To launch and build a successful business, it’s important to first understand how to start a small business.
While some of the steps to bring your small business idea to market will depend on the type of business, the industry you choose, and the products or services you will be providing, every business will need to follow these essential steps:
A great business starts with a great idea. However, even in the ideation stage, there are several approaches you can consider.
When developing your small business ideas, you can turn something you’re passionate about into a business. For example, if you love puzzles and care about quality and design, you might consider manufacturing your brand of puzzles. If you love to bake, perhaps you dream of opening your own bakery.
Another way to approach your small business idea is by solving a problem. Perhaps your area is growing in tourism but doesn’t have enough space for them. If you have extra space at your home or can buy an investment property, this may be an opportunity for you to explore hospitality.
Finding a need in your community is a fantastic place to start. You can also generate small business ideas through brainstorming. Write down any idea that comes to mind—big or small—and refine your idea in the next phase.
No matter how your business idea comes to mind, remember to be realistic about the demand and scalability of your potential business.
The next step in how to start a small business is to do some market research and take a hard look at the demand for your business idea to ensure that it’s viable. It’s important to do this before you spend time and money developing your business.
Questions you should seek answers to during this phase include:
Conducting market research for your small business idea will be helpful when you begin writing your business plan.
Testing your idea is a crucial aspect of starting your business. You can provide your service to a few people and get valuable feedback on how it’s working.
If you’re manufacturing a product, you can create a prototype and learn what works—and, just as importantly, what doesn’t. You can also find out how many potential customers might pay for your product or service. From there, you can refine your business idea.
A business model is a strategic plan for how a company will make money. The model describes the way a business will take its products or services, offer them to the market, and drive sales. A business model determines what products make sense for a company to sell, how it wants to promote its products, what type of people it should cater to, and what revenue streams it may expect.
A business plan outlines a step-by-step process to help you achieve your goals. It’s a foundational tool that helps to map out your plan for success and guides you through the stages of beginning and operating your business.
There is no one right way to write a business plan—it simply needs to meet your needs and the needs of your business. It can cover anything from high-level overviews about various aspects of your business to more detailed information on day-to-day operations and finances.
Topics you may consider including in your business plan:
You should think of your business plan as a living document, designed to be reviewed and adjusted over time.
Next it’s time to set up your small business, and there are several steps within this phase.
First, you will first want to choose a business name. It’s important to choose a business name that is available for use in Oregon, which you can check through the Oregon Secretary of State’s website. Businesses can also obtain a federal trademark. It’s a good idea to search the U.S. Patent and Trademark Office (USPTO) for similar business names to yours.
Next you will need to choose your business structure. Your business structure will influence your registration requirements, your tax responsibilities, and your personal liability. Choosing the right business structure will provide the right balance of legal protections and benefits.
Common legal structures include:
Once you have identified your business name and business structure, you can register your business in Oregon and apply online for your business’s federal Employer Identification Number (EIN) through the IRS, if applicable. Check here to see if an EIN is required for your business.
Being able to manage your finances well will be critical to the success of your small business. One way to get off to the right start is to ensure that you separate your personal and business expenses.
Open a separate business bank account, which can be used to receive payments and to pay for business-related expenses and overhead. LLCs, partnerships, and corporations are required by law to have separate bank accounts for business.
While sole proprietors are not legally required to have a separate account, opening a bank account for the business is a good idea.
You may also want to consider opening a business credit card to help with cash flow. Building credit is important for securing future funding should you need it.
You’ll then need to develop a bookkeeping system and choose accounting software to help track income and expenses. These systems typically provide invoicing for customers and easy and efficient ways to collect payment. As you grow your business, you can automate many aspects of the billing process.
At this stage, consider your skills and ability to:
If you’re unsure about how to manage the day-to-day bookkeeping and accounting responsibilities for your business, the PCC SBDC offers the Business Builders training program for small business owners to get a handle on their finances and accounting basics.
If you are planning to operate a brick-and-mortar business, choosing a business location is one of the most important decisions you will make before launch because it will determine the taxes, zoning laws, and regulations your small business will be subject to.
Consider your business’s target market, your personal preferences, and different government agencies' costs, benefits, and restrictions.
Costs that can vary significantly by location include:
Additionally, local zoning ordinances, taxes, and government incentives will also vary.
Regardless of what type of small business you’ll be operating, having a website as part of your online presence will be important in building your credibility with your customer base.
As you prepare to build your business website, the first step is to obtain a good domain name. That means finding a URL that is easy to spell, as short as possible, and memorable. Be sure to research the domain name to see if a similar web address already exists. Additionally, check with the USPTO to ensure that you haven’t included any registered trademarks.
Your website should clearly showcase your business products or services in a memorable and engaging way that drives results. As you create your site, consider beautiful graphics that are compressed and optimized for fast loading, easily accessible calls to action (such as “Buy now” or “Call now” buttons), and an intuitive navigation system.
Implementing search engine optimization (SEO) practices to ensure that search engines index and rank your website will also help with your business’s visibility.
Now that the groundwork of how to start a small business has been laid out, it’s time to find your potential customers.
Before you can build your customer base, you will need to know who your target audience and ideal customers are. Develop a plan for acquiring customers by understanding how a typical customer would find a product or service like yours. This may include marketing strategies such as building an online presence on social media, using text or email marketing, using paid media and advertising, and in-person networking opportunities.
It’s also helpful to research successful competitors to see where they advertise and what other strategies they use, as those may be beneficial for your own business efforts.
Successful business owners prepare for everything. When you’re learning how to start a small business, one thing to keep in mind is that there will always be unforeseen obstacles. Things are constantly changing, and the most successful entrepreneurs are those who are flexible and willing to adapt to their customers’ needs.
As a new business owner, you may also learn that there are aspects of your business that you aren’t sure how to manage, like payroll, business taxes, hiring, or marketing.
The PCC SBDC is here to help you work through all these considerations and more. Learn more about the Business Builders training program to see how business training can help you work through starting and building your business with confidence!
The PCC Small Business Development Center is committed to building Oregon’s best businesses by assisting small businesses with advising, training, and access to the resources they need to be successful. Learn more about how the PCC SBDC can support your business here!