6 things you must do BEFORE launching your business (set yourself up for success from the start!)
When starting in business, there are a plethora of behind-the-scenes details being worked out before any money is even made.
Interestingly, in a recent masterclass I taught, a common theme arose among students – they all had designed their business branding even though they hadn’t taken any of the other steps of setting up their business.
This intrigued me because, yes, you do want some customized branding to make your business stand out from the crowd… but deciding on colors and fonts doesn’t get you any closer to making money in your business (or having an official, legal business).
The quicker you get the behind-the-scenes business set up taken care of, the quicker you can make money. Today I want to share with you the 6 practical steps you need to take to start your business legally.
#1 – Register your business name
If you’re doing business in your own name, then technically you don’t need to officially register it with your state (you’d be considered a sole proprietor). However, if you’re conducting business under any other name (even if it’s “[your name] incorporated”), then you need to officially register to legally do business.
The good news is that this is a simple and painless process, and it normally doesn’t break the bank…
All you need to do is google, “How to register business name in [state you live].” In the results that come up, look for your state’s government website (typically the Secretary of State) for the most accurate advice on registering your business. The registration form ranges from $50-100 in most states, though states like California charge a bit more. Just follow the steps it guides you through!
#2 – Register your business with the IRS
This step is optional, but it’s quick and easy and worth the time.
If you want to open a business bank account (it’s a good idea to separate personal and business finances), you’ll need an employer identification number (EIN), and you can only get that by registering your business with the IRS.
An EIN is essentially a social security number for your business. The reason it matters is because you could have the same business name as others in the nation, so the EIN is a way to identify your specific business with a unique number, just as you are identified by your social security number.
No matter what state you live in, you register the same way, it doesn’t cost a thing, and you get your number instantaneously.
#3 – Open a business bank account
Again, just like an EIN, you don’t technically need a business bank account to start a business, but it is recommended.
Separate bank accounts for your personal and business finances will help you be able to keep accurate records and stay organized. When tax time rolls around, if you’ve mixed personal and business finances together, it’s much more difficult to see the breakdown of your profit and loss within your business.
When you have a business bank account, you can run all your business transactions through your business account, which streamlines your processes (especially at tax time). And it also helps you to see the ebbs and flows of your business and what kind of profit you are making at any given time.
If you need to move some personal money into your business account to fund your business, this is acceptable, and I recommend doing this in larger chunks because it’s easier to tell what that transfer of money was for.
#4 – Set up business email account
For all you non-techies out there, setting up a business email account is actually super easy!
You have two options for an email:
- Create a free email account on google with – [businessname]@gmail.com
- Or make a more official email account with your business’ domain name – [hello/support/first name/etc]@businessname.com
If you choose to go the route of creating a more official email account with your business name as the domain, the easiest way to do this is through Google Workspace if you don’t already have a website. If you do have a website set up, then you can also create your business email through your website’s hosting platform.
Either way, it’s a simple process.
Just like a business bank account separates personal and business finances and keeps things nice and organized, a business email does the same thing. When emailing a potential client or customer, you will appear more professional with a business email, and it will make them trust you more and be more likely to want to work with you.
#5 – Validating your idea
This fifth step is a bit more complicated than the first four, as it will take you at least a few days to complete.
Validating the waters is testing your business idea through market research. What’s market research, you ask? Well, it’s just having friendly conversation with some people who may be interested in what you’re doing so you can find out if they’re actually interested in a product to solve a particular problem they are dealing with.
And it’s good to do this upfront work before creating your product…
So you don’t waste any time on something people may NOT want…
AND so you create your product with an irresistible offer the people DO want!
A friend of mine did some market research recently (I’m not even sure she knew that’s what she was doing), and she so smooth and friendly – not salesy and weird.
All she did was send out a text to me and several of her other friends who she thought may be interested in the business proposition she’s been working on.
She described what the business was and asked us if it would be something we’d have any interest in. Then she asked us simply, “Why or why not?”
She wasn’t trying to sell us on her idea. She genuinely wanted our feedback because she wanted to know if she should even proceed with her idea.
Well… a bunch of us WERE interested and thought the idea sounded valuable. We even took it a step further and asked how to sign up! (her product isn’t even officially a thing yet).
THAT is the power of reaching out and asking for feedback (doing market research)!
It’s not about trying to get someone to buy what you want to create. It’s about starting a conversation, learning about your target customers’ wants and needs, and getting feedback on your idea that is trying to solve a legitimate problem.
You may hear crickets…
They may ask you a thousand questions…
Or you may hear an eager “YES!” straight away…
However, any of these three things is GOOD because you are testing the waters to decide if you’ll move forward with your business idea, if you need to tweak it in any way, or if you need to scrap it altogether and start with a fresh idea.
You’ve saved yourself hundreds of meaningless work hours in these few days of talking with prospective customers!
#6 – Create a simple marketing plan
When I say simple, that’s exactly what I mean… simple.
Your marketing plan should answer three main questions:
- What are you selling?
- How will people discover you?
- How will you turn those leads into paying customers?
Here’s an example:
- My friend’s idea that I mentioned in step #5 is a personal shopping experience (this is the product she’s selling).
- I’m not sure if she knows exactly how people will discover her yet, but right now she is utilizing her current network, which is amazing! (this is how people will discover her)
- Her plan to turn leads into customers is to tell her current network about her service and ask them if it’s something they might be interested in, answer their questions, and show them how to sign up (this is how she will turn leads into paying customers)
Here’s another example (for an online digital course):
- What are you selling? Clarify what you are teaching inside the course.
- How are you going to get leads? Will you do this through your current network much like my friend? Will you utilize YouTube, podcasting, or blogging for longform content? Are you into social media and want to use Instagram, Tik Tok, or LinkedIn?
- How will you turn your leads into customers? What will be your lead capture process? Will it be a form on your website, a sales email sequence, or something different?
All you need is ONE good way to attract leads in order to turn them into paying customers. When you’re just starting out, keep it simple (there’s plenty of time to expand later on).
(Bonus) – design your branding & website
Remember at the beginning when I said most of the students in my masterclass had already done their branding but hadn’t done steps 1-6 that we talked about today?
I recommend doing steps 1-6 first then branding can come into play. Once your idea is tested, then you can more easily work with that idea in mind when creating the fun assets!
The thing is, branding will not make you money. But, you do need to create assets at some point that will help you to create your website and have some consistency in fonts, colors, and graphics in your materials (website, course curriculum, email header, etc).
Do you need a website for your business? This could be optional depending on what you’re doing. If your marketing plan is to use content marketing (i.e. blog articles), then you will need a website to host your articles or videos.
If you are a service provider or selling on Amazon or Etsy or similar platforms, you may not need one before you launch. However, you may consider creating one later on as you grow and scale your business.
There you have it. Six steps to set your business up right (and legally).
It’s tempting to skip these steps, but they make a big difference for getting started well. Testing the waters matters to determine if you’ll make money with your business idea. The only one that takes more than a half hour is testing the waters.
Knock these things out in a weekend, and you’ll feel that much more confident as you get going!
If you want some help getting started, register for my free Small Business 101 training!