Starting a Small Business in 2020

When you consider a few of the most popular reasons to start a company, including having a unique business idea, designing a career that has the flexibility to grow with you, working toward financial freedom, and investing in yourself -- it is no wonder that small businesses are everywhere.
But not every small company is positioned for success.

  In fact, only about two-thirds of businesses with employees survive at least two years, and about half survive five years.  So you may have a real challenge when you opt to take the plunge, ditch your day job, and become a business owner.

 The stage is often set at the start, so make sure you follow all the necessary steps when starting your business can set the foundation for success.

Here are 10 steps that are required to start a business successfully.  Take one step at a time, and you'll be on your way to successful small business ownership.


Most likely you have already identified a company idea, so now it's time to balance it with a little reality.  Does your idea have the potential to be successful?  You will have to run your business idea through a validation process prior to going any further.

In order for a small company to be successful, it must solve a problem, fulfill a need or provide something the market wants.
There are a variety of ways that you can determine this need, such as research, focus groups, and even trial and error.  As you explore the market, some of the questions you should answer include:

Is there a demand for your anticipated products/services?

Who wants it?
Are there any other companies offering similar products/services now?
What is the competition like?

How will your business fit into the market?

Do not forget to ask yourself a few questions, too, about starting a business before you take the plunge.

 Make a Plan

You need a plan so as to make your business idea a reality.  A business plan is a blueprint that will guide your business in the start-up phase through establishment and eventually business growth, and it's a must-have for all new businesses.

The good news is that there are several kinds of business plans for various kinds of businesses.
If you would like to seek financial support from an investor or financial institution, a traditional business plan is a necessity.

 This type of business plan is generally long and thorough and has a common set of segments that investors and banks look for when they are validating your idea.

If you don't anticipate seeking financial support, a straightforward one-page business plan can give you clarity about what you expect to achieve and how you plan to do it.

 In fact, you can also create a working business plan on the back of a napkin, and enhance it over time.  Some kind of plan in writing is always better than nothing.

Starting a small business does not have to require a whole lot of money, but it will involve some initial investment as well as the ability to pay ongoing expenses before you are turning a profit.

Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc.), as well as what you anticipate you will have to keep your business running for at least 12 months (rent, utilities, marketing, and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.).

Those amounts combined is the initial investment you'll need.
Now that you have a rough number in mind, there are a number of ways you can finance your small business, including:

• Financing
• Small business loans

Crowdfunding

You can also attempt to get your company off the ground by bootstrapping, using as little capital as necessary to start your company.  You may find that a combination of the paths listed above works best.  The goal here, though, is to work through the choices and create a plan for setting up the capital you want to get your company off the ground.

Your small business can be a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation.  The company entity you choose will impact many factors from your organization name, to your liability, to the way you file your taxes.

You may select an initial company structure and then reevaluate and change your structure as your business grows and needs change.

Depending on the complexity of your business, it may be worth investing in a consultation from an attorney or CPA to ensure you are making the right structure choice for your business.

Related : Crowdfunding guide

Select and Register Your Business Name

Your business name plays a role in almost every aspect of your business, so you want it to be a great one.  Make sure you consider all the potential implications as you explore your options and choose your business name.
As soon as you have chosen a name for your business, you will have to check if it is trademarked or currently being used.  Then, you'll have to register it.  A sole proprietor must register their company name with either their state or county clerk.  Corporations, LLCs, or limited partnerships typically register their business name when the formation paperwork is filed.
Don't forget to register your domain name as soon as you have selected your business name.  Try out these choices if your ideal domain name is taken.

Get Licenses and Permits

Paperwork is a part of the process when you start your own company.

There are a variety of small business licenses and permits that may apply to your situation, based on the type of business you are starting and where you are located.  You'll need to research what licenses and permits apply to your company during the start-up procedure.

Step 7: Pick Your Accounting System

Small companies run most effectively when there are systems in place.  One of the most important systems for a small company is an accounting system.

Your accounting system is necessary so as to create and manage your finances, set your rates and prices, conduct business with other people, and file your taxes.

  If you decide to get started on your own, make sure you consider these questions that are vital when choosing accounting software.

Step 8: Set Up Your Business Location

Setting up your place of business is important for the operation of your business, whether you will have a home office, a shared or private office space, or a retail location.

You'll have to think about your location, gear, and overall setup, and make sure your business location works for the type of business you will be doing.  You'll also need to take into account whether it makes more sense to buy or lease your commercial space.

If you'll be hiring employees, now's the time to start the process.  Make sure that you take the opportunity to outline the positions you need to fill, and the job responsibilities that are part of each position.  The Small Business Administration has an excellent guide to hiring your first employee that is useful for new small business owners.

If you are not hiring employees, but instead outsourcing work to independent contractors, now is the time to work with an attorney to get your independent contractor agreement in place and start your search.

Lastly, if you are a true solopreneur hitting the small business road alone, you may not need employees or contractors, but you'll still need your own support team.  This team can be comprised of a mentor, small business coach, or even your family, and serves as your go-to source for advice, motivation, and reassurance when the road gets bumpy.

Step 10: Promote Your Small Company 

Once your business is up and running, you need to start attracting clients and customers.  You'll want to start with the basics by writing a unique selling proposition (USP) and creating a marketing plan.  After that, explore as many small business marketing ideas as possible so that you can decide how to advertise your business most effectively.

As soon as you have completed these company start-up activities, you'll have all the most important bases covered.  Keep in mind that success doesn't happen overnight.  But use the plan you've created to consistently work on your company, and you'll increase your chances of success.