Step 1) Plan Your Business
The most important preliminary step in starting your new business — regardless of your size, scale or trade — is creating a terrific business plan. Launching a company without a business plan is like hiking in the Ozark Mountains without a map.
You’re going to need something to guide you when you start feeling lost out there.
Among the issues you’ll tackle throughout the business planning process are:
- Your target market. Who you’re selling to — specifically. Consider age, gender, income, and any other relevant factors you can think of when defining your target market. The more specific you get, the better chance you’ll have at effectively marketing to them.
- Your competition. What product/service folks are currently buying instead of yours, and the companies pose the greatest threat to you.
- The market need. What your product/service will do better than your competition — the need you’ll fulfill that no one else has.
- Your milestones. What you’ve accomplished so far, and what you plan to accomplish in the next 3 months, 6 months, 2 years, etc.
- Your marketing plan. Your initial marketing budget and strategy. Where will you focus your efforts? Social media, email campaigns, billboards?
You’ll also create a mini-pitch and USP (unique selling proposition) to communicate the mission of your business in a concise manner. The former should be one or two sentences, and the latter only a few words long.
Check out our definitive guide for an in-depth discussion of what to include in your business plan — we’ve only scratched the surface with the list above. Because this is such a pivotal point for your new venture, it’s also a great idea to take advantage of business planning software like LivePlan. They provide step-by-step guidance all along the way to help you craft a beautiful, thorough business plan in no time.
Don’t know what kind of business to start?
Our friends over at howtostartanllc.com have compiled a massive list of business ideas, ranging from personal styling to axe-throwing businesses.
If you’re having trouble finding the perfect business idea for you, we encourage you to check them out!
Step 2) Form Your Business
Once you’ve properly planned your business endeavor, it’s time to choose a structure for your business and get it registered with the state of Arkansas. There are quite a few forms your business can take, but here are the main four:
- LLC: Limited liability companies are the most popular because they offer the protection of a corporation without the double taxation or hefty paperwork. Even if you’re the sole member of your company, you can still form an Arkansas LLC to protect yourself from personal liability.
- S Corp: More formal structure than an LLC, with a board of directors and up to 100 shareholders. S Corps aren’t faced with corporate taxation, however — all of the profit is claimed by the shareholders.
- C Corp: The primary differences here are that there’s no limit to the number of shareholders you can have, and you’ll be subject to double taxation. Read through our corporation guide for detailed steps to forming a corporation in Arkansas.
- Sole Proprietorship: The simplest business structure of all — if you’re running a business on your own, you’ll automatically be deemed a sole proprietorship. No need file anything with the state. However, keep in mind that there’s nothing protecting you from personal liability if you choose this option.
Choosing a business structure is a significant step for you (and your team, if you have one), so we advise putting in some research before settling on one. Read through our comparison guide to get a better sense of what each structure would mean for the future of your company!
Once you’ve selected the perfect structure for your business, you need to formally register it with the state (unless you decided on a sole proprietorship, that is) . This will require appointing a registered agent and filing Articles of Incorporation/Organization with the Arkansas Secretary of State.
You may be able to handle this on your own, but if you want to be certain all the paperwork is completely on-point, we recommend working with a lawyer or an online filing service like IncFile. Check out IncFile or one of our other top 7 incorporation providers to get an idea of what these services cost and all they have to offer.
Step 3) Tackle License & Tax Obligations
To be totally compliant with the state of Arkansas, you need to acquire any licenses and pay any special taxes the state requires for your business activity.
Unlike many states, Arkansas does not issue general business licenses, so it’s possible you won’t need to apply for anything at all — but it’s still worth checking out the following resources to make sure:
- Federal: The Small Business Association’s federal licenses and permits page outlines all the business activities that require federal permits, and directs you to the proper department’s website. Their tax article provides a helpful overview of small business taxes, but ultimately you’ll need to head over to the IRS website for details.
- State: The best place to find out about Arkansas-specific business permits, taxes and licenses is on the Department of Finance and Administration website.
- Local: Different municipalities often have their own requirements for businesses, so contact your local Chamber of Commerce to find out if there’s anything you’re obligated to take care of with your city or county.
Covering all your bases ahead of time will allow you to operate your business with peace of mind — risking fines or other legal repercussions simply isn’t worth it.
If you don’t have the time to do all this research independently — or if you’re well-aware that your business is going to need a whole bundle of special licenses — you might want to take advantage of a business license research service. This kind of service will do all the legwork for you, so all you’ll have to do is sign the forms and fill in a few details.
