Starting a Business from Scratch (Step by Step)
Here are the exact steps you can take to start your business from scratch! Whether you already have a business idea or you are starting from absolute zero this article can get you started with getting your business off the ground!
If you’re new to Flip Academy, I’ve started many businesses in my life, some are making me multiple 6 figures, And there are certain steps that I’ve had to take on each one of them. So, I figured this information would be helpful and we can jump right into it. Make sure to share it to anyone else that is thinking of starting a business.
1. Brainstorm a Business Idea
This is obviously the first and most important step. Why? well because if your business idea has no potential then it will be a waste of your time and resources. I’ll go over this here shortly on how to vet your idea but and if you’re reading this and you already have an idea, hang in there, the next steps will speak to you.Â
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Some things to consider when you are thinking of a business idea is to think about your current skills and how you can leverage them to gain an advantage in the marketplace and separate yourself from the competitors.Â
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Look at current events and new trends that will create new market needs.
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Look at gaps in an existing market or how to solve a problem. Â
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Once you have your business idea then you need to run it through by the next step, which is a very important step, and that would be thoroughly vetting the Business idea you have, to see if it’s worth your time and effort.Â
Step number 2 is…
2. Analyze Your Idea
This is ultimately to make sure there is a demand for your business, or you would potentially be setting yourself up for failure. To make this simple to understand it’s like trying to start a hot coco business in an area that is hot all the time, or a snow cone business in Antarctica. These businesses are more likely to fail. So, to check your business ideaÂ
Here are some areas of you should look into:
- Startup capital needed for your business idea.
- Demand for your product or service
- Market changes (is it on the way out of business)Â
- Potential competition
Knowing how much money you’ll need to get your business started and how much demand is out there will be a determining factor for whether you advance to the next step. If your idea needs millions in start-up capital or doesn’t have much demand, then may need to consider going back to step 1 and think of another business idea.Â
On the flipside, if your business idea has healthy demand and you can bootstrap it yourself to get it up and running, then you can feel confident that you’re on the right track.Â
Sometimes, a quick way to check if there is demand is by spying on your competitors doing the same business that you are looking to start. Check out their websites, social media, their reviews and try to get a feel of how successful they are doing this.Â
If there is no existing product or service that you can compare it to, because you invented a new product or service, then take a survey and ask your potential customers if it is something they would buy.
Or run ads for the new product or service first to a lead magnet and see how many people are interested before spending the time to create it. Almost like reverse engineering into it.Â
Also, make sure your business isn’t in a dying industry. Once you’ve done a lot of research and are comfortable with your business idea, and confident that there is demand, and the capital needed to start is within your reach then you can move on to the next step, which is.
3. Create a Business Plan
After you’ve determined that your business idea has potential, the next step is to create a business plan. Which is a roadmap on how you plan to achieve your goals. Don’t stress to much on this and get caught up in overthinking and not executing. Millionaires execute on their ideas quickly.Â
Your plan should cover the basics:
- Defining business goals
- A detailed description of your products and services
- The data from your market research
- Your marketing plan or how you plan on getting in front of your customers.
Overall, this plan should draw a road map to the launch of your product or service, and on how you’ll scale your business. You’ll need to research how much inventory you’ll need, how much capital you’ll need, your sales strategies and your projections.Â
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I’m more of a fan of mind maps, Mind Maps are a visual representation of your plan. Mind Maps starts off as a central idea then literally branches off into different thoughts and images related to your plan.
Next step, you may have already thought of is you need to come up with a business name.
4. Pick a Business Name
Picking a business name is supposed to be the fun part about starting a business, but sometimes it can be the most difficult. Here are some helpful tips that might guide you to the right name, which can be tough to come up with.Â
I won’t spend a lot of time on this, because it’s totally up to you.Â
But think of a name anyone can spell or pronounce. Then do a simple internet search just to make sure no one else is using your business name in your industry, otherwise you might pick a name that’s already taken.Â
Check to see if you can get that name for your website and social media handles. If you see that they are available, I would go ahead and grab them before it gets taken. Â
Now that you have your business name, its time to decide on a business structure.Â
5. Legal Structure
A lot goes into structuring your business. The first step is to decide on how involved you’ll be in your overall business, not just the day-to-day operations.Â
Are you going to fully control the business? Partner up with someone, raise capital and sell shares? Answering these questions will determine the legal structure of your business. For example, if you want to own your business outright then you’ll need to structure your business as a sole proprietorship, which is what most small businesses do.Â
Or, if you want a more flexible structure, you’d be better off applying for an LLC. And if you want to sell shares of your business and allow shareholders to own a part of your business, you’ll want to structure your business like a corporation. I would reach out to a legal professional who can help you choose what’s best for you.
Or you can use websites like legal zoom and pay them to do it for you. Might cost you a few hundred dollars.Â
Next, you’ll need to….
