The prospect of becoming an entrepreneur is exciting! While this journey opens up all sorts of possibilities, the road to bringing your dream to fruition typically comes with some hurdles. With the right know-how, you can overcome any obstacles.

Before you begin the process of your entrepreneurial pursuits, think about the following factors and steps you’ll need to take.

Choose the type of business

Before you do anything, you’ll want to brainstorm business ideas and decide what type of company you want to launch. As you decide, consider ideas you’re passionate about, if you possess the right skills, and whether there is a market gap to fill.

On the other hand, if a market is oversaturated, even if you sincerely care about what product or service you’ll be selling, it’ll be difficult to be viable and succeed. You want to be able to choose a niche that effectively solves a problem for your customers or else it’ll be hard to reach your target audience.

Create a business plan

Once you’ve determined the type of company you plan to open, it’s time to create a business plan. This strategic document is the framework for important aspects of your business. The first page will be your executive summary that outlines everything, including your mission. You’ll want to write this last as it’ll serve as your “elevator pitch”. You want to flesh out everything else first. Components of your business plan should include:

• Company description, along with its name, address, and team members you plan to hire

• Business goals, including your short and long-term objectives

• Description of products or services, pricing, customer demographics, sales strategy, distribution plans, and how you’ll supply and fulfill orders.

• Create a marketing and sales plan

• Perform a financial analysis of your company, make financial projections, and determine what kind of funding you’ll need.

• Do a SWOT analysis

An important step in your business plan is to not inadvertently overlook is conducting research to see where your company will fit in the current market. Be sure to more closely examine your competition, identify market gaps you may have missed, and, if located in a competitive environment, determine how you’ll distinguish and differentiate your company from competitors to attract your key audience.

Decide your business structure

As you build your business plan, you’ll also need to decide what type of business structure you want to operate as. Primary options include sole proprietorship, partnership, or corporation. Sole proprietorships and partnerships are typically very small businesses, whereas corporations are large and have specific rules. Whatever structure you choose, whether you’re hiring 100 people or planning to run your company alone, you can opt to become a Limited Liability Company (LLC). There are several benefits to becoming an LLC.

• Easy and straightforward to establish

• The “LLC” designation gives off a professional-sounding vibe

• Limits your personal assets and liability in the event legal action is taken against you

• Simple to maintain, just obtain required licenses and file annual reports (unlike the multitude of complexities corporations need to contend with)

One of the potential perceived disadvantages is the costs associated with maintaining an LLC. As LLC costs varies from one state to another, you’ll want to first check with your state to learn the expenses of filing fees and any annual fees associated with operating as an LLC in the location where you plan to open the business. This way, you’re prepared.

Determine marketing channels

To help your business succeed, you’ll need to market it. This will be a component of your overall business plan, but it deserves special mention. Once you identify your audience, you’ll need to figure out how you’re going to reach them.

Options include TV, radio, or print ads, along with online ads, including search engines, social media, and influencer marketing. Content and SEO marketing should be considered. You can absolutely use a marketing mix as long as it’s targeted. Learn where your key audience mostly spends its time and use this information to determine how to get more eyes on your brand.

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Create a financial plan

Financials will also be included in your overall business plan, but it’s important enough to discuss in more detail. Funding will be a core component of your business plan. Without enough money, you won’t be able to move forward. You’ll need a budget proposal, along with projected financial statements.

• Balance sheet

• Income statement

• Cash flow projection

• Sales forecast

• Financial projections

These are only a handful of the types of financial statements to build. When you create a budget proposal and projected financial statements, you should plan out for roughly five years. If you are pursuing one or more types of funding, you’ll need to have your financial plan fully fleshed out so investors or lenders can examine your documents as they make their decisions.

Register your business

After you’ve built a strong foundation for planning your business, it’s time to move forward, especially once you’ve decided on your business name and structure (such as an LLC). This step includes registering your business.

You’ll need to have your business name ready and ensure it doesn’t conflict with an existing business or infringe on any trademarks registered with the United States Patent and Trademark Office. As a part of this process, you’ll want to choose your domain name. Make it memorable and relative to your business, so people know instinctively what to expect.

You’ll register your business with the state, be assigned your tax identification number (TIN), and pay any fees with your state’s business agency. Separately, you’ll obtain an employer identification number (EIN) from the IRS (this is free).

Obtain required licenses and permits

Licenses and permits will vary by jurisdiction and industry. Most types of companies are required to have a mix of local, state, and federal licenses, so be sure to research any types of licenses or permits you’ll need to legally operate. Common licenses include:

• General business license

• Health permits

• Specific professional licenses (e.g. cosmetology, accounting, engineering, liquor, etc.)

• Zoning permit

• Sales tax permit

• Home-based business

You’ll want to make sure you’ve got all the correct licenses and permits in place that are pertinent to your business. You don’t want to inadvertently operate illegally and be penalized and/or potentially suffer damage to your newly established brand reputation.

Develop a customized growth plan

Even though you’re just starting your journey, it’s important to think about the road ahead. Make a list of everything to consider in the immediate time and a few years down the road. This is especially true if you expect to experience rapid growth. Businesses unprepared to handle quick growth can fail, but those prepared have plans in place to accommodate growth. Factors to consider include:

• Purchasing or leasing property

• Furniture

• Office equipment

• Technology

• Hiring/creating a talent pipeline

The options you choose should offer flexibility and scalability, so you can adequately handle expansion. For some components of your business, you may want to outsource. It can be cost-effective and, as a result, companies routinely outsource processes such as cybersecurity, software/network maintenance, accounting, human resources, and other tasks.

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Conclusion

Launching a new company involves numerous tasks and skills. Knowing what to expect will help you achieve your dream. However, even if you encounter some failures along the way, this doesn’t mean you didn’t succeed. Instead, use failures as learning opportunities for growth, improvement, and how to overcome adversity. It is often failures that lead entrepreneurs to big success because they’ve learned through trial and error.

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