11 Steps on How to Start a Small Business in 2020

The first quarter of 2020, with all its mess, left many employees with a cut in salary, an unclear future, or even completely jobless. The unemployment rates worldwide keep growing and are projected to reach the highest level since the great depression and not return to their pre-pandemic levels until 2022 at the earliest, according to the Organization for Economic and Cooperation and Development. So looking for a new job is also tough these days.

But as they say, “When life gives you lemons, make lemonade!” So if you’ve been sitting at your job for years, dreaming about starting your own small business, but didn’t have enough courage for it — now is the time!

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So, while many people are still stuck at home, without a job and opportunity to travel, starting a small business in 2020 to be able to cater to those people, might be a great call if you plan it out well.

If you’ve ever listened to millionaires and successful businessmen, you probably know that you don’t have to have a fancy college degree or millions in the bank but rather the drive to succeed, commitment to work hard, and a smart business idea that will bring some value to your clients, whether it’ll be a product or a service. 

So if you’re asking yourself how to start a small business to ensure your success, look no further. 

Here are 11 steps you need to follow in order to start a business successfully, take each one a day at a time. Don’t rush the process and you’re well on your way to small business success.

 

11 Steps on How to Start a Small Business

 

11 Steps on How to Start a Small Business in 2020

 

1. It All Starts With You

Before you do anything, ask yourself this: why do you want to start a business? Once you have the answer, you’ll know what kind of business you’ll start. For example, if you need extra money consider a side project. Or if you want more flexibility, it’s time to leave that 9-to-5 job for good. 

Before actually starting your own business, go and watch the 2020 small business trends to get some inspiration and ideas.

Oh, by the way, sometimes the reason for starting a new business is the failure of the previous one. If that’s the case — check our dedicated blog on rebuilding a damaged business, before starting a new one.

Now that you have the reason down, ask yourself even more questions so you can determine which business type to start and if you’ll succeed. 

  • What are your skills?
  • What are the best tools needed for a small business you have and know how to use, or willing to learn?
  • What are you passionate about and how will it help?
  • What is your area of expertise?
  • How much can you afford to spend? 
  • How much capital will you need?
  • What kind of lifestyle do you want to live?
  • Are you sure you’re ready to be an entrepreneur?

Make sure you answer the questions truthfully, this isn’t the time to sugarcoat anything. The answers will help you create a foundation going forward so it’s better, to be honest now. 

 

2. Choose Your Business Idea 

Creating a business idea means being realistic before anything else.

You can have a look at 101 best business ideas for 2020 online, but you need to evaluate every one of them individually and realistically. If that’s gonna be your business — will it succeed? What’s the likelihood of its success? Think about this before moving forward. Are you wondering how you can realistically answer this? Ask yourself this:

  • What is the need for your “new” products/services?
  • Who needs it?
  • Who else offers this similar product/service?
  • Right now, what is the competition like?
  • Where does your business fit into the market?

Remember that a small business will only succeed if it solves a problem(s), fulfills a need, or offers something that the market wants. So be true to yourself and try to assess and validate every business idea you are considering with full honesty.

By the way, if you’re thinking of starting a cleaning business, starting a pressure-washing business, starting a security company, or a lawn-care business — make sure to check our dedicated blogs on that.

 

3. Develop A Plan

A business plan is a map that guides your business from startup to establishment to growth – it is key for every new business to develop. It’s a description of how your business will evolve from start to finish. And yes, there are numerous types of business plans to choose from. Feel free to use our free business plan template to start with.

If you require financial support from an investor or a financial institution then a traditional business plan is crucial. This is typically long, thorough, and has sections laid out so investors and banks can quickly review to validate your proposal. 

However, if you don’t believe you need financial then a simple one-page business plan is enough to lay out how you will achieve success. It is best to have a plan written down than to have nothing at all when starting a small business.

A business plan is key when starting your own business.

Include the following in your business plan:

  • Title page. Write down the name of your business! (Or the proposed name of your business). And it sounds easier said than done, do research before choosing a name out of a hat
  • Executive summary. This is the outline of your business plan and is a high-level summary of what the entire plan includes, such as the company description, the problem the business is solving, the solution, and why now. This tells the reader what you want and is key.
  • Business description. Answer the following in this section: What business are you looking to start? What’s the industry look like now and what will it look like in the future?
  • Business tools. What are the best small business tools that you need to learn or utilize in order to make the most out of your business?  
  • Market strategies. Explain what your target market is, and how you plan to best sell to that market?
  • Competitive analysis. Include the strengths and weaknesses of your competitors, and how you’ll beat them. 
  • Design and development plan. Describe your product or service and how you plan to develop it. Then outline the budget for that product or service.
  • Business operations and management plan. On a daily basis, establish how the business will function. Are you gonna be a solopreneur or planning on hiring people in the future? If so, you need to start thinking about management solutions in advance. 
  • Finance factors. Where will the money come from? When and how? What projections can you create and what should you take into consideration?

