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Whether you have a product to sell or are looking for a profitable idea, this guide walks you through starting a business, from pre-launch to first sale.
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Being your own boss starts with launching a business.
Entrepreneurship is one of the most exciting, potentially life-changing things you can do. But how do you start?
Maybe you already have a brilliant product you want to sell online. Perhaps you’ve built an engaged audience on social media. Or, you could be looking for that first business idea. Wherever you are in your business journey, this guide walks you through the 11 essential steps anyone needs to consider.
Ahead, find out how to refine your business plan, analyze the competition, register your business, and make your first sale. Then, keep growing with information on how to scale your business through marketing and funding.
Ready to start your business? Create your website today or learn more about Shopify’s tools for selling online and in person.
Starting a business begins with an idea. What unique product, service, or solution can you offer?
A method many entrepreneurs use to develop business ideas is to identify a niche. A niche is a specialized market segment that may be underserved or overlooked by other businesses. For example, identifying niches in the pet supplies industry could inspire an organic pet food business or a store selling toys for large cats.
Alternatively, you could use the knowledge, skills, or crafts you already possess to find a business idea. For example, if you’re a skilled carpenter, you could start a custom furniture business. Or if you’re passionate about fitness, you could start a personal training service.
Learn more about coming up with a business idea.
Once you have an idea, watch this video for more insights on how to evaluate its profitability and sustainability:
If you’re looking for an inspiring business idea, try these helpful lists:
An art major developed a product to fill a market gap
Yelitsa Jean-Charles was dissatisfied by the options for dolls with Black hair. So she designed her own. She built her successful business, Healthy Roots Dolls, to teach a generation to love their curls.
Starting a business involves more than a good idea. You need to conduct market research to see if there’s demand for your product or service. This involves defining and understanding your target audience, the group of people most likely to buy your product, who will be the focus of your marketing and product development.
A popular way to find your target audience is to create buyer personas to identify their needs and preferences.
Market research can be conducted through surveys, focus groups, and interviews. A broader market analysis includes industry-wide insights from reports and other sources.
Understanding market trends involves studying your industry, competitors, and customer preferences. It’s about identifying long-term trends, search volume for your product, emerging buyer trends, and potential market-impacting factors. Analyzing your competition helps you stand out and define your unique selling proposition, what sets your product apart from others.
You’ll also want to estimate market size: your total addressable market and your expected market penetration rate.
Watch this video on how to conduct a competitive analysis to take a structured approach to market research.
Get serious with your market research by using these popular analysis formats:
Why this studio says “Don’t worry about the competition”
Compound Studios’ Shane Vitaly says he ignores competition when conducting market research. For his multiple distinct brands, emerging trends are the key to defining an engaged audience.
Once you’ve validated your business idea, the next step is to decide how to source your products. Depending on your business, you might make your own goods, collaborate with a producer, or buy from a wholesaler.
For making handmade items, set up a workspace at home or rent a studio. Check the legal requirements for home-based businesses, especially if you’re making food or cosmetics.
If creating products isn’t possible or appropriate, consider partnering with a print-on-demand service. They’ll handle production and shipping. As you grow, you can work with a private label manufacturer to create unique branded products.
For products made in a third-party facility, you’ll need to find a manufacturing partner. The right manufacturer will understand your industry and be a partner to your business.
Reseller businesses source products from private sellers, while retailers work with inventory suppliers, often via wholesale marketplaces. Alternatively, you can use a dropshipping model, where your supplier sends products directly to customers.
For more advice on finding and working with a manufacturer, watch this video:
Here are three regularly updated lists of product suppliers you can work with:
She quit her Wall Street job to make lipstick
Melissa Butler started The Lip Bar by whipping up color formulations in her kitchen. The specific requirements of the cosmetics industry prompted her to work with a skilled manufacturer as the brand grew.
With your business idea validated and product sourcing underway it’s time to map out your strategy by creating a business plan. This document serves as a roadmap for structuring, running, and growing your business. It’s a tool you’ll use to convince others that investing in or working with your business is a wise decision.
