Starting a business is a lengthy and expensive process. Hoist is here to guide you step by step beyond profitability.
There are 31.7 million small businesses in the US, and each business owner has a reason for starting their venture. Most small business owners want to control their destiny by doing something they care about. This gives you instant motivation, and you'll be willing to do whatever it takes to see your business succeed. We talk about small business owners as a “they” then transition to “you” out of the blue. Let’s either improve this transition or stick to one type of voice.
Other reasons include financial independence, flexible schedule, tax benefits, learning, job security, self-employment, and creativity.
Starting your own business is a risky endeavor that doesn't guarantee payoff. That's why a lot of work is necessary, and even then, it is possible to see your business fail.
Hoist helps painting companies dot the i’s and cross the t’s. We cover all the nitty-gritty so you can focus on the product and customer.
Here's a step-by-step guide of how to start a business:
Passionate individuals build successful businesses. Those early mornings and late nights you'll spend building your business won't last if you lack passion.
So, find your passion and make it your business. What are your values? What's your talent? What have you always wanted to try? What are your hobbies and interests?
These questions will help you narrow down your passion, helping you discover a viable business idea.
This is the fun part. You already have an idea in mind, and now you want to know if people are willing to pay for the product/service and make a profit.
Quick research on Google gets the ball rolling. Use Google Ads Manager's free keyword research tool to find out the number of people who search for the product or service you want to sell. If product demand is high, you can create an SEO strategy on the spot.
At your local library, find market research reports that will let you know the size of the market, potential growth, and significant players in the field.
For further research, seek the opinions of your potential customer base, figure out how to make your idea innovative (a small tweak could make a significant difference), and learn your niche by segmenting the market.
Writing a business plan is essential if you plan to seek funding from banks or investors. These parties will want to see financial projections to make sure they're sound before providing capital. You also need this document when pitching board members and partners. But that's not all.
A business plan maps out your short-term and long-term vision. With it, you better manage the growth of your business. It lets you define the business tactics, strategy, and action plans.
In case you only plan to use your business plan internally, forecast key business figures, showcase main milestones to achieve, and indicate frequent progress checks for reviewing and revising the plan, among other things.
Most businesses fail because of a lack of funding. That's why you need to determine the amount of cash you'll need to run the new business before it starts making money. Then determine where you'll get this funding. Sources include small business loans, credit cards, venture capitalists, small business grants, angel investors, crowdfunding, invoice financing, and savings accounts.
Another way to fund your business entity is to keep your job while running the new business in your spare time. That way, you can have some money to run your home and business before reaching the breakeven point.
It is paramount to emphasize the pitch to boost your chances of getting funding. The better you understand the problem and your solution, the higher the chances investors will be pleased with your small business idea and fund it.
You'll likely want to choose between establishing your business as a sole proprietorship, partnership, corporation, or limited liability company. The legal structure you pick will affect your taxation and personal liability, including a few elements.
For instance, choosing a sole proprietorship orand partnership (where you share liability with partners) will affect your credit because you're responsible for all business obligations and debts. Meanwhile, if you operate as a corporation or limited liability company, your credit isn’t directly impacted.
Also, consider whether you’ll share the burdens of running a new business. If so, a partnership is better than a sole proprietorship. Partnerships also benefit from not paying income tax, just like limited liability companies. Partners file taxes on their personal income.
But keep in mind that you have to share profits, unlike in a sole proprietorship where you enjoy autonomy and all earnings.
Do proper research and choose wisely.
When it comes to setting up finances, you’ll need a business bank account. That's where you'll keep your capital and make all your transactions.
Tracking expenses is crucial for your new business to survive and thrive. It helps you prepare tax returns, build financial statements, and monitor business growth.
While Excel can do the trick, it's best to invest in bookkeeping and payroll systems that will automate the process for you and avoid potential errors. A payroll system helps schedule salaries and withhold the right taxes.
