It typically takes a startup business around six months to a year to launch its product and services and land its first paying customers. But as you already know- there's no set formula for timing the complex process of becoming a business owner. For example, registering your business and getting to work can take minutes. But to get it ready for success, you'll also have to consider the type of business, location, and complexity. According to financial experts, the average launch time by industry goes as follows:
Service businesses: 3-5 months
Online companies: 30 days
Retail stores, restaurants, and clothing stores: One year or more.
Manufacturing products: Up to a year.
Nevertheless, there are a series of standard steps that you could start taking before your official launch day. We've compiled nine easy steps to help you create your business on the right foot. The clock is ticking, but no need to feel threatened, time in your side.
Nine steps to starting your own small business
We've broken down the process of starting a small business into nine steps, from planning and financing to opening day. Depending on your circumstances, you may need to perform these steps in a different order than those listed below.
1. Validate your idea through market research
Many entrepreneurs go through paralysis by analysis, trying to generate an innovative solution that will turn them into the new Zuckerberg or Elon Musk. But the truth is that it's not about building something new; it's about bringing the best solution to your customers.
How do you validate that your business will solve a current or trending market need? Through market research, use primary and secondary research to gather valuable data to validate your idea. Send surveys to potential customers, look at existing sources of information, like census data or demographics, and get some insight into growing consumer trends. The worldwide web is filled with goodies at your fingertips. Below are some of the best market research tools for startups and small businesses:
Official Statistics: You can consult the GSA website, U.S. Commercial Service Market Intelligence or the U.S. Department of Commerce Top Markets Reports.
Private reports about your industry: The best private research companies to get recent reports and updates on industry trends are Statista Garter, Nielsen, McKinsey & Company, and Dun & Bradstreet. Most of them have a free and paid version depending on the amount of insight you want.
Consumer trends and behaviors: Through Think with Google, you can use tools such as Google Trends, a market finder, shopping insights in your, and the consumer barometer.
Customer surveys: Send potential customers relevant questions that will help you understand how you can suffice their needs. Try SurveyMonkey, Ask Your Target Market (AYTM), or Survey Pal. Some more traditional methods are TypeForm or Google Forms.
Social Media Statistics: Facebook Audience Insights lets you create an audience persona and get consumer insights based on the persona created. You can also try social listening tools like Sprout Social, BuzzSumo, or Hootsuite.
Find a list of great questions to start your market research at: 6 ways to kickstart your business this 2022
The average time it should take you to conduct market research is two weeks.
2. Write up your lean startup business plan
Once you’ve gathered relevant industry trends and competition information, it’s time to draft your business plan. This will be your route map for structuring, operating, and growing your new business. It can also help you generate trust with new founders and investors or generate a new alliance with a business partner. If you’re feeling too overwhelmed and don’t know where to start, we suggest you opt for a Lean Startup Business Plan. This short, concise plan will help you gather all your ideas about your business. Some steps to create a lean startup business plan are the following:
Write the problem and the solution your business will provide to future customers.
List your Key Performance Indicators (KPIs). It could be the creation of a new website or the result of a more detailed budget.
Come up with a unique value proposition to define what your business brings to the market and industry.
Mention your resources, from human capital to funding, marketing resources, and partnerships.
Specify your target buyer persona and customer segments and channels.
Create a cost structure describing all the costs, fixed and variable; your business will incur.
Evaluate your revenue streams and make sure you have the cash flow to guarantee your business success.
Test, review, and revise. Time to put it into action!
The average time it should take to write a lean-up startup plan is less than three days.
3. Choose the best location for your company
You'll be able to start immediately after your market research and business plan if your business is only based online. But if you need a location, calculate around four months or more to find to lease. Below you'll find the best resources to find a physical location for your business:
Your local Small Business Development Center for guidance.
Your local Chamber of Commerce
Commercial real estate agencies
Listings for business properties: LoopNet, Cityfeet, and Showcase
4. Pick your business name
Picking a consistent and relevant name to personify your business, services, and products can come intuitively or take some time. If you’re confused about the best option for your business, you can include a survey of potential customers in your market research.
Keep it consistent once you have your name and incorporate it into your domain, sign, and other components. Ensure that nobody in your state has registered or that it doesn’t infringe with another trademark. If you want to register your brand or product name, you can do it through the U.S. Patent and Trademark Office (USPTO).
The average time it should take you to pick a business name: is less than five days.
5. Choose your business structure and register your entity
Registering your new business can seem like a confusing legal step, but it doesn’t have to if you already have your location and the best business structure for your business. If you have a partnership or a sole proprietorship, it’s just as easy as registering your business name in your state. If you opt for an LLC or a Corporation, then you’ll need:
To pay a fee.
The name of your business
Location of your entity.
Property, administrative structure, and name of directors.
Information about your registered agent.
Amount and value of your actions (if it’s a corporation).
These are general requirements, but they vary depending on your state and business structure.
If you still have doubts about the best business structure, read our guide: The difference between incorporating and registering a business.
The average time it should take you to register your business: You can do it online in less than 24 hours, but we suggest talking to a legal expert if you want to opt for an LLC or Corporation.
6. Get your state tax ID
No matter what type of business structure, all businesses need to apply for an Employer Identification Number (EIN) (unless you are a sole proprietorship with no employees). The good news, this can take you less than an hour. All you have to do is fill out an application at the Internal Revenue Service website.
The average time it should take to get an EIN: If you do it online, you can get it immediately Monday-Friday from 7 am-10 pm EST.
7. Apply for licenses and permits for your small business
The requirements to legally operate your business depend on your industry and jurisdiction. You might need several or a few local, state, and federal licenses to get to work. Check the official licenses and permits page to see what support you’ll need to operate before you decide to launch.
The average time it should take to get licenses and permits approved: Several weeks to a month, depending on whether you must get a variance for a home business or wait for an inspector for permits.
8. Open a business bank account
Many business owners wait until they generate constant cash flow to open a business account. But you should prioritize keeping your business and personal finances separate if you want to establish a solid ground to grow. This is the best way to protect your funds in case of a lawsuit, avoid tax issues, and have better chances of getting funding for your business.
The average time to open a business bank account: Applying shouldn’t take more than two to three business days if you have all your paperwork in order. Many banks will allow you to open your bank account online in less than 24 hours.
9. Get access to funding and grow your business
This step can take many months, especially if you’re starting. Banks and SBA government programs can have strict requirements and prefer consolidated businesses. At the same time, funding can be a significant barrier to turning that startup idea into a reality. Don’t worry. We’ve got a solution for that too, and it’ll only take you minutes to pre-qualify. Once approved, we will deposit the funds into your account in 72 hours.
We can connect you with one of our affiliate funders if you have more than three months in business and generate at least $7,500 in monthly revenue. We specialize in providing options designed to meet the needs of small businesses. We’re more concerned about your business’s potential than your credit score. So check if you pre-qualify in minutes and launch your business for success this 2022!
Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.