The Ultimate 12-Step Guide to Start a Small Business for Rising Entrepreneurs

 26 Apr, 2021

Introduction

“A Big Business Starts Small.”

This quote from Richard Branson perfectly sums up the importance of starting small. After all, any big venture started from a small beginning and that also applies to how you start your small business.

A lot of people nurture a dream about owning their business. They have ideas and concepts that they want to see become reality and want to work on their own terms, pace and time. 

However, if you’re still thinking about starting a small business or you’ve steps on how to start a small business but don’t know where to start or whether it is a really good idea, at all? Then worry not. The future of small business is quite bright, so bright that it nearly contributes about 60% in most countries GDP and it is expected to add $2.3 trillion to Global GDP Growth by 2024.

Intrigued much? Want to know how to start a small business online?

Then again, starting your own small business does seem to be a task full of complications and difficulty at first, but if you have a set of steps to follow that will give you the confidence and determination to take the big leap. So, here we are, with some effective steps to start a small business that will help you in your entrepreneurial journey. This and we’ll also help you find answers to:

  • How to Start a Small Business?
  • Why Should I Go For Online Small Business?
  • Ideas on how to start a Small Business affordably
  • List of Affordable Web Design For Small Business
  • Tips on how to start a small business online

How to Start A Small Business: 12 Effective Steps to Follow

There are so many things that you should know in order to understand how to start a small business. Investment, finances, insurance etc… but relax, if you need a direction, detailed insight into the steps involved into starting a small business, then here we are providing you with 12 steps on how to start a small business:

1. Create a Business Strategy

A business strategy is a documented plan on how a business is going to achieve its goal. The goal can be about reaching 1 millions users, fulfilling customers needs & expectations, creating a niche for yourself or be better than your competitors or other goals. This is an important and foremost thing before you go about starting a small business as not only it gives you a concrete path to walk on but also helps you trace your success, performance or areas of improvement against the set target you’ve made in your business strategy. It can have these points or more:

  • What is the vision and mission of the company?
  • Who is your customer?
  • What does your customer value?
  • What products and services do you provide?
  • Who do you have? Who do you need? How do you find more of the right people?
  • Do you have the capital we need? How will you generate the profits you need?
  • What are your short and long-term goals?

 2. Choose Your Business Structure

When starting business, make sure you are aware about the type of legal structure you want for your company. As this not only influences on how much you pay in taxes, or the legal formalities you’ve to file for or take licences but the amount of investment you need to make or even the possibility of raising profit also depends on it. Here are few of the major business structure that you can choose from:

(a) Sole proprietorship

The businesses which are owned by one person who runs the business on his own.

Sole proprietorship advantages

  • Owner receives all the profits
  • Profits are taxed only once
  • Owner makes all decisions and is in complete control of the company
  • Easiest and least expensive form of ownership to organize

Sole proprietorship disadvantages

  • Unlimited liability if anything happens in the business. Your personal assets are at risk
  • Limited in raising funds and may have to acquire consumer loans
  • No separate legal status

(b) Partnerships

It's a type of business where two or more people share the ownership of a single business along with how they’ll share the profits, liabilities and assets and how disputes, if any, will be resolved or how partnership will be dissolved as outlined by a legal document.

Partnership advantages

  • Easy to establish (with the exception of developing a partnership agreement)
  • Separate legal status to give liability protection
  • Profits taxed only once
  • Partners may have complementary skills

Partnership disadvantages

  • Partners are jointly and individually liable for the actions of the other partners
  • Profits must be shared with the partners
  • Divided decision making
  • Business can suffer if the detailed partnership agreement is not in place

(c) Corporations

A business that is in the eyes of law is seen as a unique entity, separate from the people who own it. There are three types of corporations: C-corporation, S-corporation and Limited Liability Company.

C-corporation: it is taxed separately from its owners and allows a limited liability to the owners and thus more risk-taking and potential investment.

C-corporation advantages

  • Limited liability
  • Transfer of ownership, shareholders can sell their shares
  • Capital is easier to raise through the sale of stock
  • Company paid fringe benefits
  • Tax benefits

C-corporation disadvantages

  • Double taxation (corporation and shareholder earnings taxed)
  • Can be costly to form
  • More administrative duties - required by law to have annual meetings, notify stockholders of the meeting, must keep minutes of meetings and turn in
  • Pay corporate taxes at a different time than other forms of business

S-Corporation: Also known as subchapter S-corporation gives limited liability to the owners as it does not pay income taxes and the earnings and profits are treated as distributions. Shareholders involved in this corporation must report their income on their individual income tax returns.

