Starting a business is the most enthralling and exciting experience a person can have. However, the initial question every start-up founder asks themselves is where to start, and this is one of the most crucial steps for starting a business. Cutting a slack on this step can cost you your dream. According to the Bureau of Labor Statistics, 20% of new businesses fail during the first two years of opening, 45% during the first five years, and 65% during the first 10 years!
This blog provides a list of 7 steps for starting a business in the USA that will give you the basic structure to start your business.
Table of Contents
Steps To Follow For Starting A Business In The USA
Starting a business is not a perfect fit for everyone and requires long and tedious working hours. However, we cannot reduce your work hours, but we can probably provide you with direction to start working with these steps:
#1 Conduct Market Research
Before starting their businesses, most early entrepreneurs do not conduct comprehensive market research, including economic trends, industrial analysis, etc. Neither frame the concept of their business properly before the business. However, you can set yourself apart from them by asking these questions to yourself:
What do you love to do?
Things that you hate to do?
What are you good at? And What do others come to you for advice about?
What topic can you speak about in a five-minute speech?
What’s something you’ve always wanted to do but lacked resources for?
#2 Write Your Business Plan
A well-crafted and well-defined business plan includes an executive summary, company description, market analysis, organizational structure, goals and missions, products or services being offered, background summary, marketing plan, and financial plan. It serves as a roadmap for investors, creditors, and other stakeholders to understand your company’s operation and expansion strategies completely.
#3 Choose A Business Structure
Adopt a business structure that aligns with your goals and objectives while starting a business in the USA. The different business structures provide different benefits and risks. For example, an LLC can provide its owner with protection, but you cannot issue shares of an LLC. Likewise, various business structures have pros and cons; choose the structure that aligns more closely with your business objectives.
Some of the business structures are:
- LLC
- LLP
- Sole Proprietorship
- Corporation
#4 Register Your Business
To start a business, you must fulfill certain legal obligations, and for that, you must name your business. After selecting your desired business structure, give your business a memorable name, if possible, and try to name it after your domain to create a strong online presence. However, you should remember that your name should be unique, and it should not match the name of any other existing company, nor should it infringe any of the trademarks or services that are already registered with USPTO ( United States Patent and Trademark Office).
After successfully doing this, you can get your business registered by filing forms with the Secretary of State. After successfully filing the forms, the state will issue the certificate that can be used to apply for TIN (Tax Identification Number), business bank account, and licenses.
#5 Apply For Licenses And Permits
After registering your business, apply for all the necessary licenses and permits you require to run your business. These licenses will differ from industry to industry and from state to state. However, most businesses require a mix of local, state, and federal licenses; make sure that you consult with your attorney, or you can even visit the government office to make more informed decisions.
#6 Open A Business Bank Account
After starting a business, ensure you do not mix your personal accounts with business accounts; for this, it is important that you open a business bank account. To open a separate business bank account, you need a business name and your business tax identification number. You can use this account to carry out your business transactions, such as paying suppliers or invoicing customers. This account can even be used to issue a business loan and line of credit.
#7 Fund Your Business
This is a crucial step in starting a business. After developing a detailed business plan, ensure you can secure a good amount of funding before you start running your business operations. You can secure funding for your business in two ways: internal and external.
Sources Of Internal Funding:
- Personal savings
- Credit cards
- Funds from friends and family
Sources Of External Funding:
- Small business loans
- Small business grants
- Angel investors
- Venture capital
- Crowdfunding
You should utilize these sources in an appropriate ratio for optimal returns.
5 States For Starting Your Business
We have mentioned all the crucial steps that you need to follow for starting a business in the USA. However, the success of your business also largely depends on the legal jurisdiction you are opening your business. Here are the 5 states in the USA with business-friendly laws and regulations: Indiana, Colorado, North Dakota, Pennsylvania, and South Dakota.
