How to Start Your Own Business: Complete Guide

Starting your own business is a complex, multi-stage endeavor. To successfully navigate it, substantial expertise and knowledge are indispensable. Numerous questions arise even at the organizational stage: company registration, opening a bank account and establishing a tax office account. Novice entrepreneurs may possess theoretical knowledge, but practical experience is often lacking.

Over time, after encountering a multitude of mistakes, the realization dawns that registering a business and opening a bank account represent merely the outset. These are organizational steps that typically entail fewer difficulties. However, if issues arise at the very beginning, the project’s development may be jeopardized.

Is it possible to completely avoid mistakes during the business startup phase? Most likely, no. However, it is indeed possible to significantly reduce their number. Understanding what your business requires is essential before taking those initial steps that could lead to additional expenses and significant mistakes. So, how to start a business and achieve success?

Step #1: Determining the initial factors

What does a business from scratch begin with? It starts with something close and understandable to the individual planning to launch their enterprise. However, this passion must be profitable. Registering a company becomes meaningless if there is no fundamental possibility of monetization.

Identifying your market niche is quite challenging, and even more so is counting on success right when starting a business and entering into competition with rivals. Therefore, it is crucial to commence with the idea that:

• has the potential to generate profit with minimal initial investments
• is not tied to entering a highly competitive market.

What you need to know and have to start your own business:

• the type of available financing
• the amount of time you can allocate to the opening procedure
•  your desired format – remote or offline
• potentially valuable interests and hobbies
• what you can offer to the end customer – a digital or tangible (physical) product or service
• business skills and experience
• requirements for external support or assistance
• collaboration opportunities
•  willingness to utilize a franchise.

Options for opening a business that do not require significant investments (registering a legal entity is generally not mandatory):

• starting and managing a blog
• online store
• dropshipping
• cleaning service
• accounting services
• landscape design
• consulting services
• photography and videography.

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Step #2: Market research and identifying competitors

Many people embark on the journey of creating a business by analyzing available opportunities and resources. While this approach is correct, it cannot be considered sufficient. It is essential to understand what products and services competitors are offering. If it turns out that after registration, the company will face stiff competition, it’s worth considering alternative industries or ensuring the availability of additional sources of financing.

Primary analysis when you start new business:

• information source – potential customers
• any format – surveys, questionnaires, interviews.

Secondary analysis when you decided to create a business:

• examining open sources of information.
• biased analysis (data manipulation to fit a predetermined outcome) diminishes the value of the research
• data processing methods can vary, with objectivity being the primary criterion.

What SWOT analysis provides (a strategic analysis method applied not only during company startup/registration but also in ongoing commercial activities):

• project strengths
• project weaknesses
• potentially available opportunities applicable to commercial activities
• likely threats.

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Step #3: Business plan preparation

What do you need to start a business? Creating a business plan is one of the critical points.

This is an important document that outlines the founders’ vision for the commercial venture. A well-crafted business plan is essential not only for investors, although this is its primary application. Understanding the goals and tasks documented on paper also aids those business-minded individuals who do not intend to seek additional sources of financing.

Components of a business plan:

• executive summary
• general description
• market analysis, positioning compared to competitors
• organizational structure
• goals and objectives set during company startup/registration
• proposed products and services
• project summary data
• marketing plan
• financial plan.

Potential exit strategy (typical options):

• selling a stake in the company
• passing a stake to family members
• liquidating assets
• complete exit from the business.

Business models that allow for further scalability include:

• subscription-based models
• selling digital products and/or services
• franchising
• network marketing.

How to start a small business and lay the groundwork for future expansion? It depends on a set of unique factors specific to each case, and general advice and recommendations often do not apply. Discussing the steps to ensure that a company is set up for expansion and scalability can be done through individual consultations with our experts.

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Step #4: Choosing the company structure

How do you start a business? Many seasoned entrepreneurs believe that the true starting point is the final choice of the legal and organizational form. In most countries, there will be several available alternatives, each with its own merits and drawbacks. Therefore, the ultimate decision before registration should be made considering all circumstances, including those that may arise in the future.

Common legal and organizational form options for most countries include:

• LLC (Limited Liability Company)/LTD
• LLP (Limited Liability Partnership)
• Sole proprietorship (individual ownership)
• Corporation (C-corp or S-corp for the USA).

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Step #5: Registration procedure and licensing acquisition

Organizational requirements vary from country to country. Therefore, before processing documents, it’s advisable to verify the current list on the registrar’s website or consult with experts. However, some recommendations hold true regardless of the specific country.