Your business plan includes everything from your mission statement, which defines your business’s purpose and values, to your financial projections, which outline your expected income, expenses, and profitability.
One key aspect of your business plan is your sales strategy. Will you sell online, in person, or both? Online sales could be through your own website, marketplaces like Amazon and Etsy, social media, or a combination of all.
Using Shopify, you can streamline your online sales by connecting your store to marketplaces.
Another important part of your plan is your business model. As part of your model, you’ll specify whether your business will sell directly to consumers or to other businesses (B2B).
Follow these five tips to help you write a compelling business plan:
Finally, it can be helpful to look at other business plan examples for inspiration and to understand what a successful business plan looks like.
This video walks you through how to write a business plan:
It’s important to understand the nuances of an industry before writing a business plan. Below, find tailored advice for popular industries:
Choosing a business name is a key step. The name you select should reflect your brand and resonate with your audience. Expert tips for naming a business include keeping the name short and memorable, and not so specific that it restricts your business from growing or evolving.
As you choose your name, also select a domain name. A domain is the address customers will type into a web browser to visit your website or online store. Ideally, your domain should match your business name for consistency.
Before finalizing, ensure your chosen business name isn’t already in use and that the social media handles and domain are available. Once decided, secure it by setting up social profiles and registering the domain.
If you’re stuck coming up with a name to represent your brand, try using a free business name generator.
This video teaches you a simple framework for creating a lasting brand name for your business:
Dive into more business naming resources:
How Headphones.com Secured a Priceless Domain
Andrew Lissimore started his headphone business after seeing the impressive profit margins in consumer electronics. He negotiated a deal to secure a domain name that would help his business get discovered.
Selecting a business structure determines the foundation of your business. Your choice influences everything from operations and taxes to personal liability.
What structure is best depends on your business model, industry, funding sources, number of employees, and number of founding members. The simplest business structure is a sole proprietorship, in which you and the business are one and the same entity. While this means you receive all profits, it also means you’re personally responsible for debts and liabilities.
If your business needs more protection, you might consider forming a limited liability company (LLC). LLCs combine elements of a sole proprietorship with those of a corporation, offering you protection from personal liability.
No matter your choice, it’s important to clearly define ownership details, especially if you have a business partner. This includes roles, responsibilities, and ownership stakes. As your business evolves, so can your business structure.
Learn more about the main business types:
An 84-year-old grandma turned her cooking skills into a business
Nonna Nerina launched her virtual cooking experience when the pandemic all but ended tourism in her Italian village. Her granddaughter shares how Nonna runs a successful business selling a service online.
Even the smallest businesses require funding. While federal grants are unlikely to be available, you can use personal funds, find investors, or take out a business loan to launch your venture.
The Small Business Association also offers funding for specific groups like women, minorities, veterans, and rural businesses.
The cost to start a business varies, with many low-cost businesses able to launch on a budget of hundreds of dollars. Whatever the starting costs, most first-year expenses are reinvested into the business.
For most businesses, the largest costs will be tied to product sourcing and development. However, remember to account for all costs, no matter how trivial, including unexpected ones like insurance and taxes.
A break-even analysis is the process of determining at what point your business becomes profitable. It’s a financial calculation used to determine the number of products you need to sell to cover your costs. Knowing this information will help you price your products to ensure a profit margin.
Typically, you can expect a lower profit margin if you’re selling a high volume of goods, and a higher margin if you sell luxury products.
Knowing how to price your products can be difficult, but with a few basic calculations, you can confidently set prices that make sense. As you’re setting your prices, consider common pricing strategies like competitive pricing, value-based pricing, or keystone pricing.
Setting up a business bank account keeps your personal finances separate. When choosing a bank, consider its reputation, fee structure, and how friendly it is to small businesses.
Managing your finances involves understanding financial statements. Balance sheets list your assets, liabilities, and equity. Income statements show your earnings. Cash flow statements summarize cash transactions.
