Being your own boss starts with the decision to make the big leap into entrepreneurship. Congratulations on taking that crucial first step! Now, you’re ready to learn how to start a business from scratch. But where do you begin? This guide will walk you through the process of starting a business, from pre-launch marketing to making your first sale.
1. Discover Your Big Idea
It all begins with an idea. To narrow down that idea, it’s important to know what kind of business and lifestyle you want to have. Are you looking to sell existing products as a low-lift side gig? Do you want to go all in on an invention that will change the world? Try fleshing out your idea to see how engaged you are with it. You can use a free business plan template to help you.
If you’re stuck, start by browsing hundreds of business ideas. Explore helpful tools to manage your day-to-day operations when opening an online store. Bookmark this guide as a reference to return to as you build your business.
2. Research Your Product and Audience
Once you have a brilliant product idea, it’s time to validate it. Your product or business idea may excite you, but it’s only worth pursuing if there’s an audience (a.k.a. future customers) looking for it. There are many ways to do your research upfront before you start investing. Look for gaps in the market, find an underserved audience, run a focus group, and investigate your competition.
Finding a target audience is crucial because it helps you make smart and cost-effective marketing decisions, influences your product development, and increases revenue. Building buyer personas is an effective method for drilling down into your ideal customers’ needs. Identify and get to know your target audience thoroughly to make informed decisions about your business.
3. Calculate Your Startup Costs
Once you’ve validated that there’s an audience hungry for your product and you’ve nailed your value proposition, it’s time to talk money. Your business will be viable if you have the funding to get it off the ground and you can identify a price that’ll turn a profit.
Writing a business plan is essential. A business plan is a document you can use to help you secure funding from a bank or venture capital firm. It forces you to answer important questions about how you will run your business. It includes everything from your mission statement to your financials.
Calculating startup costs involves accounting for all business costs. Your startup costs in the first year will help you cover everything from setting up a website to buying inventory to running your first paid ads. Be sure to consider unexpected costs like business insurance, taxes, legal fees, and shipping costs.
4. Source Products
Once you’ve validated your product idea, it’s time to bring it to life. Making or manufacturing a product involves setting up an appropriate space in your home, a rented studio or office, or a co-op. Be sure to check the legal requirements for setting up a home-based business, especially if you’re selling food or cosmetic items.
If your product is designed to be produced in a third-party facility, you’ll likely need to source a manufacturing partner. A good manufacturer understands your industry, knows packaging and labeling laws specific to your product or market, and can be a true partner in your business.
Finding a supplier is essential if you’ve opted to sell existing products. Research suppliers or other brands that you can source products from. Find the business model that applies to you and click through for a deep dive on how to find products for each, along with some examples.
5. Figure Out Your Shipping Strategy
Shipping is often cited by small business owners as one of the most challenging aspects of getting started. Luckily, tools aimed at simplifying this task keep getting better. E-commerce platforms like Shopify consolidate rates to help you make informed shipping decisions. App integrations can solve specific shipping issues or help you more easily manage inventory.
Setting up shipping and fulfillment involves deciding how you will handle order fulfillment. For many new business owners, that means personally packaging and shipping orders one by one. Managing your own fulfillment in the early days helps you better understand all aspects of your business. As you grow, you may decide to outsource shipping and fulfillment to a third-party logistics (3PL) company.
Shipping cost is often a factor in a customer’s decision to buy from your business. You can decide to offer free shipping and build that cost into retail prices or, if you’re passing on the cost, take steps to keep those costs as low as possible. Ways to reduce shipping costs include reducing the weight of packages, choosing the right-sized packaging for the product, using flat-rate shipping when possible, using Shopify Shipping to cut carrier costs, knowing when rates change so you can adjust accordingly, offering local delivery or pickup as an alternative for in-town customers.
6. Develop a Brand Strategy and Brand Identity
Aside from a unique product or exemplary service, your brand is the driving force behind a customer’s decision to buy from you. Your brand is more than a business name or a logo. It is a guiding set of principles and design specifications that tell your story, create consistency, and build trust. A branding exercise will create the foundation upon which you make creative decisions for your brand as you grow.
To develop your brand strategy, answer questions like: How do you want customers to feel when they interact with your brand? What’s important to you (such as giving back, excellent customer service, fair wages for staff)? What colors and design styles appeal to you and represent the mood you’re trying to achieve? The answers to these will help inform the rest of the branding exercise.
