First, prepare to be popular. New business owners are a juicy target for thousands of vendors that provide services to new businesses. “Start a business” is one of the most competitive search terms that an advertiser can buy on Google. As soon as you give your contact information to any small business vendor, you will be bombarded with offers for services.
Do not be fooled. Vendors are clever and market their services in a way that will instill Fear, Uncertainty, and Doubt (yes, FUD). Be skeptical – many of them will take your money to perform services that you can do yourself, free of charge. (And then they will sell your name again, leading to even more offers).
When you search for “start a business” on the Internet, ignore all of the “Ad” postings at the top. You can be tricked, for example, into thinking you have clicked on an IRS website, when you have actually clicked on an ad for a company that will take your money to file with the IRS, when you could have done it for free. Skip the ads, and scroll down to read the articles written by government agencies (ending in .gov) or news organizations that you know to be legitimate. When you see a generic URL that seems sensible, like howtostartabusiness.com, that is rarely an unbiased article. It is typically a vendor trap called “advertorial” – an article written by a marketing agency, touting vendors who have paid to be featured in the article.
It is surprising how little you absolutely must do to start a business. At a minimum, you will need some kind of contact information (like a mobile phone number or email address) and a way to accept payment (like cash, PayPal, or Stripe). With that, you could begin offering your product or service and reporting your business income on your taxes. You may not even need a Federal Tax ID (EIN) number from the IRS, if you don’t have employees or meet other requirements.
However, for most businesses you will need to acquire an EIN and take quite a few more steps. As one of your very first steps, it is wise to develop a relationship with a local small business attorney – preferably, someone who has been referred to you by a successful business owner that you know and trust. Ask about the fee for the session in advance. The bill for a brief consultation may stun you, but it is prudent to get an expert opinion about what business structure you should choose (sole proprietorship, corporation, etc.) and whether there are local or state licensing or regulatory requirements that you need to meet for your business. An established small business attorney will also be able to provide trustworthy local contacts when you need an accountant, insurance agent, and other professional services.
New entrepreneurs tend to overvalue the glamorous aspects of business, such as choosing a business name, designing a logo, creating a business card, applying for trademarks, and coming up with a tag line (“Just Do It!”). These things are fun, as is building a beautiful website and/or retail location. However, very few entrepreneurs put in the time before they launch their business to understand how marketing works and to learn how to make financial projections. While there is some value in learning the hard way, you can accelerate your business by finding a mentor or other trusted source who can walk you through the process of creating a launch plan – including an advertising plan and financial plan – to improve your chances of success.