Key control questions (* – a requirement in some countries):

• company name (it’s advisable to prepare several options for registration)
• business name* (DBA, Doing Business As)
• registered agent
• obtaining a taxpayer identification number (in the USA – EIN, Employer Identification Number)
• licenses and special permits (depending on the country, they can come in three types – local/regional, federal, and state/national).

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Step #6: Addressing financial matters

How to open a business and not lose all your savings if it fails? When registering your company, it’s important to separate personal finances from the funds invested in the business. Even if the chosen legal structure allows for the use of a personal account, it’s advisable to refrain from such an option. If additional financing sources are anticipated, they should be integrated into the business plan effectively.

Another crucial consideration is accounting services after company registration (potential options):

• self-accounting
• utilizing specialized software
• employing an in-house accountant on the company’s payroll
• hiring an external accountant
• outsourcing all financial calculations to a third-party company.

Break-even point

There are several methodologies for calculating the sales level of products/services at which the registration costs are covered, and the first profit is earned. The general formula can be expressed as:

Break-even point = Fixed costs / Profit margin

To calculate the profit margin, the following formula is used:

Profit margin = Total revenue from sales – Production costs

The final formula may take the following form:

Break-even point = Fixed costs / (Total revenue from sales – Production costs)

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Step #7: Seeking additional financing sources

How to create a business if you don’t have enough starting funds? Ideally, relying solely on personal resources would be the perfect scenario. However, in the real world, registration and growing a business typically require funds that most beginners do not possess. Consequently, additional sources of financing are needed.

Internal sources of financing (commonly used for company registration):

• personal savings
• credit resources
• assistance from friends, acquaintances, or family members.

External sources of financing (required after registration):

• special financing programs
• grants
• business angels
• venture capital
• crowdfunding.

When starting a business, it’s important to remember that it’s challenging to keep the budget within initial estimates. Additional expenses almost always arise, many of which are difficult to foresee initially. Therefore, having backup sources of financing is always necessary.

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Step #8: Insurance programs

When facing budget constraints, there may be a temptation to cut costs in this expense category. Some types of insurance are mandatory, while others are optional, and they can technically be overlooked. However, even if the funds allocated for setting up a company are critically low, it’s advisable to refrain from this idea.

Types of insurance programs:

• liability – protection against third-party lawsuits
• property
• business interruption (the list of insurable events should be clarified)
• product/service quality liability
• employee liability
• compensation for employees.

Step #9: Selecting business tools

Additional business tools are optional, so allocating a budget for them during company registration is not mandatory. However, they significantly streamline commercial activities, save time, and automate routine tasks. Many available options are conditionally versatile, but some tools are highly specialized, and it makes sense to acquire them only after consulting with experts.

Useful business tools:

• specialized accounting software
• Customer Relationship Management (CRM) system
• project management software
• credit card processing
• Point of Sale (POS) payment processing systems
• Virtual Private Network (VPN) software
• services offering trading solutions (regular payments, subscriptions, etc.)
• email hosting.

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Step #10: Business promotion

Creating a new product and launching it into mass production are crucial stages of development. If, after registration, the company stops introducing innovations to the market and focuses solely on existing products, customers will soon forget about it. It’s important to pay attention to strategic development.

Post-registration promotion options include:

• launching a corporate website
• populating the website with content and optimizing it for SEO requirements
• creating specialized, relevant content for a specific target audience
• registering in online directories
• utilizing opportunities and resources provided by social media platforms.

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Step #11: Scaling the business

The primary objective after company registration is survival. Counting on instant success can be challenging; exceptions exist but are exceedingly rare. If you don’t plan for the long term, focusing solely on current tasks, the project may become unprofitable and need to be shut down.

What can be done for scaling:

• marketing expansion
• improving existing products and services
• exploring new opportunities for collaboration, cooperation, and partnerships
• outsourcing tasks not directly related to production (marketing, accounting, managing the corporate website, etc.)
• maximizing the automation of routine business processes
• maintaining constant financial oversight.

Resources to simplify personnel-related decisions (scaling will likely require an expanded workforce, and there are services with free registration):

• specialized hiring platforms
• job boards
• social networks (special attention should be given to professional communities)
• freelancer platforms.

What do I need to start a business? The most critical requirement is the desire to achieve financial independence. If you’re unsure where to begin with your business, reach out to our experts and discuss any questions you may have. We’ll definitely assist you!

You can find additional information in our other articles on business:

• How a Foreigner Can Start a Business in Another Country: Recommendations and Answers
• 5 Keys to Business Success and How to Use Them to Achieve Your Goals
• What Is Business Diversification and Why Is It Needed?
• How Do You Structure Ownership in Multiple Businesses?
• Signs That Your Company is in Trouble | Failing Business Problems
• 10 Common Mistakes Small Business Founders Make
• What Business Types Are Least Likely to Fail in 2023?

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