7 Steps for Starting a New Business

Do one thing: The U.S. Small Business Administration (and local Chambers of Commerce) have programs to help entrepreneurs on their pathway to business ownership. Before you launch a new company, consider visiting the SBA’s website to find a business counselor in your area. 

There’s a statistic tossed around among entrepreneurs and others that about half of all businesses fail. While there is some truth in that number – research shows that 50% of new companies close within the first five years – Americans continue to launch new firms at a healthy clip. 

5.5 Million

New small business applications filed in 2023 according to U.S.Census Bureau

To give would-be business owners a strong foundation, the SBA and other resource-based organizations offer guidance on how entrepreneurs and start-ups can work to ensure their great ideas turn into profitable ventures.

If you’re thinking of going into business for yourself or maybe just taking your side hustle to the next level, consider these steps for starting a new business from the ground up.

1. Research Your Idea

It’s vital to understand if there’s a need for the products or service(s) you want to offer. If people don’t need it or won’t buy it, what’s the point? That’s why performing market research is a good way to determine if there’s demand.

How do you do that?

• Resource: The Harvard Business School Online provides a free guide to performing market research for a startup. It includes everything from how to talk with potential investors to examples of unbiased research questions to ask. 

2. Develop a Business Plan

Not all start-ups are launched by business school grads.

• Resource: The SBA offers a step-by-step primer on how to create a business plan. 

Chambers of Commerce in many cities want business owners to succeed (it’s key to keeping their local market thriving). That’s why many offer business mentoring programs to help guide entrepreneurs on their path. 

3. Identify Funding

If you are not prepared or able to pay to launch your new business, it’s time to figure out where your funding will come from. Besides traditional loans from credit unions and banks, there are several other potential revenue sources, including grants, that are available to new business owners.

• Resource: The FDIC offers a 10-page list of the options anyone can access. 

4. Select a Business Structure

According to the SBA, the business structure you select “influences everything from day-to-day operations to taxes and how much of your personal assets are at risk.”

Types of structures include:

• Limited liability corporations
• Cooperatives
• S-Corporation
• C-Corporation
• and dozens of other corporate structures

This is where having a mentor or business counselor comes in. Be sure to seek insight from a mentor or attorney so you pick the framework that offers the right balance of legal protections and benefits for your situation.

5. Location, Location, Location

Whether you will be online only, or have a physical location, this is a decision that will have tax implications depending on where (which state) you hang out your shingle. For those going the brick-and-mortar route, don’t forget about creating a website to secure your spot on the web. Research shows that a majority of shoppers now check out a company’s website before ever visiting the shop in person.  

6. The Name Game

While you may have had a name picked out for years, it’s wise to make sure no other company is already using that moniker. You need to decide if you want to trademark your name, too. Don’t forget about snagging a domain name – or several versions – for your website.

7. Budget for Advertising and Marketing

You need to make sure people know about your new business and what makes it stand out from your competitors. Remember, you can have the best idea in the world, but if people don’t know you are out there, what’s the point? One good place to start spreading the word about your venture is on social media, where you can get more bang for your advertising dollars. 

Pro-tip: Don’t forget to join your local and regional chambers of commerce. They can publicize and cover your grand opening, offer free business tips, and share your news with all of their other members. Don’t stop there. Make sure to attend at least a few of their networking events as a way to meet other business owners who have the potential to become your first customers.