A local insurance agent or broker can help with this assessment.
Shop around: Insurance policies vary in cost and coverage. Secure quotes from different insurance companies so you can understand what each policy covers—and excludes—before making a decision.
Consider a business owner’s policy (BOP): A BOP combines general liability insurance and property insurance into one policy and often costs less than purchasing the two policies separately.
Review your policy annually: As your business grows and evolves, your insurance needs can change. Review your policies annually, or whenever significant changes occur in your business.
Consult with professionals: Insurance can be complex, and the right coverage for your business can depend on many factors. Consider seeking advice from an insurance professional who is familiar with your industry and can guide you toward suitable coverage.
While insurance requires an up-front cost, the financial protection it provides can be invaluable. The right insurance allows your business to weather severe losses—and even bankruptcy—in the face of a significant event or lawsuit.
14. Establish an online presence
Establishing an online presence is an important part of starting a new business. Your online presence is the primary interface between your business and potential customers. This is a key way to reach your audience, showcase your products or services, and establish your brand. Here’s how to get started:
Develop a professional website: The first step in establishing an online presence is creating a professional website. Your website acts as the face of your business, so it should be easy to navigate and fast to load, aesthetically pleasing, and contain relevant information about your products or services. Your website should also be mobile-friendly.
Choose a domain name: When choosing a domain name, make sure it aligns with your brand and is easy for your customers to remember.
Carve out a strong presence on social media: Social media platforms help you engage with your customers and build a community around your brand. Depending on your target audience, you might want to establish a presence on platforms such as Facebook, Instagram, X (formerly Twitter), LinkedIn, Pinterest, or TikTok. Regularly post content that resonates with your audience and reflects your brand’s personality. Engage with your followers by responding to comments and messages.
List your business on online directories: Online directories can help improve your visibility, particularly in local searches. Platforms such as Google’s Business Profile, Yelp, and Bing’s Places for Business allow you to list your business’s name, address, contact information, and more. Make sure to keep this information up to date.
Manage your online reputation: Be proactive in monitoring and managing your online reputation. This means keeping an eye on reviews and social media mentions, and responding to them in a timely and professional manner. Good reputation management can help build trust with your customers.
Establishing an online presence is an ongoing process. As your business evolves, you’ll need to update and adapt your online presence to reflect changes in your business and market.
15. Set up a payment processing system
Setting up a payment processing system is a key step for businesses, particularly for those that operate online. This system allows your business to accept and process customer payments via credit cards, debit cards, digital wallets, and other electronic payment forms. Here’s a step-by-step guide for setting up a payment processing system:
Determine your needs: Before setting up a payment system, evaluate the needs of your business and customers. Do you need to process payments both online and in a physical store? What payment methods do your customers prefer? Answering these questions can help you decide what type of payment processing solution is the best choice for your business.
Explore your options: There are different types of payment processors to choose from, each offering different pricing models, features, and types of accepted payments. Research and compare different options based on their fees, ease of use, customer support, and integration with your existing systems. Learn more about how Stripe powers payments for businesses of all sizes.
Obtain a merchant account or merchant account functionality: A merchant account is a type of bank account that allows your business to accept credit and debit card transactions. Some payment processing providers—such as Stripe—extend merchant account functionality to businesses as part of their service, while others require you to open one independently.
Set up your hardware and software: If you have a physical store, you’ll need to set up hardware such as card readers or point-of-sale (POS) systems. For online transactions, you’ll need to integrate the payment processor’s software or API into your website or app. Ensure your system is secure and complies with Payment Card Industry Data Security Standard (PCI DSS) requirements to protect your customers’ information.
Test your system: Before launching, test your payment system thoroughly. Make a few transactions to check that the payment process is smooth and funds are deposited into your account correctly.
Train your staff: If you have employees, make sure they are comfortable with the new payment system. They should know how to process transactions, issue refunds, and handle any potential issues that might arise.