For each question, you need around one to three pages. Remember that a business plan develops, grows, and changes as your business grows so you are always updating it to match your current situation.

 

4. Sort Your Finances

When starting a small business, you might need an initial investment to cover ongoing expenses before you turn a profit. Consider the one-time costs, like licenses and permits, insurance, trademarking, and so on. And add to that the money you will need to keep your business running for a year, such as rent, utilities, production, and so on. 

The numbers combined amount to the initial investment you will need.

The following are options available on funding your small business: 

 

Sort your finances when starting your business.

Don’t forget, that getting the finances right is not only about bringing the money in but also about optimizing the expenses and reducing your operational costs.

Sometimes a combination of the options above will work best for you. The goal is to review the options and create a plan that sets up the capital needed to get your business up and running. 

 

5. Know Which Business Structure is Right For You

There are a few options of what your small business could be: a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. Whichever business entity you choose has a direct impact on various factors, such as your business name,  liability, how you file your taxes, etc.

It is fine if you choose an initial business structure but then reevaluate and change your structure, this is common as your business grows and requires change.

It might be worth investing in a consultation with an attorney or CPA so you can be sure you are choosing the right structure for your business. 

But in any case, as long as you have business partners you’re gonna share any sensitive information with — make sure they sign a non-disclosure agreement beforehand.

 

6. Choose and Register Your Business Name

We briefly hinted on this, but the name of your business is a key component in every single aspect of your business. That’s why it has to be great. Consider all implications as you examine what your options are and choose your business name.

Once you choose a business name, you need to check if it is trademarked or is currently in use. Then, if all is okay, you need to register it. If you are a sole proprietor, then you must register the business name with the state or county clerk. Corporations, LLCs, or limited partnerships usually register the business name when the formation paperwork is filed.

Be sure to register your domain name once you choose a business name.

 

7. Get All the Licenses and Permits Required

When starting a small business, paperwork is a necessary evil. 

There are many kinds of small business licenses and permits which may apply to your situation, this depends on the business type you’re starting and where you’re located. Research what licenses and permits will apply to your business during the start-up process.”

Follow these steps when starting your own business.

8. Pick An Accounting System

There is no doubt that small businesses run effectively when systems are in place, a key component is an accounting system.

An accounting system is vital in creating and managing your budget, setting rates and prices, conducting business, and filing taxes. You can either set the accounting system yourself or hire an accountant, but dealing with employees’ payroll and tracking their working hours might be a lot of work, especially if you try doing it the “old school” way.

 

9. Get Your Business Location Ready

A business location is an important aspect of your setting your business up. Whether it’s a home office, a shared space, or a retail location, location matters.

Consider the location, equipment, and overall setup, so you can ensure your business location works for the business type you are creating. Consider if it is better to buy or lease your commercial space.

Choosing a business location is one step to starting your business.

10. Prepare Your Team

If you are planning to hire employees, you need to outline which positions are needed to fill and their subsequent responsibilities. If employees don’t need to be hired, and instead you need outsourced work then work with an attorney to create an independent contractor agreement. But even when hiring staff from outsourcing and outstaffing agencies, you need to be ready to deal with managing their job schedules and planning shifts.

The following tips can help you find the right employees:

  • State goals clearly. 

From day one, your employees need to know the company vision and goals, and how their job role will affect the company. 

  • Follow the hiring processes. 

During the hiring process, you need to ask the right questions and know what qualities make a good employee. Once you know this, it’s easier to bring the right people onboard. 

  • Establish a strong company culture. 

Creating a great company culture is key to employee productivity, loyalty, and engagement. You need to respect, engage, and empower employees from day one while also offering amazing incentives (and no, money and promotions aren’t all employees care about). 

  • Utilize an all-in-one management mobile app solution. 

Choosing a smart and affordable all-in-one mobile app, like Connecteam, will help you save time and money on the operational work and actually focus on growing your business. 

 

Connecteam makes it easier to 

It is intuitive and easy to use software specifically created for small businesses with a free trial and free-for-life plans available.

 

Boost your small business with a single app

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11. Spread the Word About Your Small Business

Now that your business is officially up and running, it’s time to bring in customers. You can start by creating a unique selling proposition that separates you from the competition and creating a marketing plan that promotes your business most effectively. Don’t be shy to promote your own business, until your happy customers will start spreading the word for you — it’s your job!

Bottom Line On Starting Your Small Business

Once you complete the 11 steps we outlined on starting a small business, you have all your bases covered so you can focus on the big picture and succeed. But be patient, success doesn’t happen overnight. Consistently work on your business and you will see success.

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