How to Start a Business (2024 Guide)

Starting a business can be a complicated process that involves multiple steps and paperwork you’re likely not to understand completely. However, it’s also extremely exciting to start your own business and take that important step in your life.

We’ll give you a step-by-step guide on how to start a business with ease.

1. Define Your Idea

If you’re looking into starting a business, presumably, you already know what you want to do. But, before you jump into the world of entrepreneurship, you should clearly define what your business will be about.

It’s important to find a unique way of approaching your business idea to be able to do something you’re passionate about and, most importantly, something you’re good at. If you want to run a t-shirt business, reflect on what would set you apart from all the thousands of other stores already available to customers.

You should also think about what you want to achieve. Think of making money as a byproduct of your business, not its main goal. Try to establish what your company will strive towards, such as:

• Offering a unique product or service in an unexplored market,
• Resolving a pain point you personally experience,
• Setting specific goals you want to achieve in the future,
• Achieving the goals with your experience and expertise.

TIP:

Since you’re in an idea-defining step, try and figure out the exact ways of achieving your vision. Check out the mission and vision statements of successful companies to get inspired. For example, Spotify’s mission is to “unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.” Their way of achieving this is through a streaming platform.

2. Research the Market

Now that you know what it is you want to do and why, you should research the market and see if there’s an actual need for it. Knowing the market is a crucial step for any business; there’s a reason companies invested over $83 billion in market research in 2023 alone.

Most markets are saturated with hundreds of companies doing the same or similar things, and you should try to find out if customers are willing to pay for a unique product or service. Or, better yet, try to spot a market gap that you can exploit and stand out from the competition.

One of the challenges here is establishing your target audience and the niche your idea belongs in. To do that, you can use various research methods and tools, such as:

• Google Analytics,
• Google Trends, 
• Keyword research tools (Ahrefs and Semrush),
• Experimenting with social media ads,
• Conducting surveys.

Part of the research process also involves scouting your competitors. Learn who the big players in the market are and what you can do to compete with them. People will always enjoy soft drinks, but it’s extremely difficult to rival Coca-Cola and Pepsi.

TIP:

When you have enough data, do a SWOT (strength, weakness, opportunity, threat) analysis in an impartial way. It will give you a better idea of how your business may perform in the market and how your products or services compare to competitors.

MORE: Best cities for kickstarting your career

3. Write a Business Plan

A business plan is a document that details the goals of your company and serves as a roadmap. It’s an important document that helps investors, financial institutions, and business management easily understand your business model and vision.

While it might seem tedious and unnecessary for a one-man company at first, it’s an important step that will help you guide the business. There are several ways you can write a business plan and use different templates. A well-written plan should contain:

1. Executive summary,
2. Company description,
3. Market analysis,
4. List of products and services,
5. Marketing plan,
6. Operational plan,
7. Financial plan,
8. Mission and vision.

4. Choose Your Business Structure

With a business plan in place, it’s time to choose your business structure. While it’s possible to begin as a corporation, it’s unlikely that it will be the best starting point. For small business startups, the choice is usually between a limited liability company (LLC), limited liability partnership (LLP), and sole proprietorship (SP). Check out the table below to learn more about these structures:

TIP:

Before you jump into choosing a structure and founding your business, you should test the waters and start offering your products or services as a side hustle. Being an entrepreneur is exciting, but don’t quit your job before you’re sure the risk is worth it. Eren Bali was still working on freelance projects when his website, Udemy, hit the first million in 2010.

MORE: Types of startups

5. Choose a Business Name

Naming a business is a crucial step in starting a business. If you don’t already have the perfect name in mind, it can be a lengthy process that involves brainstorming, market analysis, and customer feedback.

When choosing a business name, make sure that it’s catchy, memorable, and easy to spell so that people will recall it and look it up online with ease. Think of industry-relevant keywords and buzzwords people think of when imagining your product or service.

Use our AI-powered business name generator to get 1,000+ unique name ideas for free. Pick a name that accurately sums up your business’s mission, represents your values, and is relevant to your niche. It’s also better to pick a name with an available domain name (preferably .com) to establish your online presence more easily.

Once you settle on a name, check if it’s already taken before taking further action.

Expert Opinion

6. Fund Your Company

While creating your business plan, you should have established the budget for setting up operations and going public with your company. If you have the necessary funds, lucky you. Otherwise, you’ll need to rely on external resources.

If you’re having trouble determining the necessary funds, conduct a break-even analysis to determine when you’ll become profitable:

Fixed Costs ÷ (Average Price Per Unit – Variable Costs) = Break-Even Point

Once you define your break-even point, determine expenses, and set a price for your products or services, it’s time to raise some funds. There are various ways you can do this, including:

• Business loans,
• Business grants,
• Investors,
• Accelerator and incubator programs.

Consider raising your capital through crowdfunding platforms like GoFundMe, Kickstarter, Patreon, and Indiegogo. Some projects managed to raise billions of dollars this way. The current Kickstarter record holder is “Surprise! Four Secret Novels by Brandon Sanderson,” which gathered $41.75 billion in 2022.

7. Register the Business

If you thought everything up to now seems tedious, you won’t like this step. It’s time to set up your company and complete all the required paperwork.

