How to start a business!

Are you thinking of starting a business? Maybe you’re trying to figure out the first steps in “How to start a business?” Or, maybe you’ve started your business and just aren’t sure how to make sales. Whether you want to start a corporation, or a lip gloss business, a manufacturing company, or a blog, a home business, or a clothing, a non-profit organization or even an electronic business the starting process as well as the marketing process is the same and you’re in the right place and right now is the right time!

Join Andrea Cottingham, the CEO of Knead Web Design as she discusses some of the key factors of starting a business from a Sole Proprietorship, to an LLC, and partnership to a corporation. Start your business now! This information is also ideal for you if you are trying to figure out where to sell or how to sell your products as we discuss some of the marketing strategies used to target directly to your customer in today’s market. When we’re done you will no longer ask “How to start a business?” but, will say “I am starting my business!”

Filing a business Entity

Lets first discuss some of the different filing entities that you can file your business under.

Sole Proprietorships –

In a sole proprietorship there is no legal distinction between a business and an individual owning and operating that business. So, what this means, is that if any legal conflicts arise then the owner of said sole proprietorship and all of his/her assets could potentially become part of a judgment.

Sole proprietorships are legally required to use their name but, if they wish to operate under a different name they can register a trade name or a DBA(doing business as) name as well.

Partnerships

A partnership is a formal arrangement of at least two parties in order to manage and operate a business and share its profits. There are four main types of partnerships including those mentioned below.

General partnership

This is the most basic form of a partnership where forming a business entity with the state is not necessarily required. In most instances there is some sort of contractual partnership agreement signed by the partners.

In this type of partnership all partners have independent power to do things such as take out a loan. Though if any individual partner takes out a loan all partners are liable for the repayment.

Also in this type of partnership, though ownership and profits are generally split evenly, the terms of the partnership can be negotiated differently as per their partnership agreement.

Limited partnership (LP)

A limited partnership has at least 1 general partner that is fully responsible for the business and at least one “silent partner” who provides money but doesn’t actively manage the business.

This type of partnership is a formal business entity and needs to be authorized by the state.

Limited partners are investors for financial return and are not responsible for debts, liabilities, or losses more than what they’ve invested.

Some LPs choose to appoint an LLC as the general partner so that none of the partners bear the total burden of the business.

Limited liability partnership

A limited liability partnership has all partners actively managing the business and though still bear full responsibility for debts and liabilities they are not responsible for the other partners’ actions.

LLP’s are not available in all states and sometimes are limited to specific professions like doctors, lawyers, accountants, etc.

Limited liability limited partnership

A limited liability limited partnership is one of the newest partnerships and is only available in about 25 states currently.

A limited liability limited partnership operates pretty similarly to an LP except for the fact that limits the General partner’s, who manages the business, liability so that all partners have some form liability protection.

cover photo gif of person walking on the beach symbolizing starting a business - the next steps

Corporations

A corporation is a company or group of people who are authorized to act as a single entity (legally a person) and recognized as such in law. The owners of a corporation are separate and distinct from the corporation itself. Corporations have most rights and responsibilities that individuals posses in that they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and even pay taxes.

C corporation

A “C corporation” refers to any corporation that, under the United States federal income tax law, is taxed separately from its owners. A C corporation has no limit on the number of shareholders, regardless of whether they are foreign or domestic. Any distribution from the earnings and profits of a C corporation is treated as a dividend for U.S. income tax purposes. There are exceptions to that as well and you’ll want to check your state and federal regulations to insure you have adequate and accurate information.

S Corporation

An S corporation is merely a corporation that elects to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes. In this type of corporation taxes resemble that of a partnership for federal income purposes. Similarly, income is taxed at the shareholder level as opposed to the corporate level.

In order to elect to be treated as an S corporation several requirements must be met.

In addition it must be an eligible entity. For example a domestic corporation or an LLC which has elected to be taxed as a corporation.

