Starting a new business comes with challenges and opportunities. First, we'd like to congratulate you on your independence and daring and to thank you as well. The entrepreneurial spirit fires the imagination and creates jobs. A new business started is a valuable contribution because while you're offering your product or service, you'll also be supporting your vendors, suppliers, employees and economic partners.

You've probably heard all the advice and already heeded it. You have your goals on a piece of poster board where you see them every morning before you head off to work. You've talked to lawyers and scoped out locations. You've researched your competitors and know exactly how your business will stand apart from the pack. You've pondered and argued and even talked to seasoned veterans who jokingly asked if you wanted to buy them out. 

If you're itching to get your hands dirty, then we're ready to show you how to plunge them into the details, right up to your elbows. We can't help you with the daily grind and heavy lifting, but we can give you some pointers for front-end tasks that stop many would-be entrepreneurs in their tracks. To make starting up easy (or at least easier), we've broken down the 4 main parts of the business startup process.

In this guide to starting a business:

How To Write a Business Plan
The Paperwork Maze
How Do I Fund My Business?
Marketing - Online And Off

  1. How To Write A Business Plan

    If you've done your homework, you'll be ready to create your formal business plan. While some will say you don't need one, if you're seeking investors or a loan, you'll absolutely need one. Gather all those estimates and notes, the vendor cost lists you've been accumulating and the dream catalogs showcasing everything you need. Don't forget a cup of coffee; in fact, you might want to bring the whole pot. Your business plan will need at least eight parts, and here are the highlights and some dos and don'ts for each.

    • Executive summary. In one to two pages, tell potential investors everything they need to know about your venture to make you their favorite risk. Think of it as a list of vital key judgments that could be separated from your business plan and still stand alone. Even though it's always listed first, you'll probably want to craft it last, as it will be the hardest section to write.

      Do: Start with a slick one-sentence pitch that encapsulates your entire business yet prompts a reader to want to keep reading. 
      Don't: Steer clear of subjective judgment words like great, good, fantastic, smart or bad. Your readers will make their own evaluations. Stick to the facts.

    • Company description. Introduce your company, and clearly state its intended purpose within your industry. What service or goods do you intend to provide, and where will you sell them?

      Do: Focus on what differentiates your service, product or venture from others. What is your specific contribution to your industry, your value-added distinction?
      Don't: Save the long history of how your idea came about or your business' evolution for a power lunch. You don't want to alienate your reader. Just keep to the relevant facts.

    • Market analysis. Provide proof that you've done your homework. You must demonstrate that a significant demand for your product or services exists and prove that your venture would be profitable.

      Do: Include pertinent facts and calculations from your research. Cite the narrowed, targeted audience and their buying statistics, especially if they've already purchased from you. Address competitors and saturation of the market if you'll have stiff competition.
      Don't: Overgeneralizing your customer base conveys sloppy analysis. If your product is for women, for example, specify which women in what geographic area; buying patterns vary widely according to age, disposable income and personal needs and wants.

    • Management and organization. Answer three complex questions: What are the legal parameters for your business, how will you run it, and are you the right person to do so? You'll need to disclose all details regarding ownership and established investment percentages, your business' legal structure, and owner and investor qualifications. Consider this your business' corporate-plus-résumés page.

      Do: Include demonstrated track records, and highlight special skills or accomplishments. Include experience, especially if partners compensate for skills you lack.
      Don't: Resist listing individuals who haven't formally committed to your venture or overstating investors' level of support or involvement. If they back out or fail to contribute anticipated help, you could face untenable debt.

    • Product or service. Detail your products or services that you intend to manufacture or sell. Focus on your service or your product, and share its full history. If you designed it and own intellectual property, include that information. If you're developing improved versions or associated products, that's important, too.

      Do: Demonstrate that your product or service is distinct and how it fulfills a current demand and future needs. Think in terms of past, present and future.
      Don't: Avoid laundry-listing facts and leaving readers to draw their own conclusions. Be sure to explain how and why your service or product alone would satisfy a continuing or growing demand. Investors specialize in finance and may know nothing about your industry.

    • Marketing and sales. Plan how you'll enter your markets and how you intend to grow. If you have a product, establish how you'll distribute it and who, specifically, will sell it. You also need to develop strategies to reach, educate and retain customers. 

      Do: Know and include every cost, from cradle to grave, for your service or product.
      Don't: Fail to address timelines and logistics, and cash flow will become a problem. You'll lose your momentum and your customers.

    • Funding. Justify the investment or loan amount you're requesting, and explain how you'll use it. Account for expenses needed to start the business and to maintain it until it shows profit. Some start-ups take several years to reach the break-even point. Others begin with a bang but quickly taper due to lack of financial planning for success.

      Do: Explore crowd-funding; micro-loans, angel investors and mentors; and federal, state and local small business grant and loan programs. 
      Don't: Exercise caution if you consider tapping irreplaceable funds saved for retirement. You may be able to get a business loan, and you will have to detail how you'll repay the debt; however, you won't be able to get a retirement loan.