S-Corporation advantages

  • Limited liability
  • Avoids double taxation
  • Profits taxed only once
  • Capital is easier to raise through the sale of stock
  • Transfer of ownership

S-Corporation disadvantages

  • Can be costly to form
  • Stockholders limited to individuals, estates or trustees
  • Required administrative duties
  • Cannot provide company paid fringe benefits

(d) Limited Liability Company

This type of business is a mix of structure that provides the limited legal liability of a corporation along with the operational flexibility of a partnership or sole proprietorship. This requires you to file paperwork.

Limited liability company advantages

  • Most common business structure and specifically created for small businesses
  • Must have insurance in case of a suit
  • Separate legal entity
  • Usually taxed as a sole proprietorship
  • Unlimited number of owners

Limited liability company disadvantages

  • Can be costly to form
  • Yearly administrative costs
  • Personal tax liability
  • Legal and accounting assistance is recommended

Remember whatever the business structure you decide to go for, always base your choices on three main factors: liability, taxation and record-keeping.

3. Analyze Your Potential Competitors

Familiarize yourself with the market you want to step in. A competitor analysis is important because it will not only ensure you can enhance your own business goal after considering market trends, help you identify how you can create a better business strategy than your competitors and much more. It can also provide you insights into your own best practices, business growth plan and its potential flaws thus a chance to outgrow not only your competitors but also your own goals. Ask these questions to narrow down your competitors:

  • Who are your main competitors that can have a large influence on your business?
  • Where are they in relation to you when you conduct a competitive analysis?
  • What are their products or services? 
  • Are they delivering more or less value to their customers compared with your offer and your deliverables?
  • What is something good about their offer that you don’t have in your offer? 
  • What is something bad about their offer that you can avoid offering? 

4. Identify Your Target Market

Like an effective business strategy  helps you stay on track of your success path, similarly identifying a target market helps employ better communication strategies either through products, marketing or services. Additionally, when you know who you are selling your product or services particularly, it helps you organize the group in a cost-effective and time-effective manner. So figure the gaps in the needs of your customers and fill it via in-depth market research or exploring industry trends, reviews. Ask questions like:

  • What is your target demographic?
  • Who is important to them?
  • What challenges do they face?
  • Can your service or product help them with these challenges?
  • Who would pay for my product or service?
  • How will you sell your product or service?

5. Finalize Business Name/Logo

Do you know Facebook was initially known as TheFacebook? But it lost “THE” and renamed itself to just Facebook. What do you think sounds catchier “TheFacebook” or “Facebook”? You have invested a lot in your business idea whether it’s money, time or efforts, however, if you can’t give it a name that not only distinguishes your business from others but also an image that is etched in the mind of your customers forever. Then what’s the point? So go for names that:

  • Relates to your business messaging/branding
  • Give insights into what your business does or sells
  • Are scalable to suit your future growth plan
  • Develop Your Visual Identity via Logos

6. Complete All the Legalities

Before you start a small business, you do need to seek and file appropriate business-formation paperwork, permits and licences to perform your particular business activity. For instance, Payment Card Industry Data Security Standard (PCI DSS) is one of the major documents that you need for involving in any kind of online financial transactions. Other than that, following are few other legal formalities that you need to do to give your online business solid legal foundation:

  • Registering your business with the appropriate government authorities
  • Obtaining all the required permits and licenses
  • Meeting all federal and state tax requirements, such as applying for state and federal tax ID numbers
  • Ensuring your business name, services or products are registered for Trademark so that your brand name is protected from getting copied or used without your authorization.

7. Buy a Insurance Cover

Insurance is one of the nicest things you could do for your small business other than getting online and branding it. This is something that acts like a safety net for your business amidst unforeseen circumstances. However, always ensure that not only you’re getting an insurance policy that suits your business but also something that you can afford.