Managing cash flow is essential to the financial health of your new business. Using a small business accounting tool can help you keep on top of money flowing in and out. Professional accountants can also offer valuable advice.
Being ready for tax time involves managing your finances throughout the year. Understand tax deadlines and the types of taxes your business is liable for. Remember, many purchases like shipping and website fees can be offset as tax deductions.
Lastly, whether you should charge sales tax depends on several factors, including your business’s location. If you need to charge sales tax, you’ll need to get a sales tax permit and to set up tax collection in your store checkout.
For more information on cash flow management, watch this video:
Get your funding in order with these resources:
These founders turned $900 into an 8-figure brand
Skin care brand Bushbalm launched with a mere $900 investment from its three founders. They then funded their massive growth through crowdfunding and pitching investors.
Depending on where you do business, and your business structure, you may have a legal requirement to register your business with local and national governments. Check with your local authority to see what you need to do.
In some cases, you may not need to officially register your business. For example, sole proprietorships operating under the owner’s name, making under a certain threshold in revenue, aren’t required to officially register in many locations.
Business registration helps protect yourself and employees in the event of unexpected hardship and lets you obtain corporate services such as business insurance.
Depending on the business structure, you may be subject to personal liability in legal matters related to your business. Before you purchase an insurance policy, talk to a professional to see if personal liability protection is necessary.
Other types of business registration include registering a trademark or filing for a patent to legally protect intellectual property like an invention or your business name. You may need to register with the IRS or your country’s tax body to collect and pay taxes.
Depending on the type of products and services you sell, you may also have a legal requirement to apply for a business license or permit.
In the US, licensing requirements vary by state and industry. If you do need a business license, be sure you have essential details like a business name, address, and employer identification number before starting your application.
Registering your business makes it easier to secure trademarks, insurance, and other business essentials.
How a vegan chef built a business on YouTube
Wil Yeung dabbled in everything from dropshipping violins to developing his own consumer goods. The serial entrepreneur and self-taught chef built his latest business with a YouTube content strategy. He now sells his recipes as books, ebooks, and online courses.
Creating a brand is essential to attract and retain customers when competing against other businesses with similar offerings. Your brand is not just a name or logo. It tells the story of your business and ensures all products, content, and communications are associated with you.
To build a brand, start by defining who you are, what you sell, and the mission you set out in your business plan. Think about how you want customers to feel when they interact with your website or services. These insights will guide your brand strategy and help shape the tone and language that constitutes your brand voice.
Develop a style guide to keep your brand voice and visuals consistent. Your guide should contain specifications for your logo, fonts, and color scheme. Even without design skills, you can create a simple logo using a free online logo generator.
Product images and videos are crucial brand components for ecommerce businesses. Use clear, high-resolution photos to show the details of your products and lifestyle photos to inspire customers. If you’re on a budget, you can take photos with a smartphone and basic lighting. Stock photos are also a good temporary solution.
Ensure your visual identity is consistent across all touchpoints, from your website to product packaging. A seamless experience reinforces your brand and builds customer loyalty.
Watch this video for an introduction to business branding:
Use these resources to infuse your brand into your business’s images, copy, and packaging materials:
This skin care founder blended her personal story with her brand
In this guide to brand storytelling, founder Charlotte Cho explains how her personal story and that of her culture were critical to building two skin care brands.
When branding is set, launch your business website. If your business will sell products or services online, use an ecommerce website builder that will let you add selling features to your site.
With Shopify, you can build a complete online store including product pages and a checkout. You can add extra features relevant to your business by downloading apps from the Shopify App Store for tasks like customer support, product management, bookings, and returns (including many free apps).
When you use an ecommerce platform, designing your site is straightforward thanks to drag-and-drop tools and predesigned store themes. Simply choose a suitable theme, then customize it with your brand’s fonts and colors.
Arrange your homepage, and upload your product images to product pages. Add content to your About Us page. You’re now ready for a soft launch to test your site, gather feedback, and make tweaks before the grand opening.
