Running your own business is one of the most fulfilling and rewarding things you can do. But to build and run a successful business, you will first need to plan your business — and that’s not always as simple as you might think.
Planning your business well in advance will be crucial to its success in the long run. You’ll need to create and fine-tune your business plan, assess your finances, complete all the requisite legal paperwork, pick your partners, choose the best tools and systems to help you get your marketing and sales off the ground, and a whole lot more.
But where do you begin?
At ZenBusiness, we bring the “zen” to the uncertainty and complexity that comes along with planning, starting, running, and growing a business. If you’re dreaming of starting a business, you’re in the right place. Our experts can help guide you through what can be a notoriously complicated process.
Check out our guide below to learn more about how to successfully plan your small business and what ZenBusiness can do to help.
Steps for Planning Your Small Business
Creating a new business can be exciting, and you may be tempted to just dive right in. But before doing so, it’s crucial to first take a step back and plan everything out in detail.
If you’re thinking about starting a small business, you may be wondering where to begin. Here are some key steps to keep in mind as you begin planning your small business.
1. Conduct market research
Market research is an important but often overlooked part of planning a small business. So what exactly is market research?
Market research is essentially a way to gain a better understanding of the market as it pertains to your idea and gauge whether the business idea you have in mind is worth pursuing. In conducting your market research, you may want to consider factors such as:
- Whether and to what extent there is demand for your potential service or product;
- What types of consumers you anticipate will be interested in your service or product;
- Where your ideal potential customers are located geographically;
- Whether there are any existing competitors; and
- What price potential customers will pay for your goods or services and whether that will enable you to keep your business up and running.
Of course, this isn’t an exhaustive list, and there may be many other factors to take into account as you begin your market research.
Common methods of obtaining valuable market research data include:
- Research studies
- Focus groups
- Strengths, weakness, opportunities, and threats (SWOT) analysis
Sometimes, based on your market research, you might run into obstacles. For example, you may determine that demand for the business you had in mind just isn’t there. But don’t be too discouraged — this is just part of the process.
In fact, it’s far better to realize this early on through your market research, rather than figuring it out later after you’ve already gone through all of the steps of setting up your business.
Instead, you can use this opportunity to check other geographical areas that might be better suited for your business idea. Or you can consider pivoting entirely to a new business idea.
2. Write your business plan
You may think that having a general business plan in your head is sufficient. However, the act of putting pen to paper and actually writing down your business plan in detail is one of the most important things you can do as you begin your business venture.
There is no specific business plan template that you must use to plan a startup. However, most business plans will contain the following sections:
- Executive summary
- Company overview and description
- Goals and objectives
- Products and/or services
- Market opportunities
- Sales and marketing strategies
- Competitive analysis
- Organization and management of the company
- Financial analysis
Having your business plan written down is imperative to the success of your business. Not only is this good information for you as you plan your business, but you may also need to provide a business plan to potential lenders or investors as you attempt to secure financing and funding later on.
Keep in mind that each business will have its own distinct business plan. Thus, don’t be intimidated by sample business plans you may find online that are vastly different from yours. Just make sure to create a robust and accurate plan that’s right for your business.
Additionally, while it’s okay to be optimistic about your goals and desires, take caution not to be overly optimistic. Remember that the goal of your business plan is to have an accurate and realistic tool to help you understand your business goals and how you will accomplish them.
A business plan can provide you with an overall vision and concrete action items to pursue. So don’t try to plan your business without creating a solid business plan.
3. Calculate your startup costs
Next, make sure you have an accurate idea of the cost required to launch your business.
Inevitably, all businesses will require some amount of money to get started. This might feel overwhelming when you don’t have any income from your business quite yet. But by calculating your startup costs well in advance, you can reduce some of the stress and begin finding ways to secure the funding you’ll need to cover your initial costs.
Examples of expenses you may want to take into consideration in calculating your startup costs include:
- Entity registration fees
- Legal expenses
- Office space rental
- Website design and development
- Marketing and advertising
- Equipment and supplies
- Employee salaries
Depending on the type of business you plan to start, whether that business will be web-based or brick and mortar, and a variety of other factors, you may have more or fewer expenses to consider than the ones listed above. Nevertheless, try to take into account any and all costs that may be necessary to start your business. Generally, it’s better to overestimate at the outset than to underestimate and have to come up with additional funding down the line to cover expenses that you hadn’t thought of before.
