How to Start a Business – 5 Essential Steps Before the Launch
Last update: February 8th, 2021.
One of the most common questions aspiring entrepreneurs ask me is how to start a business. Unfortunately, many of them fail before launch, and with good reason. It is hard to know what to do when there is no experience, either too much or vague information, and virtually zero clear-pragmatic guidelines to assist. Here are five essential steps to perform before you launch your new business.
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1. Keep your day job
Consider yourself lucky. Do not underestimate the power of your current income. Use it in your favor and start setting aside 10% of your wage towards funding an eventual business account. Fight for a salary increase every time possible, and do not overspend it on anything rather than increasing your future business nest-egg.
The internet is chock full of excellent business ideas, services, and books. Learn to discern the good ones. Then, start spending a few minutes per day going through all these sites and books. In the process, I highly recommend reading the following book by Robert Kiyosaki: “Rich Dad’s Before You Quit Your Job: 10 Real-Life Lessons Every Entrepreneur Should Know About Building a Million-Dollar Business.”
If you haven’t, please consider reading the books suggested in our previous article: How to Achieve Financial Freedom, 3 Tips for Success.
It’s also a smart move to talk to other people who have tried different small businesses and what worked and did not. Listening to what successful people have to say can give you great insight into approaching your own goals and visions of good business ideas.
2. Learn how to invest
If you learn the art of using your own money at something risky and controlling your emotions while you are at it, then you’ll be set to jump into the business wagon. If you learn to master the mentality of seeing money as a vehicle for getting more on something (even if you lose it), only then will you be ready to jump into that wagon.
“I could lose this money, yes, but at least I could learn something from it,” should be the mentality. But, of course, this stage only comes with financial maturity, and like everything that has to do with this word, maturity only comes from mistakes, so be ready to lose something in the process, be patient, and humble.
I highly recommended at this stage reading the following book by Robert Kiyosaki: Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
By learning how to invest, you’ll master the art of identifying other businesses’ real value before investing in your own. Then, use just part of that 10% of the money we talked about from step 1 for this step’s purpose. Don’t be greedy.
3. Work on your business idea
At this point, you are somehow familiar with how it feels to lose something. So, start preparing your business idea based on the foundation of “I’ll do everything in my power to make it work, but it’s OK to adapt.”
Think day and night on every work break you have about a name for your business. You have done tons of research on the market, you know something is missing, and you aim to go for it.
“I got the name already!” Good! Now go to the Google Keyword Planner tool, it’s free, and you can see how competitive that niche is to make sure on any last final touches on that name. Got it? Now go to Google Domains and secure the prospective website URL! This domain will be your future gem and, if worked hard, an excellent priced asset to sell whether you decide to do so (investor mindset).
4. File your business name
Now, depending on what country you live in, this may vary, of course. But, generally speaking, I’d recommend doing the entire process online from a reputable source (use Google to validate it using its reviews). In the USA, where businesses are highly encouraged, there are three main places where one can quickly start wp-signup.phping a new business: Nolo, IncFile, and LegalZoom.
Each of these websites offers different packages. Depending on the package picked, the application process could last from 2 – 6 weeks to complete. Therefore, this step is considered crucial. Having your business name on file means no one in your home state is doing anything with that name and gives you the legal tools for moving on to the next task.
5. Open a business debit account
When handling money in and out of your business, it is recommended that you do so independently of your personal bank accounts. Not only to avoid confusion but because it is legally advisable if future disputes arise.
I know there are a lot of options out there (and expensive commercials too). Unless you have been lucky enough to have a venture capital firm investing in your business, you will likely prefer to keep the least expensive account to maintain and at the lowest possible fees. Meet Novo!
Novo is the most convenient online banking solution for small businesses. Its attractive “no hidden fees” policy, FDIC insurance, and no minimum balance requirements are sure to give your finances a boost! Novo will provide you with an account and routing number that will be used for your business finance needs and mail a VISA debit card to your business mailing address for free. Their mobile app is amazing, as is their website. So, if you were an Azlo customer and decide to do so, with a minimum deposit of $100 or more and using this link, your business and ours will generate $25 extra. Not much, but more than anything, right? So, be sure to spread the word once you’ve opened it and repeat it with your referral link, which you get right after your business account has been approved.
Now you have all the books and tools, start drawing your plan. It’s time to begin your search. There are plenty of small business opportunities available right now. Look at your local library branch or look online for more free information. With a little hard work and some persistence, you could finally launch the right business for yourself. Just remember to have fun and keep learning!
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