Straight from scratch: How to launch a business

Start a business in 7 easy steps

Every business startup is unique, yet the steps toward a functioning business are similar and correspond to the following points:

1. formulating a business idea & creating a business plan
2. selecting a business location
3. financing your business
4. determining your business's legal structure & registering your business name
5. getting a tax identification number
6. registering for state and local taxes
7. obtaining necessary business licenses and permits

Below you will find further information on some of the initial key steps for start-ups:

Business Idea

When initially establishing a company, the main challenge is finding the right business idea. The business idea must not, as it is often assumed, be new or inventive. Often the success of a business start-up is developing an optimized version of an already existing concept. 

Business Plan

A business plan is an essential part of every new business or company, as it lays the groundwork for a company and informs the reader about what the company has planned and how they intend to implement it. You need this in almost every phase of starting your business, especially when trying to secure funding, e.g., for a grant, bank loans or for other funding options such as through venture capitalists or angel investors.

Learn more about business plan.

Business Credit

A business credit is a contract which allows one party, usually a bank, credit institution or investor, to provide financial resources to another party. Gaining a line of credit has become an extremely popular option for small business owners and entrepreneurs. Often these types of businesses do not have the means to start a business on their own, so they turn to financial institutions to assist in the capital aspect of business implementation. 

Business Structure

You will need to determine the correct business structure for your small business. Most founders decide to go it alone as a sole proprietorship, whereas other would rather work with a business partner in a general or form of limited partnership.

Liability issues, tax obligations, investment needs, size and scope of your business, the level of control you wish to have, and your business's expected profit are things to take into consideration when deciding which business structure to go with.

Read more about Business Structure and Legal Forms.

Business Bank Account

It is important to keep your personal finances separate from your business's finances, even if you are using bootstrapping to get your business running, it is important to know which expenses belong where. Moreover, this is part of having a business identity and is required by the IRS. By opening up a business bank account, for example, your business will be able to keep your business's incomes, expenses, deposits and withdraws detached from those related to your personal life, which will in turn make your bookkeeping much easier.

Learn more about business finances.

Accounting

Accounting has become known as the language of business and as it is simply the most common way for companies to communicate their core business. The best companies in the world spend millions each year on employing the best accountants in the world to develop in-house accounting software to make sure their books are accurate and thorough.

Accounting is a must for any business as it will help you understand how to make changes in your business, allowing your company to become more profitable.