Firstly, only has one class of stock

Secondly, Must have at least 1 but not more than 100 shareholders

Third, can only have allowable shareholders

Fourth, may be individuals, certain trusts, and estates

Can not be partnerships, corporations, or non-resident alien shareholders

Can not be an ineligible corporation (I.E. certain financial institutions, insurance companies, and domestic international sales corps, may be ineligible corporations)

The primary difference between a corporation and a company is the size. The corporation is a big business or entity whereas the company is typically a small business or entity. The owners of a corporation are its shareholders, whereas the owner of the company are its members.

An Limited Liability Company (LLC) –

A limited liability company (LLC) is a sort of blended partnership and corporate structure. It provides limited liability to its owners in the vast majority of the US jurisdictions. The primary characteristic an LLC shares with a corporation is its limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation which means that the tax returns of the business is literally passed through to the tax returns of the individuals who own the business. It is often more flexible than a corporation.

An LLC is a sort of company, therefore the owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. Most states also permit “single-member” LLCs, or those having only one owner.

There are a few types of businesses that generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are also special rules for foreign LLCs.

Non–profit organization

A nonprofit organization is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit and/or dividends. While non-profit or not-for-profit organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, future or current plans.

A nonprofit organization can organize itself in four ways – as an unincorporated association, a trust, a corporation, or limited liability company. However, the IRS only recognizes LLCs as a nonprofit 501(c)(3) if all of its members are 501(c)(3) organizations.

For most non-profit organizations, a corporation offers the most advantages, but a trust or association may also be the best fit in some instances.

Marketing – How to sell

If you’re wondering how to sell your products or where to start then start here. Follow the instructions listed below and you’ll be well on your way to a successful business!

Getting organized

The most important step in your journey in how to start a business is to get organized. A lot of times as small businesses we wear a lot of hats and so it’s very easy to be disorganized however, if you plan on making this business a successful one, getting organized ahead of the game is a priority that you can’t afford to skimp out on.

Set up and claim you business online

Secondly there are places like google or yelp where you can claim your business. That way people can leave you reviews and you can tie it in with your website and direct people to contact you.

Get a website –

Thirdly getting a website is imperative for the professional appearance when you’re considering how to start a business. We’ve spoken to many people who want to build websites themselves and that it absolutely a possibility. However, when doing so we recommend taking into account the time spent for the results that you’ll achieve. There is much more that goes into a website than design. There is Search engine optimization, back linking, structure, anchor links etc. These are all things that make search engines index a good website and give your potential clients the ability to find your products and/or services.

DIY Websites

If you opt to do a website yourself keep in mind that it is acting as the 24/7 face of your business. It is oftentimes what customers see first upon attempting to interact with you. An unprofessional website or a website that doesn’t show up at all may be the determining factor between obtaining a client and loosing one. <>Often times DIY websites can’t be found and get lost in the shuffle and even more times they end up costing you more in the long run after running into styling conflicts and other unforeseen costs. With all of this being said, getting a website is imperative to the success of your business. It enables you to touch markets even social media can’t capture. So get online!

Leverage social media

Fourthly Leverage social media to promote your brand. Don’t expect to become a millionaire off social media but, if you do that’s great too! Social media is a great tool for your business to become a “household brand.” With 79% of the population using some form of social media it is imperative to put yourself in front of your customers and a lot of your potential customers will likely use some form of social media.

Analytical data – your target customer

Looking into the analytics will help you to speak your customer’s language. Google analytics is a great tool for that. Google adwords is also a great tool. Between the two once you have your target audience figured out then you can do a few general searches to see what keywords and phrases people who are looking for your products or services are searching for. Analytics are important because it not only helps to define your customer or target audience but, it also helps you to speak their language per say. In that you find not only what their searching for and interested in but how their searching for what their interested in. In essence “speaking their language.”

Create local awareness and establish a network

We talked about this a bit with social media but we’re not just talking about social media here. Wear your brand, be the brand, know your stuff and pitch really to anyone who will listen. Moreover, wearing your brand is kind of like an interview, most people practice to some extent for an interview. Practice selling yourself and your brand in that exact same way. Practice with the people you encounter in addition to friends and family alike. This helps to create awareness of your products and or services and it also helps to establish a network. If you don’t speak up how will people know that you have this amazing product or amazing service to offer?

