For anyone looking to dip their toe in the pool of entrepreneurship, starting your first company can be one of the most rewarding and exciting experiences—but it can also be extremely stressful. Where do you begin? Do you need a lot of money? What about perfect credit?
There are so many ways to broach the idea of creating your first business, and likewise, there are lots of important elements to consider.
As a serial entrepreneur myself, one of the things I’m most passionate about is being able to teach new entrepreneurs from my personal experiences so they can improve their chances of success. Follow along in this comprehensive guide for starting your first company and take the guesswork out of the process.
…While you’re here, don’t forget to register for my FREE online Masterclass training, ‘Teach Me The Tax Game’ and learn how to increase your income as a professional tax preparer, and potentially make $100K in just 120 days!
Step One: Get Your Mind Right
We often hear about these people who’ve become overnight success stories because it makes for great clickbait.
The truth is that unless you’re born into business, it’s never that simple. Business ownership typically consists of many sleepless nights, and years of dreaming, curating, and positioning yourself before you feel confident enough to go public with your brand. For this very reason, it’s important that you focus on your own business journey and don’t compare your success to anyone else’s along the way.
So, how do you do that, you ask?
New entrepreneurs and business owners often feed off their initial drive and motivation, but somewhere along the way they start to get frustrated with the process and their ambitions start to wane. Creating habits and following routines are rock-solid ways to power yourself through when you feel like you’ve lost all mental encouragement.
Now Take The Next Step
Some small business owners like to make up things as they trek along and dive headfirst into entrepreneurship. Others catch a case of analysis paralysis and never follow through. Maybe you’re a combination of the two—and truthfully, that’s right where you should be.
The very best way to achieve any goal is to write it all down on paper, in detail, with step-by-step instructions on what needs to happen and when. Certain steps might take you a couple of minutes to complete, while others can take much longer. No matter what, just make sure you take the next step.
1: Decide On Your Company Concept
Most business experts will tell you to capitalize on what you love doing, but it leaves out two very important factors:
- your business needs to make money and
- it needs to be something you’re talented at.
For example, you may love reading, but how viable is your business concept if you’re not very good at writing? Maybe you love making smoothies and you want to start a smoothie shop in your small city that already has four nearby. In that particular situation, it’s not going to be easy to corner the market when you’re creating a product that four other people are also offering down the street.
So, if you don’t have a solid understanding of what it is exactly that you want to sell and what it will include, ask yourself the following questions:
- What are you passionate about?
- What do you hate doing?
- Can you think of anything that would make doing the things you love easier?
- What are your skills?
- What are you good at doing?
- What do other people ask you for advice about?
- If you were given 10 minutes to give a seven-minute talk on any topic, what would it be?
- What’s something you have always wanted to do but haven’t had the time or money?
Answering some if not all these questions will help you when brainstorming business ideas. If you already own a business, these questions could help you grow it. Once you’ve nailed down a solid idea, compare it against whether or not you’re good at it, and most importantly, figure out if it’s a money-maker.
Your business idea doesn’t have to be the next Scrub Daddy or Pretty Litter. Instead, when starting your first company, take an existing product and make it better. You could also look into selling digital products so your overhead expenses get cut by more than half.
What Type Of Business Should You Start?
Before you decide on the type of business you want to start, there are a few things worth considering:
- What type of funding does it require?
- What type of funding options are available for you?
- How much time do you have to invest?
- Do you prefer working in a professional office setting or a remote, work-from-home gig?
- What are your interests and passions?
- Is it something that would be viable as a digital product?
- What experience, education, or skills do you need?
- How quickly do you need to grow your company?
- What kind of support do you have?
- Do you have a business coach?
- Are you partnering with another person or multiple people?
- Does the franchise strategy work better for your idea?
2: Research The Market & Your Competition
A lot of entrepreneurs spend more time and energy working on fine-tuning their products than they do getting to know their competitors. In the event that you do have to apply for financial assistance like a business loan, the bank is going to want to know what makes you different from your competition. And spoiler alert, you’re going to want a strong, educated answer.