4. Fund your business
Once you know how much funding you will need to start your business, then it’s time to actually secure that funding.
Below are some types of funding options you may consider for your small business:
Each one will have its own pros and cons. For example, not all new business owners will have the capital on hand to fully self-fund their business.
Instead, you might try to secure funding from one or more investors. This can be a great way to secure large amounts of capital for your business. And sometimes, your investor may also provide mentorship as you start your business. However, many investors will require an ownership share and/or active role in the company in exchange for their investment.
Alternatively, you might seek a loan to fund your business. In fact, there are many resources for small businesses out there to help them secure small business loans as they get started. And while a loan must be paid back over time with interest, a loan also allows you to retain full ownership and control of your business.
It’s important to go with the type of funding that works best for your business. Sometimes, it might be best to use a combination of these options.
5. Choose an entity that is best suited for your business needs and goals
Next, it’s time to select the type of business entity you want to form. There are a number of options to choose from, and the entity you select will inform many of your business decisions moving forward.
The most common types of entities to consider for your small business include:
- Sole proprietorship
- General partnership
- Limited liability company (LLC)
- Professional limited liability company (PLLC)
- Corporation (C corporation or S corporation)
The type of entity you choose will depend on the precise needs and goals of your business.
Each entity will have differences when it comes to things like tax treatment, personal liability, and organizational structure. Thus, make sure you have a basic understanding of each entity type before you select one for your business.
While it may seem premature to think about what type of business entity you want to form, it’s never too early to do so. It can be difficult to change entity types after you’ve already formed your business, so try to select one that’s right for you at the outset, rather than simply selecting the one that might be “easiest” or “cheapest” to form.
6. Buy an existing business or franchise
Another option to consider as you plan your business is buying an existing business or franchise. There is no doubt that it can take a lot of legwork to plan a startup from scratch. Franchising or buying a business that already exists can simplify the initial planning process.
Of course, it can still be a challenge to own and operate a franchise or business that you have purchased from someone else. However, much of the planning may already be accomplished, allowing you to take the reins and get started more quickly and efficiently.
Ready to get started on your small business?
ZenBusiness can help you take your business idea and turn it into a reality.
By using our products and services, you can more easily navigate the business planning and startup process. Some of our top features include:
- Registered agent service
- Annual report filing
- Operating Agreement templates
- Employer ID number (EIN) application
- Worry Free Compliance service
You can purchase annual plans from ZenBusiness that include all the services you need to better protect and grow your business throughout the entire year.
It can take a lot of time and effort to plan your business. But the experts at ZenBusiness can help you take what can be a daunting process and make it simpler and more manageable. If you’re dreaming of starting a business, don’t wait any longer — let ZenBusiness help you turn that dream into a reality today.
Planning Your Business FAQs
How do I create a small business idea?
A small business idea can come from a variety of places — sometimes even when you’re least expecting it. Often, the best ideas will come from looking internally and planning a business that you can center around your own skills or passions. Other times, great business ideas will come from looking at the market data and trends. You might consider starting a business that has a large demand but that doesn’t currently exist in your area.
How do I create a startup plan?
There is no one single way to create your startup plan. What’s important is that you make one. You want your business startup plan to cover everything from your structure to funding and everything in between. It’s also important to describe any goals for your startup and how you plan to accomplish those goals.
What is the easiest business to plan?
In truth, there is no such thing as an “easy” business to plan. Creating any type of business will take a lot of hard work, detailed planning, and determination. At ZenBusiness, we provide fast, low-cost, and personalized services to help you plan, start, and grow your business. No matter what type of business you plan to create, ZenBusiness can make the process easier, quicker, and worry free.
What are the most common types of small businesses?
Restaurants, auto repair shops, website design services, and bookstores are just a few examples of “common” types of small businesses that exist. But in this day and age, small businesses span a broad range of industries, locations, and clientele. With the right planning and support, you too can create a successful business. If you have a great idea for a small business, take a look at our product and service plans and see how we can help you take the plunge and get started.