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Do you dream of owning your own business? Many women do — they dream of taking charge of their destiny, being their own boss, and planning their own schedule. If this is your dream, we support your entrepreneurial journey! But, there are a lot of steps to start a small business — it can be overwhelming. If you get stuck, don’t despair! We’ve outlined the initial important steps you should take to start a small business.
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Getting Started
Plan your idea:
As a consumer and community member, have you ever noticed a problem in the marketplace? Or a missing product or service? Brainstorm ideas to fix those problems. Who would your ideal customers be? How much would they pay to solve the problem? How would you operate the business? Pre-planning questions like these can help you thoroughly think through your business plan.
Perform customer and market research:
This is a crucial — and often overlooked — step. Talk to potential customers to determine their needs. Consider creating a survey and sharing it widely to gather as much information as possible. Research your market and industry by using business database tools commonly found at the library. Is demand in the market generally increasing?
Research the competition:
Who is likely to compete with you? Where are they located? What is their pricing? How are you going to be different? Look through their websites and social media channels to glean competitive information. Chart it all out, see where the opportunities are, and determine where you fit.
Define your value proposition:
What is your secret sauce? How are your products or services different from the competition? What is your customer promise? This is often difficult for women to articulate, so get input from your network. Ask them to identify your strengths and determine how those strengths can benefit customers.
Determine a business structure:
Sole Proprietor, LLC, C-Corp, and S-Corp may sound like alphabet soup, but it’s actually how you’ll legally structure your business. Research each option and the effects on your personal liability and tax situation. If you are unsure which structure to select, seek the advice of an accountant or attorney.
Zoning:
Be sure to inquire about zoning regulations for your jurisdiction, including whether or not it’s permissible to run a home-based business. It’s important to check your HOA for any restrictions too. Many entrepreneurs begin by working from home, but you can also consider a shared office space, subletting from an existing business, or leasing commercial space.
Finalize a name:
Research possible company names. Think twice about using your own name or unusual spellings or punctuation. Verify that the name is legally available in your state AND is available from a web domain registration service BEFORE committing.
Explore Financing & Obtain Licenses
Crunch the numbers:
Research start-up costs and calculate estimated expenses and revenue for at least 12 months. Can this business be profitable? How many hours do you need to work or be open each week? This step often stops entrepreneurs in their tracks, but it’s necessary to learn if your business is financially viable.
Funding:
Now that you have an idea of how much money it will take to get started, where will you get it? Many entrepreneurs use their own funds plus friends and family to cover initial start-up costs. Research local and state grants from your economic development office. SBA’s Lender Match program connects small businesses to lenders offering SBA-backed funding.
Register the business:
If all the work you’ve done so far looks promising, it’s time to make it legal! Register your LLC, corporation, or trade name with the state. You can do this yourself or use an attorney. Be prepared to pay the first-year fee plus an annual fee.
Federal EIN:
Once you register your business in your state, register it with Uncle Sam. Go to the IRS website and click “Apply Online Now” to apply for a federal EIN number. Business license: Some jurisdictions require a business license. Check with your city, county, and state to see if your type of business requires a license, how much it costs, as well as when to renew.
Collect sales tax:
Certain products and services require you to collect state sales tax and make quarterly payments. Set up an account with your state’s Comptroller office. If you sell across state lines, you may have to open accounts in those states as well.
Establish Support Systems
Create a “BAIL” team: You need to have a team of experts to support you. This team includes:
- Banker – Set up a business bank account and establish a relationship with a commercial
- banking representative. You may need a business loan in the future.
- Accountant – Set up financial software or hire a bookkeeper, and find a CPA for taxes.
- Insurance Agent – Find out what insurance policies and coverage are required for your type of business. Obtain quotes from different companies and be aware that your homeowner’s insurance may not cover business assets, even if you’re working from home.
- Lawyer – You never know when you’ll need an attorney to help you with contracts, employee issues, or disgruntled clients.
Operations:
How will you operate the “back office” of your business? Research and choose a POS system (Square, Shopify), CRM system, Inventory Management, Accounting (QuickBooks, WaveApps, or Freshbooks), Email Marketing, and other operational systems. Select tech tools and software that automate tasks to help you be productive and competitive. We highly recommend Hubspot for small businesses! The Hubspot platform serves as your CRM, email marketing, project management, payment processor, help desk and so much more!
Human Resources:
If you plan to hire employees, set up workman’s compensation and payroll, or explore whether they fall under 1099 guidelines. Consider writing job descriptions, a performance plan, and an employee manual.
Begin Marketing
It’s time to start marketing and spreading the word about your business! Get a business phone number, publish a website, create social media handles, and optimize your SEO with keywords. Issue a press release about your new business, create a monthly email newsletter, find industry speaking opportunities, join networking groups or your local Chamber of Commerce, and find referral partners to share leads or host joint events. Get creative and watch your business grow!
There are many resources available to assist you. Check out local Women’s Business Centers, SCORE, and Small Business Development Centers for free counseling services and training classes.
Use Your Resources
There are many resources available to assist you when you start a small business. Check out local Women’s Business Centers, SCORE, and Small Business Development Centers for free counseling services and training classes.
Karen Kalantzis
Karen Kalantzis is a Senior Business Consultant with the Maryland Women’s Business Center. She assists women entrepreneurs and small business owners in Frederick County, Maryland, as they launch and grow sustainable business enterprises. Learn more at https://MarylandWBC.org.
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