If the market analysis shows that your service or product is saturated in your geographic location, it’s time to look at it from another angle.
The first step of a competitive analysis is primary research, which includes gathering information directly from potential clients rather than basing it on past data. To do this you can use surveys, interviews, and questionnaires to discover what people really want.
Use existing origins of information, like census data and public records to collect intelligence when you’re doing your secondary research. The current info may be cumulated and analyzed in many ways that work for your specific needs, but it’s likely not as detailed as primary research.
Administer A SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. Conducting a SWOT analysis gives you the opportunity to review all the facts and data about how your idea or product could function if it were made public. Additionally, it can also aid you in making decisions about the direction of your business concept.
It’s very possible that your business has weaknesses you’ve not thought about, or they could be some real potential for improving an existing product or service.
3: Create A Business Plan
Your company’s business plan is a comprehensive document that makes it easier for lenders and investors to get behind your brand. Even if you don’t need any outside funding help, completing a business plan will help you identify and rectify potential issues.
When starting your first company, your business plan should consist of the following things:
- Executive summary
- Company description
- Market analysis
- Organization and business structure
- Goal and mission statements
- Products and/or services you plan to provide
- Background summary
- A marketing plan
- A financial plan
Need more help with your business plan? I go over it in more depth and walk you through it with my online course, How To Create A Business Plan.
Now Come Up With An Exit Strategy
Having a proper exit strategy is critical for any business that’s looking for funding because it dictates how you plan to sell the business or transfer ownership if and when you decide to retire or move on to other businesses. Additionally, an exit plan also gives you the chance to get the most value from your company when you do decide to put it on the market.
There are a couple of different methods for cultivating a good exit strategy, the one you choose depends largely on your personal circumstances and business goals.
Create A Scalable Business Model
As your company expands, it’s a good idea to have a scalable business model you can refer to so that you can adapt for additional clients without paying all the extra money. This business model is something that can be easily copied to accommodate more consumers without any crazy added expenses.
Some examples of scalable business models include:
- Creating and marketing digital products
- Subscription-based businesses
- Network marketing businesses
Lastly, Start Planning For Business Taxes
Understandably, one of the most crucial things to do when starting your first company or small business is to start preparing for taxes. Business taxes can be complicated and there are various kinds of taxes you may be on the hook for, depending on where your business resides. Things like, self-employment taxes, sales taxes, income taxes, and property taxes are all possibilities, so make sure you have a firm grasp on the expectations. Depending on which kind of business you’re running, you may also be held liable to pay other taxes, things like unemployment or payroll tax.
4: Pick Your Business Structure
When deciding on how to structure your company, it’s imperative to consider how each organization impacts the amount of taxes you owe, daily operating costs, and whether or not your personal assets are at risk.
There are four types of business structures you can choose from:
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- Sole Proprietorship
Make sure you take the time to research each business structure thoroughly before you make a final decision. It’s also never a bad idea to speak with an accountant or tax professional if you’re not sure which option would be the best for you.
Interested in learning more about popular business structures? Read this article next: LLC vs. S Corp: What Option Is Best For Entrepreneurs?
5: Register Your Company & Get A Business License
When you’re starting your first company, there are a number of legal affairs to address after you’ve chosen the appropriate business structure. Below is a valuable checklist of items to think about when establishing your company.
- Choose your company name.
- Register your business in the state where it’s headquartered.
- Get an Employer Identification Number (EIN).
- Obtain the required business licenses and permits.
6: Get Your Financial Ducks In A Row
When starting your first company, there are a few things you need to do as far as finances are concerned.
- Opening a business banking account (you want to keep your personal and business finances separate).
- Purchasing accounting software or hiring a bookkeeper.
- Figuring out your “break-even” point (that is, the point where your business makes money).
7: Finance Your Business
There are a bunch of different options when it comes to funding your business, some of them require a considerable amount of effort while others are painlessly easy. They fall under two categories: internal funding and external funding.