Take the time you need to choose and set up the right system for your business. As your business grows, your payment processing needs might change, so regularly review and update your system as necessary.
Learn more about how Stripe supports payment processing both online and in person.
16. Plan for hiring
Planning for hiring is a key phase in a business’s mission for growth. Here’s how to approach this important step:
Assess your needs: Start by identifying the roles that need to be filled in your business. What tasks are you struggling to accomplish? Where could you use extra help? Because your needs might change as your business evolves, this should be a regular, ongoing exercise.
Create detailed job descriptions: For each role, write a clear and detailed job description. This should include the role’s duties and responsibilities, required skills and experience, working hours, and any other relevant information. A comprehensive job description sets clear expectations and helps attract the right candidates.
Determine compensation: Research the market to understand competitive salary ranges for each role. Consider all components of compensation, including base salary, bonuses, benefits, and any equity or stock options. Be transparent about compensation to set clear expectations.
Choose your recruitment channels: There are many ways to find potential employees, from job boards and recruitment agencies to social media and networking events. Consider your target candidates and choose the most effective channels for reaching them. You might also consider an applicant tracking system (ATS) to manage applications and streamline the hiring process.
Interview and assess candidates: Once you start receiving applications, you’ll need a process for evaluating candidates. This might involve multiple rounds of interviews, skill assessments, or even “trial” projects. Be consistent in how you assess candidates to ensure fairness and effectiveness.
Make an offer and onboard: Once you’ve found the right candidate, make them a formal job offer. If they accept the offer, plan for a comprehensive onboarding process to help them acclimate to their new role. This should involve trainings, an introduction to your business operations and culture, and any necessary administrative tasks such as HR paperwork.
Hiring the right people means setting up your business for success, so it’s worth investing time and resources into this process. As your business grows, you might also need to consider additional human resource functions, such as payroll management, benefits administration, and ongoing staff development and training.
17. Consider business loans
Using business loans as a part of your financial strategy can be a powerful step to expedite your business growth. Here’s how to approach this complex yet essential step:
Determine your need for a loan: Before jumping into the loan application process, assess whether you have a genuine need for a loan. Maybe you need funds for expanding your operations, buying equipment, increasing inventory, hiring staff, or smoothing out cash flow. Getting clear about your business’s financial needs can help you make a more informed decision about applying for a loan.
Research different types of loans: There are different types of loans available for businesses, from traditional bank loans and Small Business Administration (SBA) loans to alternative online loans and lines of credit. Each type comes with its own terms, interest rates, and requirements. The right choice for you will depend on your specific needs, financial situation, and the stage of your business.
Consider eligibility requirements: Lenders have varying criteria for approving loans. These can include factors such as your credit score, business revenue, the profitability of your business, and how long you’ve been in operation. Before applying for a loan, carefully check these criteria to see if you qualify.
Prepare your loan application: Once you’ve chosen a type of loan and confirmed that you meet the lender’s criteria, the next step is to prepare your loan application. This involves compiling financial documents such as your business plan, financial statements, tax returns, and details of your collateral. You may also need to present a plan outlining how you intend to use the loan and how you will repay it.
Compare loan offers: If your loan application is approved, you may receive offers from different lenders. Consider each offer’s terms carefully, including the interest rate, loan amount, loan term, and any additional fees. Be sure you understand the total cost of the loan and how the repayment terms align with your business’s financial projections.
Taking on debt is a serious commitment that demands careful planning and consideration. For additional guidance throughout the process, consult with a financial advisor or mentor.
There’s no easy shortcut to starting a business. Cutting corners or skipping steps in the early days can create unnecessary friction, confusion, or even legal liability down the road. But while much of the work that goes into starting a new business might seem tedious, it’s not overly complicated. Taking a thoughtful and methodical approach to this process, and addressing each step in the correct order, will give you a foundation that can support all the goals and dreams you have for your business—exactly what motivated you to begin this journey in the first place.