This process will vary depending on the location of your company, i.e., the local laws you’re subjected to. In the United States, most small businesses only need to register the business name with their local and state governments.

Registering a business is also different depending on your business structure. For each structure, you need to file different paperwork:

• LLC: articles of organization, employer identification number (EIN), business licenses and permits, annual reports (to maintain legal status), and operating agreement. 
• LLP: partnership agreement, statement of qualification, EIN, business licenses and permits, and annual reports.
• Sole proprietorship: business name registration (registering a DBA), EIN, social security number (SSN), business licenses and permits, local permits, and sales tax permit.

TIP:

You can protect yourself by trademarking your business and getting insurance. These steps are not obligatory, but we advise you to carry them out to minimize risks and get legal protection for your intellectual property.

MORE: Best and worst countries to start a business

8. Acquire Licenses

Regardless of your company’s structure, industry, and the state you’re in, you’ll need to gain licenses and permits to conduct business. Most companies require local, state, and federal licenses to operate, especially for online sales.

Which licenses and permits you need depends on your business activity and the issuing agency. If you’re looking for licenses outside the U.S., you can find the necessary information via your local government website.

TIP:

Acquiring licenses can be a lengthy process that requires legal expertise. It’s best to leave it in the hands of a professional and hire a business attorney.

9. Get the Word Out

Now that all the prerequisites are fulfilled, it’s time to actually get to work. Your marketing plan will make or break your business, and depending on your advertising success, you can have zero or tens of thousands of customers in a couple of months.

A crucial step in this is establishing an online presence. First, get a domain name that matches your business name and optimize the website for SEO. Post unique content that will establish you as an authority in the space and promote your products and services.

You should also develop a social media presence by posting content that resonates with your audience. If you’re not familiar with how this works and want to focus on the operational side of running a business, hire marketing professionals to help you out.

Online advertising and search engine optimization are becoming increasingly more prevalent in marketing. Nowadays, it’s almost unimaginable to think that a company can be successful without an online presence. That’s why businesses increase their investment in this area all the time.

According to Statista, companies around the world spent $197.54 billion in 2023. The projections show that worldwide search ad spending will grow to $260.97 billion in 2028.

TIP:

A marketing plan will vary a lot, depending on your type of business and target audience. For example, promoting on TikTok is great for brands aimed at teenagers, but not as much for construction companies. To create a business plan, you need to:
– Define your audience,
– Identify objectives and key results (OKRs),
– Choose marketing channels,
– Define your competition,
– Set your budget,
– Outline methods for achieving OKRs (e.g., SEO and social media,).

10. Scale the Business

If you’ve reached this point, it’s onward and upward for you. Remember, there’s no such thing as standing still; if you’re not moving forward, you’re moving backwards. You need to constantly work on expanding your customer base and increasing your revenue.

Make sure to always reinvest in the company. Increase marketing budgets, improve your product development process, use automation software, and collaborate with other companies. Better yet, come up with a unique and innovative way to scale your business.

There’s no such thing as a perfect way of scaling a business. You need to make decisions and not let fear of making wrong ones stop you. But, always keep an eye on your finances and make sure you remain profitable.

TIP:

In the current era of remote work, you can go international to source the best talent and hire new employees. For instance, neither the U.S. nor the U.K. ranks among the top 20 hardest-working countries in the world.

Get Extra Support

Business Grants

Getting financial support is one of the major stumbling blocks when it comes to starting your own business. One solution to this problem is a business grant. A grant can be government-issued or private, with the former being more common.

A startup grant is a special way of helping out a company. Unlike business loans (which provide the financials), grants don’t need to be repaid. They also often come with some form of mentorship, guidance, and additional support. You should always check out your eligibility for a grant before turning to a bank.

Check out the following resources to find a U.S. grant you may be eligible to apply for:

• Grants.gov,
• Small Business Development Centers (enter your ZIP code to find the closest one),
• U.S. Economic Development Administration (EDA),
• State Trade Expansion Program (STEP),
• SBIR.gov,
• International grants:
  • OpenGrants,
  • EU Small Market Programme,
  • Horizon Europe,
  • EU Funding.

Full Startup Solutions 

So, you have a great product/service idea and know all the steps to starting your business; what now? Knowing and doing something are two different things, and most upcoming entrepreneurs still need help to complete the steps we’ve laid out.

If you need a helping hand, you can use various services made specifically to automate and ease the process of starting a business.

One such tool is the GoDaddy Airo™, an AI-based solution that handles all the steps of business setup. With it, you can build your website, get business name ideas, design your logo, register an LLC (for U.S.-based companies), and get support for online and social media ads. You get all of this for the standard price of a domain name registration.

Shopify also offers a similar solution. You can use it to quickly set up an eCommerce website, market your products or services, and manage your company as it grows. One of the main reasons behind Shopify’s popularity is its ease of use, even for people with zero tech experience.

How to Start a Small Business in 10 Steps: Infographic

Key Takeaways

Starting a business requires attention to detail and can be a lengthy process. Make sure not to rush it; every step is important and can be your downfall if you’re not meticulous.

They say a high-quality product will always find its way to the customer, but that’s not really the case in the modern business world. Don’t take any chances; follow our steps to give yourself the best shot at success. Good luck!