Next, brainstorm business names and domain names. It’s important that you research any potential business name to see if it is already used (and therefore could cause confusion or legal issues) and if the social handles and domain are available. Once you’ve landed on a name, secure it by setting up social profiles and registering the domain.
Establishing brand voice and story is crucial. Brand voice is how your business speaks to customers and the world. It incorporates decisions around tone, personality, brand vocabulary, and slang. Defining your distinct brand voice is important as it can spark recognition, influence perception, build trust, create connection, and ensure consistency.
Designing a visual identity encompasses anything that impacts how your customers, and the general public, see your brand out in the world. This includes your logo, fonts you use on your website, photography, and color choices. These design decisions and assets will all be captured within your brand guidelines or style guide. If you’re not a designer, it’s still possible to DIY your visual brand and design a logo with some free tools and a few tips from the pros.
Bringing your brand to life involves making decisions about assets like photography, printed materials, and packaging. Customers should have a seamless experience from the initial interaction with your brand online to receiving their order.
7. Build and Launch Your Website
At this stage, you’ve secured a product and committed to your brand. Now, it’s time to assemble all that hard work into a website and introduce it to the world. There are several e-commerce website builders on the market, and you will need to weigh the options based on factors like available features, website cost, and ease of use.
Designing and building an e-commerce website involves uploading products and other brand assets. Consider browsing the Shopify App Store for apps to help you improve the functionality of your store. There are many free Shopify apps that can do everything from taking appointment bookings to automating the returns process.
Launching your business is a critical phase in your journey where you can soft launch your website to the world. This is an opportunity to stress test your website, gather customer feedback, and tweak before your big grand opening.
8. Register Your Business
Depending on the countries or regions where you do business, you may be subject to a set of rules that govern how you manufacture, market, and ship your products. First, you’ll need to decide on a business structure. In some cases, you will need to officially register your business. Check with your local government agency to ensure you’re doing business above board.
Deciding on a business structure involves understanding the characteristics of each type of business structure. Whether you choose to be a sole proprietor or take on a business partner, be sure to clearly outline the business ownership details. Registering a business with the government and IRS is essential to ensure you’re doing business legally.
Securing business insurance is important to protect yourself, your business, and your employees in the event of unexpected hardship. Consider all the possible scenarios that could grind your business to a halt, including natural disasters, health issues among staff, a bad batch of product, or even a lawsuit. Purchasing an insurance policy is the best protection.
9. Manage Your Money
The key to a successful business can usually boil down to finding the right product for the right market at the right time. But sustaining that success depends on many other things happening behind the scenes. When you have a good handle on your finances, you’re ensuring that you’re not overspending and that you have a safety net if your luck changes.
Opening a business bank account is an important first step. Setting up a business bank account allows you to separate your personal and business finances. Explore various business banking products like a business credit card to determine which suits your needs. When choosing the right bank for your business, ask questions like whether the bank is small-business-friendly, what the reputation of the bank is in the market, whether it offers solutions and financial advice tailored to your industry, what the fee structure is, and whether the bank has a hassle-free loan process.
Managing your finances involves creating a financial plan, understanding financial statements like balance sheets, income statements, and cash flow statements, choosing small business accounting software, paying business tax, charging tax, and setting up marketing analytics.
10. Market Your Business
Marketing is reported as one of the most challenging aspects of running your own business, but it’s also the area where you will spend much of your time and budget. Launching a successful website requires ongoing campaigns to actively drive traffic to it and convert those visitors into buyers.
Creating a marketing plan is essential to set goals and have a backup plan. Invest in organic marketing, explore marketing channels like email, Google, Instagram, Facebook, TikTok, and others, build a content strategy, focus on conversion rate optimization, set up marketing analytics, and build a community around your brand.
11. Grow Your Business
By now, your small business should be a well-oiled machine. Take a moment to celebrate your wins! If you’ve made it this far, you’ve successfully turned a kernel of an idea into a living, breathing small business. The most exciting part? You’ve built a lifestyle around your passion. Enjoy the ride and remember to take care of yourself along the way.
In conclusion, starting a business is an exciting journey that involves careful planning, research, and execution. By following the steps outlined in this guide, you can set yourself up for success and build a thriving business from scratch. Remember to stay flexible, adapt to changes in the market, and always prioritize the needs of your customers. Good luck on your entrepreneurial journey!