    • Financial projections. Calculate what your business can achieve financially over the next 5 years based on past, present and future performances and costs. The first year may be the most difficult, as creditors may want quarterly or even monthly figures, but once you establish the groundwork, the rest should flow.

      Do: Ensure your financial projections match your expenses and funding. Your investment and funding numbers must match those used in your projections to justify anticipated profits. 
      Don't: Submitting incomplete financial statements and balance sheets may delay the process, spur additional scrutiny or even be cause for denial. If documentation is too involved for this section, include it in referenced, designated appendixes.

    • Appendixes. Use multiple appendixes if you need to submit documentation too extensive or detailed for the body of your business plan.

      Do: Reference appendixes in the appropriate sections of your business plan, and be sure references match.
      Don't: Never bury vital information solely in the appendix. Creditors may head straight for the numbers and fail to read any accompanying text. You can repeat a vital piece of information, but key financial analytics belong in the business plan's body sections.

  2. The Paperwork Maze 

    One of the biggest hindrances which entrepreneurs face is the bureaucratic process attached to starting a business. But don't let a stack of forms scare you out of reaching your goals. Once you break them down and understand what the various forms do, it's much easier to tackle them.

    • Registrations and licenses. If you can survive the paperwork, you should be a success at running your business. Between local, state and federal statutes and regulations, you'll have registrations and licenses that you'll need to file to ensure you're in compliance. The forms, however, also are a vital part of having your start-up acknowledged as a serious business. They actually benefit you in a number of ways, from protecting your business name and intellectual property to allowing you to apply for financial advantages. The Small Business Administration has complete interactive lists of all the forms, federal and state licenses, and registrations you'll need to consider. At the very least, you'll need to register your "doing business as" business name with your state government.
    • Taxes. Especially if you're contemplating being a business of one, you must be certain that your start-up is indeed a business and not a hobby. The Internal Revenue Service (IRS) has stringent criteria that your enterprise must meet in order to qualify as a business. The IRS website asks eight questions:

      1. Do the time and effort put into the activity indicate an intention to make a profit?
      2. Does the taxpayer depend on income from the activity?
      3. If there are losses, are they due to circumstances beyond the taxpayer's control, or did they occur in the start-up phase of the business?
      4. Has the taxpayer changed methods of operation to improve profitability?
      5. Does the taxpayer or his/her advisers have the knowledge needed to carry on the activity as a successful business?
      6. Has the taxpayer made a profit in similar activities in the past?
      7. Does the activity make a profit in some years? 
      8. Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

      These questions lead to the fact that over a 5-year period, you should be able to demonstrate "profit during at least three of the last five tax years, including the current year." Basically, you need to show a profit by your third year of operation. Otherwise, you risk having your business declared a hobby for tax purposes.

    • Employee benefits. Under the Affordable Care Act employer mandate, if you employ 50 or more full-time equivalent employees, you'll have to offer affordable healthcare benefits to your full-time employees. Failure to do so can result in a fine of up to $3,000 per full-time employee. If you have fewer than 50 full-time equivalent employees and offer employer-sponsored healthcare benefits, you may be eligible for tax credits for up to 50 percent of your contribution as long as you pay at least half of employee premiums. Full-time equivalent employee figures account for part-time employees' total comparable hours as well as actual full-time employees. If you hire four half-time employees, they would be considered two full-time equivalent employees.
  3. How Do I Fund My Business?

    Financing your new business until it can pay for itself will be one of your biggest challenges in most cases. But sources of funding are out there if you are willing to look for them. Before you go out looking for funding, make sure you understand exactly how much money you will really need. Raising too little funding may leave your business stranded just before the profits begin to role in.

    Financial Needs Of A New Business

    • Expenses. The first step in determining how to fund your business is in knowing exactly how much money you're going to need not only for start-up expenses but also for the first year or more of recurring expenses. Start-up costs include everything from your equipment and operating systems to the signage on your door or your website design. Recurring expenses are regular, monthly or quarterly costs like utilities, vendor services, salaries or inventory.
    • Budgets. To start, you'll need to budget for both start-up and recurring expenses, anticipating lag times until you actually become profitable. In the meantime, you'll still need money to keep the doors open. Many entrepreneurs start by creating their dream budget, whittling it down to a comfortable budget and then paring it still further to a bare-bones version. Somewhere between comfort and bare bones, a workable budget usually exists that will let you both start and sustain your business. Work your numbers until you find it.
    • Responsibilities. Don't forget your regular, household budget; everyday living expenses continue, regardless of how your business performs. How you handle personal finances can impact plans for and investment in your business.