6. Create a EIN
EIN is an acronym for Employer Identification Number.Â
EINs are used by the IRS to identify your business, meaning you’ll need an EIN to file your businesses’ income taxes, your payroll taxes, and when applying for a business loan.Â
To apply for an EIN, you’ll need some basic information about your business and meet some basic requirements. There are two requirements, that come to mind, your business must be located in the U.S and you must have a valid taxpayer identification number, like a social security number. Once you complete the online application, you will get your EIN immediately. Â
If you’re eligible, the next step is to gather some information on your business, such as your primary reason for applying, the date you founded your business, the total number of employees during the next 12 months, if any at all. There are other requirements, so I’d recommend doing more research into the process. But its super easy and you can do it online for free.
Now that you have your EIN, you can open your business bank account.
7. Open a business bank account
After you’ve gotten the necessary documentation, it’s time to get a business bank account. Separating your personal finances from your business finances is important.
In case you’re unfamiliar, a business bank account is what it sounds like, a bank account for your business, more specifically, a checking account. The first thing you’ll need is the documentation you got earlier in the process. Like the EIN and your certification of formation from the Legal structure you created and go to your local bank, and they’ll open an account for you.Â
After you get your documentation together, you’ll have to decide what kind of accounts to open. There are three primary business accounts: a checking account, a savings account, and a merchant account.Â
I always do a checking account to start.
Easy enough, now the next step, is one everyone focuses on way too much and places this first on this list or treats it like highest priority. I put this step towards the end because none if this matters if you didn’t run it through the previous steps we mentioned.Â
But because you’re reading this, I’m sure YOU will and you can now work on your branding
8. Create your Branding (logos, colors, social media pages etc)
Branding is no doubt, necessary for your business. So, you’ll need to implement creative branding strategies to help spread the word. Here are some items to start on:
A logo
Website
Social media presence
Product design (if applicable)
When thinking about your logo and brand, make sure it aligns with the focus of your business and represents it well.Â
Fortunately, to turn this into a reality is pretty easy, my GO TO sites that I Like to use are:Â
When looking for a freelancer, you’ll want to use two primary criteria: ratings and samples. Most of these sites have ratings systems that show you what other hirers have to say about this particular professional. Samples, on the other hand, are more subjective.Â
Always look at a freelancer’s samples before you hire them. You can even ask for a demo or sample work if you’re still not sure whether or not they’re the right choice. Now that you have your logo and branding, Next you will need to…
9. Build a Great Product or Service
This step varies drastically based on your business. Whatever business you are looking to start, you will want to make sure that you spend a lot of time on the quality of the service or product that you are going to be selling.Â
If its something like flipping houses, then you would need to work on the quality of your flips and efficiencies.Â
The same principle applies to a service as well. Continue to fine tune your service and its process until your goal is achieved. The best way to know if your product is ready for launch is by testing it on potential customers.
The goal here to test over and over to ensure you are delivering an excellent product or service regardless of the industry you are in, simple enough.Â
This brings us to…
10. Launch
Launching a business is all about marketing because you need to start getting sales or leads coming in. So, whether its inbound or outbound, is up to you and what you think will be best for your customer base. This can be Google ads, social media marketing, direct mail, cold calling, however you plan on getting in front of your customers or clients.
Start taking action and let your customers know about your business.Â
If you’re marketing on social media, then creating a social media calendar is a great way to plan your campaign. The calendar is essentially a schedule that tells you what days to post what, making it really easy for you to market your business.Â
If you’re looking for motivated sellers, then you would be sending outbound direct mail to sellers looking to sell their home.Â
If you’re launching a clothing line, then you need to advertise on google and social media like Instagram, to showcase your product line and gather leads.Â
Consistency is very important here, In our businesses we don’t stop dripping and marketing to our customers. You want to keep that funnel full and continuous.Â
Just because you launched doesn’t mean you’re done, next we need to…
11. Continue to Refine, Tweak, and Create Efficiencies
As you continue to grow and build your business you will be able to identify inefficiencies and create solutions to streamline some of your business processes. Most improvements in efficiency are small tweaks. These changes can come in the form of increased productivity or the creation of better production methods.Â
In addition to production, you can also focus on making improvements in sectors like marketing and sales.Â
For example, you could dive into your data analytics to tweak your online ads so your potential customers see your ads more than people who aren’t interested in your product. These small changes can lead to big improvements, lower acquisition costs and higher quality leads, which can lead you towards growth as a business owner.
Finally… we have step number 12; this is something I focus heavily on in any business I have and its.
12. SOP’s - Document Processes and Scale
I can’t stress the importance of documenting your processes. Your process should be so well defined that someone who doesn’t know how to do said task, can jump in and get started.Â
Scaling often aligns with hiring and outsourcing, you will need to write down all the steps and processes so that your employees have all the tools to do their job effectively.Â
You’ll also want to prepare for growth. That means checking under the hood for things like cash flow, supply chain, or any weak areas to be found in your business. The most important thing you should check when scaling is your finances.Â
You should prepare your accounts for business loans. Odds are you won’t have enough cash to scale, so you’ll need to prepare your business to obtain loans for expansion.Â