  • Business Income Insurance: This insurance covers physical property damages that leads to a decrease in output or a suspension of your standard services.
  • Business Liability Insurance: This insurance covers your personal assets if you’re ever sued or face lawsuits.
  • Business Owner’s Policy: It’s a mix of both property and general liability insurance. It is suitable for individuals who use their own space like their residence for work.
  • Commercial Property Insurance: This covers any physical assets, commercial property that you own. But it gets costlier as you add more to the cover plan.
  • Contractors Professional Liability Insurance: This insurance covers professional oriented businesses such as engineering, architecture or subcontracting in case you face a lawsuit due to error or liability claims because of  environmental impact.
  • Cyber Insurance: This insurance covers the cost or liability related to data breach, cyber attack, theft or any other internet-based risks.
  • General Liability Insurance: This insurance covers liability related to suits or claims involving property damage, personal injuries or advertising offence.
  • Workers' Compensation Insurance: This insurance covers your employees’ medical bills and lost wages due to on-the-job injuries or illnesses. This is a mandatory insurance type in every state except Texas.

8. Set Up Your Accounting System

This one of the steps that you can’t take lightly as it is one of the essential ones. Yes, recording business transactions might seem like a herculean task but follow the below process to make your recordkeeping smooth and a worriless process:

(a) Select an accounting method

Here are the accounting methods you can choose from:

  • Cash-basis: It’s quite an easy process where you record income when you receive payment. 
  • Accrual: This accounting method requires deep knowledge and time as you record the income when your transaction takes place, with or without money.
  • Modified cash-basis: This is a hybrid accounting method with both cash-basis and accrual where you record income when you receive it, and expense when you pay. 

(b) Decide How You Will Record Transactions

How do you plan on recording transactions in your books? Maybe you’re considering:

  • Recording transactions by hand (e.g., spreadsheet)
  • Hiring an accountant
  • Using accounting software

(c) List All the Accounts 

Often called Chart of Accounts or COA where you make note of when the money is going into your business as well as all of the money going out. Generally COA has these 5 sections:

  • Assets
  • Liabilities
  • Equity
  • Revenues
  • Expenses

(d) Open a Different Bank Account

You can’t have personal and business funds in the same bank account. To avoid circumstances of accounting blunders, inaccurate tax filings, and overspending, open a separate bank account for business and personal purpose.

To open a business bank account, you typically need the following information:

  • Social Security number
  • Employer Identification Number (EIN)
  • Business name
  • Business license
  • Organizing documents (e.g., articles of organization)

(e) Determine the Payment Method

Be careful when you decide to choose your payment methods & policy and set clear, simple and comprehensible customer payment policy for your products or services. This may include:

  • Cash
  • Coupons/Gift Cards
  • Credit card
  • Mobile wallet payment
  • Netbanking

(f) Track Your Expenses

Recording and tracking your expenses is crucial not just for accounting but also it helps you monitor any discrepancy during the transaction period. So make sure, you keep safe these:

  • Receipts
  • Bank and credit card statements
  • Invoices
  • Bills
  • Canceled checks
  • Proof of payments
  • Previous tax returns
  • Forms W-2, 1099-MISC, and 1099-NEC (in US only)

Keeping the records of your expenses gives your business and book a neat and clean image.

9. Design a Small Business Website Suiting Your Business

There are several website platforms that you can pick for your small business but you need to make a sound decision, considering your website is your first impression that you give to your potential customers. Based upon how your website looks and functions, they will form an opinion about your business, so ensure it’s a positive one. Design a small business website that:

  • Simpler or Easier learning curve
  • It is fast and secure
  • Mobile-responsive
  • Simple & intuitive to explore
  • Persuasive Call to Action
  • Cost-Effective Maintenance support
  • High on Customization

10. Create Brand Strategy

Having a brand strategy is all about shaping your existing and potential customers’ perspective about your products, services and overall company image and that depends on how you communicate with them. Brand strategy isn’t a complex matter but is quite important as:

  • It helps you in creating a different and distinct image than your competition and gives you visibility in the marketplace
  • It’s the stepping stone to marketing strategy as it provides a clear purpose for how you can engage your customer and why you are doing so
  • With consistent, clear and cohesive brand strategy you can attract new customers & retain loyal customers 
  • It also gives your own employees a clear brand vision to ensure that everyone is working towards the same goals
  • It increases your business value as a strongly established brand not only adds value to your brand for future revenue generation but it also makes you an attractive choice for investment opportunity

These are some of the major branding key elements:

  • Brand Purpose
  • Brand Vision
  • Brand Values
  • Target Audience
  • Market Analysis
  • Awareness Goals
  • Brand Personality
  • Brand Voice

Wanna learn how you can position your brand well amongst your competitors? Ring JanBask Website Development Services to know the most cost-effective and compelling way!