Get inspired with these standout online stores created with Shopify:
Find more website creation help in these resources:
Build an online store now
Create your store in minutes with Shopify’s drag-and-drop editor. Choose from mobile-ready themes designed for your industry and add extra features with apps.
Marketing is reported as one of the most challenging aspects of running your own business—but it’s also the area where you will spend much of your time and budget. A solid marketing strategy is essential to drive traffic to your store or website and convert visitors into buyers. Your business plan should include a marketing plan outlining your strategy for reaching your target audience.
For more, see these marketing plan examples.
Explore different marketing tactics to find the best way to reach your customers:
Social media features like Instagram Shopping and TikTok Shop enable businesses to create in-platform storefronts to sell directly to users.
Ensure your marketing efforts include strong calls to action, whether directing customers to shop directly or visit your website. Use tools like Google Analytics to track performance and refine your strategy. Understanding ecommerce metrics will help you optimize your marketing spend and focus on what works.
Learn more about how to market your business to consumers:
TikTok’s plant mom turned viral videos into a brand
Get inspired by Sonja Detrinidad, a mortgage professional turned influencer who monetized her audience to start her business, Partly Sunny Projects. She buys wholesale plants in her native California and ships them across the US.
🚀 Make sure you’ve completed all the tasks required for launch by following this key performance indicators to see how you’re tracking toward your goals.
Gather customer feedback through surveys or analysis of support tickets. Conduct regular business reviews to evaluate financial health and market position. These steps will give you the confidence and clarity needed to make larger investments.
If you’re looking to grow, consider additional funding options. Update your business plan with your vision for growth, gather financial statements, and refine your elevator pitch. A business mentor can be invaluable in preparing your pitch by offering advice and feedback.
Explore funding sources like small business loans from banks or credit unions, grants from organizations, and crowdfunding campaigns to raise money from the public.
Community is an increasingly important factor in businesses’ success, especially for those in niche markets. Whether you’re serving breast cancer survivors, Indigenous communities, or any niche group, engage authentically: listen, reply, and ask for feedback as you grow.
Effective community management involves monitoring conversations, engaging with customers, moderating discussions, and measuring brand perception.
As you grow, focus on what tasks require your involvement, and which can be delegated to others. However, only hire employees when there’s a clear need for a human solution that can’t be automated or addressed in another way.
For instance, use apps to automate processes like customer support communication and financial reporting. For additional support, consider outsourcing one-off tasks to freelancers and virtual assistants.
As you grow, consider introducing your business to comparable target markets in international markets. If you plan to ship internationally, ensure compliance with destination country laws and customs paperwork.
Consider making duties and taxes transparent at checkout to avoid surprises for your customers.
Community is central to this marshmallow brand’s growth
When the founders of XO Marshmallow moved their business from farmers markets to their online store, they brought their in-person touch with them. Their robust social communities help them gain valuable feedback and win new business through positive word of mouth
From first-time sellers to global retailers, Shopify works for everyone. See plans and pricing.
To start a business with no money, consider low-investment options like a dropshipping store or a print-on-demand business. These business models allow you to start a business for minimal costs and fund growth through bootstrapping. You can also explore small business loans or crowdfunding campaigns. Leverage your existing skills and use free tools to get started.
Once you have a business idea, you’re already on your way. Here are steps to turn the idea into a business:
Funding can help you grow your business. Consider these funding options:
There’s no perfect time to start a business. Begin when you have the time, attention, and funds to commit. Starting while still employed allows you to test your idea with less risk before transitioning to full-time entrepreneurship.
To start a business, you’ll need:
To choose the right business structure, consider the following:
The best way to start a business is to take the leap. Many businesses can be started with little experience and a low budget. Success often comes from matching the right product with the right customer at the right time. Founders who understand their market and build a compelling brand tend to succeed. Define what “success” means to you and align your business plan with that goal. After launching, you can refine your approach based on customer feedback and market trends.
Additional research by Wesley Ng and Leah Mennies
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