This type of funding consists of:
- Credit cards
- Money from family or friends
- Personal savings
If you plan on financing your business with internal funds, you have to pay back your debt using credit cards, and if the business fails, you could be on the hook for a considerable amount of cash. Likewise, involving friends and family sets you up for a strained relationship if the business goes south.
If you’re an entrepreneur who’s looking to mitigate your risks, you’ll likely want to consider external funding.
This type of funding consists of:
- Venture capital
- Small business loans
- Angel investors
- Small business grants
Some businesses may use multiple sources of capital to start their business and that’s ok. Just make sure you’re taking the time to look over all your options.
8: Apply For Insurance For Your Business
You are required to have insurance for your business, even if it runs out of your home or you don’t have any employees. The kind of insurance you need varies with your business model and associated risks. It could be that you need more than one kind of policy, and you may need extra coverage as your company grows. Keep in mind that workers’ compensation insurance is required if your business has any employees.
Primary Kinds Of Business Insurance
- Property insurance
- Liability insurance
- Business interruption insurance
- Employee practices liability insurance
- Product liability insurance
- Workers’ compensation insurance
Unless you have a background and understanding of insurance policies, I recommend working with an insurance agent to begin. They’ll be able to work with you and tell you exactly what type of insurance would work best for your business model.
9: Build Your Business Toolbox
Having the right business tools at your disposal can help save you time and help your business operate without a hitch.
When looking for business tools, think about the following:
- Accounting software
- Project management software
- Credit card processor software
- A point of sale (POS) system
- Email hosting service
- Customer relationship management (CRM)
- Merchant services
- Virtual private network (VPN)
10: Market Your Company
A lot of entrepreneurs and business owners spend so much cash creating their companies that they haven’t set aside a marketing budget by the time they’re ready to open their doors to the public. It could also be that they’ve spent so many resources on developing their product that marketing ends up being an afterthought.
Below are some things you need to focus on when cultivating an effective marketing campaign.
- Create a website for your company
- Optimize your website with search engine optimization (SEO)
- Generate relevant, authoritative, keyword-targeted content
- Establish a social media marketing strategy
- Get your business listed on online directories
If marketing isn’t your thing, that’s perfectly okay, you’ll just need to hire a digital marketing company to help you create a winning campaign.
11: Scale Your Company
In order to expand your business, you’ll need to grow your client base and your income. This can be accomplished by scaling your marketing efforts, working with other creators, improving your service or product, or you can add new products that accompany already existing services or products.
You should also consider how you can outsource or automate certain tasks so that you can focus more on growing your brand. For instance, if social media is taking up far too much of your time, consider utilizing a platform like Buffer or Hootsuite to assist you in managing your accounts more easily.
You could also think about outsourcing your social media entirely by finding an expert or freelancer on sites like Upwork and Fiverr. Another pointer that will give you more time to focus on scaling your company? Use technology to automate specific processes in your business.
Last but not least, when starting your first company, thoroughly monitor your finances to ensure that your business is profitable. Ultimately, if you’re not making enough cash to cover your expenses, you’re going to need to find more ways to generate revenue.
Get Expert Help When Starting Your First Company
It’s no secret that starting your first company takes a lot of time, effort, and determination. But I’m here to tell you that if you’re willing to put in the work, it can be a fantastic way to smash your goals and achieve your dreams.
The bottom line? Running your own business is no small feat and at the end of the day, you’ll probably have to enlist the help of a business coach or expert to make sure you’ve crossed all your T’s and dotted all your I’s.
Are you ready to make your entrepreneurial dreams a reality? I’ve helped thousands of people just like you become successful business owners, and I know I can help you too. All you have to do is contact my team to get started.
…Thinking about getting into the tax business? Don’t forget to register for my FREE online training, ‘Teach Me The Tax Game’ and learn how to become a professional tax preparer, and make $100K in just 90 days!