11. Launch Your Small Business Online

Going online with your small business is not just about “designing a small business website that is nice looking and working site with your business name, contact details, and some social media links.” It is more about giving your small business an online version that is easy to find and is with informative, highly functional, secured and responsive web design. So get a website designing company for your small business website that gives your visitors greater user experience and boost your conversion rate. After all, over 2.14 billion people globally are expected to buy goods and services online by 2021, while the global e-commerce market is expected to see a CAGR of 16% between 2021 to 2026. You shouldn’t be missing out on such great numbers!

Here’s the list of one of the seven popular online business to choose from:

  • Freelancing: You can offer your service to other individuals and businesses using a skill that you have like content writing, designing or photography..
  • A Consultant: Become a coach or a consultant and sell your expertise, advice, and guidance.
  • Software as a Service (SaaS): Create a piece of software or application, and charge users a recurring subscription fee.
  • App Developer or Builder: With knowledge of coding & basic elements of software design, build apps for businesses that need specific apps.
  • Virtual Assistant:  Help businesses or entrepreneurs organize their personal or professional lives like setting appointment or  marketing management but virtually!
  • Life Coach: Help people strike a balance between their personal and professional life. Aid your clients in making progress in their lives to attain greater fulfillment. 
  • Ecommerce: Using platforms like Magento, Shopify or BigCommerce, set up a website and sell products online.

Hey, do you know by the year 2040, it’s estimated that 95% of all purchases will be through eCommerce? Willing to give it a go? Let’s get going with the best eCommerce website development services for launching a custom, creative and compelling eCommerce website.

12. Plan a Digital Marketing Strategy

A digital marketing plan just like branding is essential element to attract more customers, convert leads into sales and for brand awareness via digital channels like search engines, email marketing, and social media. Other benefits include

  • Interact with your prospects and learn exactly what they are looking for
  • Reach a global marketplace instantly
  • Cost-effective and makes quiet easy to reach more customers than traditional marketing methods
  • Create brand loyalty by knowing your audience and letting them know you intimately
  • Track what is working for you and what is not and improve based on it
  • Evaluate your progress of your marketing efforts immediately

Some of the key elements of Digital Marketing Plan:

  • Online Advertising
  • Content Marketing
  • Downloadable Content Offerings (eBooks, Whitepapers, Webinars)
  • Buyer Personas
  • Email Marketing
  • Video Marketing
  • Social Media Marketing
  • Search Engine Optimization (SEO)
  • Pay-Per-Click (PPC) Marketing

So what are you waiting for? Go on, take the plunge and start your entrepreneur journey with our effective steps on how to start a small business online. 

11+ Reasons Why Your Small Business Must Go Online Now!

Congratulations you have made a name for your brick and mortar in the business world! However, don’t just be satisfied yet because this is not the real ‘success’ as you’re still missing out on a lot of numbers of potential customers that are either hooked to their mobile phones, tablets or other digital device or platforms. Statistically speaking, when you don’t make your business online, you’re missing out on 4.66 billion active internet users globally which is 59.5% of the global population-- of this total 4.32 billion are connected via mobile devices. The world is going digital and more and more people are using the internet not just to find or explore products or review them, but to actually buy them and share them if they like what they got.

Of course, there are certain risks involved with the online business avenue like cybersecurity or marketplace saturation. However, when you look closely, you will notice the ups overpower the downs. Here’s the list of nearly 14 reasons that tells you to make your small business go online:

So you know how to start a small business but do you know your website can be the 24/7 representation of your small business, so why not create a lasting first impression? Want to know how? Reach out to a website design agency!

How Much Does It Cost to Create a Website For a Small Business?

Now you know how to start a small business online. And, we can’t emphasize enough why you need a website for your small business and why should you design a highly-functional, secured and responsive web design for a greater user-experience and higher conversion rates. Even though you have a small business and we agree every business has its own needs and requirements regarding the kind of website they want. Still, most businesses has some common web elements that adds to the overall cost of website development such as:

  • Domain registration
  • Website hosting
  • Security certificates (SSL)
  • Site design
  • Number of web pages
  • Added functions
  • Content management

*This is an estimated amount, the real cost of designing a website for small business can vary depending on your business type, functionalities, business goals or even where your business is located

How much is it Cost to Get a Website Made by a Freelance Developer or DIY

Choose if: 

  • You have the time and/or skills to develop a website by yourself, if not then the best option is to hire a professional web development company for the job. 
  • You don’t want to pay too much due to limited resources but quality might be spoiled, find free platforms or with nominal fees for various elements like domain name, website platform, plugins etc
  • You want deliverables in shorter turnaround times without making additional investments

Below are the estimated rates for hiring a freelance web developer.

