Starting a business

Your business idea is clearly inspired. Otherwise you wouldn’t have emailed it to yourself late last night. So what do you do now? We take a look at the next steps in starting a business.

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Start with a 1-page business plan

A short plan helps you lock in the idea, and iron out the rough bits. You can make it longer later.

Download Xero’s 1-page business plan template.

a woman plans how she will build her business
a woman considers the different characteristics of her customers to profile

Profile your customer

List key characteristics like:

• where they are

• what they care about

• how much they spend

This will help you refine your product and your marketing.

Check out the competition

Figure out who’s competing for the same customer and learn from them. Why have they succeeded? And how could you be better? List their:

Weaknesses
Why you can win. 

Strengths
Why winning will be hard.

a woman uses binoculars to scope out what competition there is in the market
a graph showing projected costs and income fluctuating over a year

Do your numbers

Plot your projected costs on a timeline. Do the same with projected income. You'll run at a loss when you first start a business. How will you make up the shortfall?

Research shows that most businesses do this through owner savings, bank loans, friends and family, or credit cards. Learn more in our guide to finance.

Most US businesses get their money from:

34% owner’s savings • 10% bank loans • 17% friends and family • 33% credit cards

 

Speak to a pro

Check your numbers with a bookkeeper, accountant, or a business mentor. They know how to start a business and will call out gaps in your thinking. 

Find an advisor
a woman seeks advice from a professional about her business
a woman fits a sign for her business ‘Sticks & Thrones’ on a wall

Register your business

Ask city, county, or state authorities if you need licenses or permits. Ask the state tax office about sales tax. Ask the IRS if you need a federal tax identification number.

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After starting a business

So now you know how to start a business, but what comes next? Lots of questions, that’s what. Keep your advisors and mentors close. And look for helpful articles in our small business guides.