Whether you have a home-based online store or a physical business location, many states want you to fill in application paperwork for business registration, employer identification number, and a license.
Depending on your business structure, you'll need to prepare a partnership agreement for partnerships or LLC operating agreement for an LLC. In the case of a corporation, you'll need articles of incorporation, business name reservation agreement, non-disclosure agreement, and more.
A buy/sell agreement document will help cover instances where partners/owners want to leave or retire. It sets the price in advance and saves everyone from legal issues that are likely to arise.
Also important are employee agreements, employee handbooks, non-compete agreements, and terms of service.
You'll need to hire employees at some point in your new business. In the case of contractors or freelancers, it's crucial to maintain your books and give a 1099-MISC form at the tax year's end.
Also important is classifying workers correctly. Take note of the difference between a contractor and a W2 employee.
Accelerated by the pandemic, many companies are now heavily investing in a remote workforce. This gives you access to a wider pool of talent if you decide to do the same.
But, keep in mind that you'll need to comply with the particular income tax rules of the region where your employees reside.
A good marketing strategy will describe your enterprise and its products or services and your offering position in the target market. What's more, it profiles your competition and customers, lays out the marketing tactics you'll use (such as Facebook ads and email marketing), and lets you create a marketing plan.
It's paramount to align your marketing strategy to your business goals in your business plan. For instance, if targeting a new market is a business goal, part of your marketing strategy would outline tactics to achieve this vision.
When creating marketing goals, use the SMART method.
Having a website is a modern-day contrast for brick-and-mortar stores. So, if you launch a new business, be sure you have a strong website that serves the same purpose as a physical location would.
A key feature of your website is the domain, which needs to be memorable and SEO-friendly.
You also need to buy secure hosting that can scale with the needs of your business.
What's more, build a website that's fast and users can navigate with ease. Afterward, create SEO-optimized content to educate your users and boost your business to the top of Google search engine results pages.
And, don't forget to have a professional maintain it!
The main challenge of a new business is generating sales. No one knows you, and your prospects are already consuming your competitors' products. Your main obstacle is convincing them that your offering is better than what they're getting. That's why you need excellent salespeople or be an excellent closer yourself.
If you're selling a high-value service or product where consumers will pay a retainer, direct engagement via phone or social media is best. For low-value, high-volume offerings, use other means like ads. Ads will also work for the former kind of business.
Attend networking events where your prospects are likely to be, pay for influencers, create a lead magnet, and have a referral program. Investing your time and money in a few of these strategies will generate results for you in no time.
To understand how to start a business right, you need to link your actions to strategy and measure your progress. Be sure to evaluate your main activities and product offering, then find ways to improve them.
A good way to ensure you deliver results is to look at the products or services that are doing well and those that aren't. You can then focus on products with high-profit margins and most sales.
You can also evaluate your expenses and find ways to lower them, like negotiating with suppliers for better deals or seeking out cheaper raw materials.
Businesses don’t often turn a profit during their first year. The majority of businesses will start to be profitable within two to three years.
But this period will vary depending on the costs of running your business. If you have high salaries and high startup costs, it may be a while before you profit.
If you have a home-based business with low overhead expenses, however, you may be instantly profitable.
Learning how to start a new business can be overwhelming, from researching the idea, writing the business plan, and finding capital to creating a marketing strategy, generating leads, and hiring. Hence Hoist.
Our platform offers numerous resources for starting, operating, and scaling your painting business. Our training and support team will equip you with the necessary knowledge you need to make your startup a success.
We'll also file the paperwork for you. So, you need not worry about licensing, permits, business insurance, business registration, and more.
At Hoist, brand building, lead generation, automation of day-to-day tasks, and payment setup are part of the package as well.
Visit Hoist now for more information on starting your small business.
Sources:
Top 10 Reasons to Start Your Own Business | AOFUND
Example of a Smart Objective for a Marketing Plan | Chron.com
Review your business performance | info entrepreneurs
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