    Funding Sources

    • Crowd-sourcing or crowd-funding. Sites like Kickstarter and Indiegogo give you a place where you can post your aspirations and let anyone who likes your idea invest in you. Some sites specialize in focus, like Teespring, a tee shirt crowd-funding site, or Patreon (exclusively for creative projects). Some are more short-term-oriented, but if you're working on a prototype, a crowd-funding site might give you just what you need to start. Just be aware of fees or other financial requirements.
    • Micro-loans. Usually less than $50,000, micro-loans allow small business owners to borrow modest amounts. According to the Small Business Administration, the average micro-loan is $13,000, but some loans are for as little as $5,000. Lenders commonly require collateral, and in return, you can apply the loan money to machinery, equipment, office furniture, fixtures, inventory or supplies. You can also use it as working capital to cover short-term debt.
    • Angel investors. If you're willing to trade equity in your company for funds, finding an angel investor might be a smart move, especially if you can connect with one who understands your area of expertise. Many states, cities and industries maintain lists or support forums where entrepreneurs and potential investors can meet. Just be sure to check that you're dealing with a reputable organization and vetted angel investors. Even though they're "angels," they still need to meet the Securities and Exchange Commission's definition of accredited investors: have a net worth of $1 million and earn $200,000 a year.
    • Venture capitalists. Venture capitalists specialize in the start-up process. They know their space and are highly selective, often preferring products or services that are unique and proprietary. They're looking for businesses that will grow rapidly and scale well. In exchange for their money and expertise, they usually command a significant portion of equity and degree of control. Venture capitalists vary, from large operations to individuals, and are often listed alongside angel investors or on chamber of commerce websites. Many prefer to invest locally, but even if you share a hometown, be prepared to answer the tough questions.
    • Incubators and accelerators. Designed to provide know-how, mentorship and guidance to start-ups, incubators and accelerators may offer financial assistance as well. Often affiliated with local chambers of commerce or regional investment companies, they may provide work space and other resource support in addition to grants and loans. Ensure that you're dealing with a reputable organization, and check for membership requirements or fees.
    • Business loans. The Small Business Administration maintains lists of lenders who will provide loans to start-up or small businesses. Not every bank will finance a start-up, but many small, community banks do. Community banks provide about 60 percent of all loans made to small businesses; credit unions count, too. The median small business loan is usually between $130,000 and $140,000, with a high range of $250,000.
  4. Marketing – Online And Off

    As the elements of your business fall into place, planning for effective marketing will become essential. However, haphazard or poorly targeted efforts will consume funds and yield few results. Consider carefully what strategies will best introduce your product or services to the customers most likely to need or want it. 

    Physical Marketing

    Throwing too wide a net may carry too high a cost when compared with the number of customers acquired. Pricey magazine or newspaper ads can be one-shot nonstarters. Even using Groupon can backfire, leaving you with spare margins while bargain-hunters search for the next deal. 

    If you're manufacturing a product to be sold through another retail operation, for example, you may want to investigate gondola displays or product positioning near checkouts or aisle ends. If you're going to have to travel to sell your services, tailor your approach to your specific customers in each territory. One of the most basic and simplest of tactics is to make your signage attractive, visible and easy to read. Keep the outside of your business clean and neat, and be sure that your operation hours are easily visible. An establishment's appearance speaks volumes about quality, service and credibility.

    Online Marketing

    Remember that 80 to 90 percent of customers will search websites to find a product or service and read online reviews before they buy. Even if you have a brick-and-mortar establishment or operate from your home, Internet presence is a factor. It can help establish you as a credible brand, but it doesn't have to wreck the budget. You'll want at least a modest Web page, and you can set up business pages on social media sites. However, the most important factor will be your SEO, or search engine optimization.

    When you type a search into Google, for example, the search engines comb the Web for matches to the terms, keywords or key phrases you entered. Hopefully, your search results will contain pages with the words you asked for in an appropriate context. You need to consider the terms that other people will be using when they search for the products or services you're offering. Will they ask a question? Will they ask how much something costs? Will they be looking for a how-to? 

    One of the most frequent keywords they will be typing in is a geographic location. You want to be sure that customers can find and contact you: 

    • If you set up a website, be sure to put your address in the footer as well as a "contact us" and an "about us" link. When clients want to find your information quickly, they'll head for your page's footer first.
    • Take advantage of opportunities to establish landing pages like Google+ Local Page. While many of these list just the basics, those basics are all your customers need: your business name, address, hours of operation and phone number. Most have one-click dialing or directions options, too, as well as links for images or even your actual website.
    • Include the locales in your service area. If you're in a city, you may want to incorporate the names of counties, parishes, boroughs or suburbs into online posts. If you're in a more rural setting, use the names of surrounding towns.

The best marketing strategy you have is completely free, and that is to do the best job you can possibly do. Social media is powerful in all its forms, and word of mouth becomes your brand ambassador on Twitter, Instagram, Yik Yak and at least that many more. You have a dream, and you can make it reality. The resources exist to help you every step of the way. When in doubt, check the Small Business Administration's website, and don't forget your local chambers of commerce. Find a mentor, and look for those angel investors. Maybe one day, you, too, will earn your wings.

Additional Resources At