  • Cost of hiring a freelance website developer: $30 to $150 per hour (depending on the knowledge and experience of the person)
  • Cost of hiring a freelance web designer: $20 to $80 per hour (again depending on the knowledge and experience of the person)
  • Cost of hiring a freelance content writer: $0.02 to $0.25 per word (depending on the knowledge and experience of the writer and the type of content you want)

What is the Cost of Hiring a Professional Web Development Company

Choose if:

  • You’re looking for reliable long-term cooperation as from the consulting to the technical support of the project they are your partner in everything.
  • You want access to an entire team of developers, designers, content writers, and marketers. So you won’t have to go and hire each one individually.
  • You want seamless management and cooperation with the company that intends only to provide you professionalism, quality, and perfect production.

The typical cost of getting your website developed by a web development company will be: 

  • Depending on the website features, functionalities, size, and including the cost of developers, designers, and writers, the cost of service, the research cost.
  • Along with the cost of testing and changes, updates and maintenance cost, and most likely the cost of domain and hosting for the website. 
  •  The cost of hiring a web development agency will be in the range of $1000 to $50,000+.

Moreover it’s not just about prior knowledge, money or even efforts involved when it comes to designing a custom web design for a small business. Because the costliest thing that you will invest in designing  a website for a small business is your brand image and how you want your prospects to see it. Affordable web design for small businesses just doesn’t mean you’ll compromise on quality. So, we recommend you go for a professional web development company rather than doing it yourself or hiring freelancers, especially if the quality of the website matters to you. After all, the business that you had finally established is the result of years or months of hard work and determination, so why let it bite dust over a few dollars. 

So choose wisely!

Still confused about how to have an affordable web design for small business or how much exactly it costs to develop or redevelop a website? Check out this blog to Know Everything About How Much it Costs to Develop & Redevelop a Website and have no doubts. Psst… you can thank us later!

Final Thoughts on How to Start a Small Business

Starting a business, even a small business can be a nerve-wracking experience but with right guidance and effective steps you can enjoy this new adventure that you have set upon. Yes, you will come across many challenges and roadblocks but have faith in yourself, in your business idea and constantly learn from your mistakes. Because once you do that, you will realize it is not only easy to start and run a business but can be so much fun too!

We hope this blog gave you an in-depth understanding on how to start a small business online and the reasons you should make your small business go online. We also shared some ideas on how to start a small business for the times when you have big dreams but are riding low on budget.

If you still have doubts or concerns about steps on how to start a small business online, the prosperity, growth of starting a small business online, our consultants are ready to hear you! Or share your own steps on how to start a small business or successful story of starting an online business… we are all ears! 

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Brian Taylor
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Brian Taylor

I tried to reach many professional developers for my business website but they are very expensive and I can’t afford them due to limited budget, please suggest any solution to this problem.

Louis Anderson
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Louis Anderson

I have recently started an eCommerce store, also have a good website and expanding a lot on paid marketing but still not satisfied with its performance and really not getting where could be the loophole, please guide me!

Caden Thomas
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Caden Thomas

Like it! I have seen so many blogs on how to start a small business but the way the post is providing the information is really good and what else I like about it is, writers tried to cover all essential aspects to start a small business.

Maximiliano Jackson
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Maximiliano Jackson

Well written post, helpful for those who want to start their own business but not getting how to start and where to start. Keep it up!

Holden White
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Holden White

Thanks to this blog, I will proceed with business insurance and legalities. I was more focused on marketing strategies and avoided some other essential steps mentioned in the post. Good job!

Paxton Harris
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Paxton Harris

It’s been a few months, I have started my ecommerce store to sell clothes online. Having a well-organized website I am not getting my desired results. Can anyone help me with that?

Nash Martin
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Nash Martin

I like your blog, it’s full of information but I am still curious to know about a few effective strategies so that I can get my desired results.

Bradley Thompso
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Bradley Thompso

Being new in the business world, I was not aware of the benefits of insurance. But through the information posted in your blog, I will now surely take business insurance for my business.

Bryan Garcia
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Bryan Garcia

The article comprises a bundle of information that can be helpful for the newcomers. They can get a clear idea of what steps to take and what to avoid?

Simon Martinez
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Simon Martinez

I am desiring to open an eCommerce store.Can anyone here help me with the overall cost it would take? Please revert..

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