Offer promotional deals.

Offering promotional deals really isn’t a requirement but it does help to create that awareness we talked about. It also helps people feel like they’re getting a deal and we know people love deals. So offer promotional deals if you can.

Where to advertise my business?

If you’re just getting starting or are thinking about the next steps in how to start a business you may be stuck asking the question “Where to advertise my business?” Therefore, it goes without saying that you need to advertise your products and or services in order for people to know about them. The population is more visual and so of course imagery and video ads really help to ramp up and sell your products and or service. Words and content help google to find that imagery. Websites help to link all of the three together for not only a professional designed but a well linked and easy to find product and or service. Social media, word of mouth, elevator pitches. All of these are advertising tools and all or most of these should be utilized to advertise a business.

How to come up with business ideas

Are you wondering how to come up with business ideas? Here are a few leads that will help you to start the idea generation process.

Think about what bugs you and do something about it.

When thinking of how to start a business the key to selling anything is to solve a problem your potential client may or may not know they have. What better way figure out what problem to solve than to be that client and solve the problem for yourself?

Ask yourself, “what’s next?”

Maybe you’ve mastered many things or maybe you really haven’t mastered anything at all. Either way this will help you what your next steps are. Ask yourself what it is that you really want to do next AND JUST DO IT. Do that thing that you really want to do solve that problem for yourself and it will help you to figure how to solve it for others. Once again.,

A niche is a differentiator between you and your competitors. It’s what helps set you and your competitors apart. It also tells your potential clients and your target audiences who you are and why they should buy from you. Find your niche.

Apply your skills to an entirely new field.

Think of what skills you possess and apply those skills to an entirely new field. Most skills are transferable. Meaning they can be used in many different fields. So if you’re good with cooking, you may be great at inventing. Cooking is an art form and it takes the right mindset to create something amazing. Or, maybe you’re good at singing. Using those same techniques you may be good with speech or speech therapy. Use those skills and apply them to an entirely new field.

Find a category that lacks recent innovations.

Find a category that lacks recent innovations. Right now with so many parents not content with with the current stay of education for their children you could figure out a way to streamline it without just the virtual meetings. Don’t just think about how to start a business find some category that lacks recent innovations and innovate to start your business!

Make a cheaper version of an existing product.

Here’s a tricky one. Make a cheaper version of an existing product. Don’t operate at a loss but be innovative in figuring out a cheaper way to create the product. Be innovative because innovating thinking will get you everywhere!

Talk to shoppers.

Talk to shoppers to see what they want and what they need. What are they missing out on. Do they wish there was more of something. Is there something they wish there was less of. What could they do without and read between the lines to see what they are really saying and listen to them when they tell you.

Write your business plan

Write your business plan to plan out what you wish to achieve from your business. Give yourself timelines and goals in order to be able to measure your success. IF you have a clear concise plan then it is easier to follow along with it. Also if you wish to secure funding this is a great way to help investors know what they can expect to achieve from investing in your business.

Delegate tasks

In conclusion delegate tasks. Most small businesses do everything and often wear so many hats. Naturally, they want to do everything themselves because their business is like their baby and they know that no one can take care of it better than they can, however, that’s not always a good idea. Maybe you don’t have many funds and can’t delegate right off the bat however, once you see a need arise delegate tasks. If you’re overwhelmed because you’re ridiculously overworked missing out on important tasks, deadlines etc, the time to delegate is long overdue and if you don’t delegate immediately you could potentially lose your business and we’re trying to start a business not lose one.

Above all these are the steps for your successful business

Firstly Do your research

Secondly Make a plan

Thirdly Plan out and delegate your finances

Fourthly Choose a business structure

Next Pick your business name and register it

Then Get any licensing and permits needed

Then Choose your accounting system

Finally Advertise, then advertise, and advertise some more

You can also view the video directly from Facebook here: Knead Web Design’s Live stream