Step 4) Create a Financial Foundation
Your personal and professional finances should never intermingle, so now’s the time to get an EIN and set up a bank account specifically for your business.
Your EIN, or Employer Identification Number, is the federal government’s way of tracking your company’s financial activity — and it’s required to set up a legitimate business bank account.
Even if you’re running a sole proprietorship, this is an important step because:
- You’ll be able to take advantage of waived fees and other perks of business banking
- It’ll help you stay organized in preparation for filing your taxes
- It’ll allow you to better protect your personal assets
When you’re choosing a bank, consider the benefits of local and national options. Local ones like Farmers & Merchants Bank may offer excellent customer service, while national banks may have better online features and more ATMs nationwide. To start off your research, read our review of Bank of America — they’re our favorite bank that operates in Arkansas.
As soon as you set up your business bank account, you ought to sync it with a reliable accounting tool. Whether or not you’re already working with an accountant, this is a great way to take initiative and begin managing your professional finances independently.
Step 5) Finance Your New Business
Now that you’ve set up a business bank account, it’s time to start pouring some money into it. The primary funding method you choose should be based on:
- The ownership structure of your business
- The nature of your product (whether it could attract crowdfunding, angel investing, etc.)
- Your current level of financial security
- Your sales forecast
- Your personal credit
… and a few other factors. For instance, selling your car to fund your business isn’t the best idea for someone who only has one car that they need to get to and from work. However, selling assets may be the perfect fit for someone who has plenty they can part with.
To learn the basics of financing a new business, check out our funding guide. We go over 10 of the most popular funding options and the circumstances they best fit!
The business funding page on Arkansas’ Small Business and Technology Development Center website lists several seed-stage funding and angel investment opportunities. While many of them are specifically for technology-focused businesses, others offer funding for a variety of industries.
Arkansas’ SBTDC also provides free one-on-one business consulting where you can discuss what funding methods will work best for your business based on the criteria above. They have seven locations across the state, so there’s likely one near you!
Step 6) Build Your Brand
It’s finally time to get back to the heart of your business. Building a brand is all about capturing your enthusiasm, your mission and your product/service and communicating it all with your audience in an effective way. There are several factors that play into your brand image, but a couple of the main ones are your business logo and website.
When you’re designing your logo, keep the following principles in mind:
- Be different. Your brand logo presents a great opportunity to set yourself apart. Don’t just try to emulate another business’ aesthetic. Choosing a design that’s distinct from your primary competition is a surefire way to help people remember your new business.
- Color matters. The colors you choose for your logo will make a significant impact on how it’s received by your audience. Choose colors that will arouse the response you’re seeking (yellow feels joyful, blue feels comforting, etc.).
- Keep it professional. It’s essential to recruit a professional designer to create your brand logo. This doesn’t necessarily require shelling out hundreds of dollars — you could get a quality design made for as little as $5 on a site like Fiverr.
Read our guide for a closer look at the dos and don’ts of business logo design!
When it comes to your business website, your logo isn’t the only thing that will impact your audience — the overall design of the website needs to be professional in appearance, too. We think the best way to go about this is to leverage a website builder like StudioPress.
This is a much easier — and cheaper — route to creating a professional website than building one from scratch. Check out StudioPress or some of our other favorite website builders to get an idea of what they cost, and what designs they have to offer.
Step 7) Market Your Business
Finally, it’s time to get going on a step that will never end, and one you’ve been doing in some capacity all along: marketing. Here are a few big-picture pointers for getting the most out of your marketing efforts:
- Know your target market. We already went over this in step one, but it can’t be stressed enough. Knowing your target market — and knowing them well — is the only way to market your business successfully.
- Do one thing well. Instead of trying to master every marketing strategy you’ve ever heard of, focus on doing one marketing activity as well as you can. Why? Because if you’ve done enough research on your target market, you’ll know exactly where to find them.
- Make sure your strategy is measurable. If you have no way to tell whether or not your strategy is generating sales, there’s hardly a point in marketing at all. You need to have a structure in place to inform you of real results — not just vanity metrics like clicks, follows and views.
- Be willing to evolve. If after a few weeks you find that your strategy simply isn’t getting results, you’ll probably need to make some modifications. Don’t be hasty here, but don’t just close your eyes and hope for the best, either — make well-calculated adjustments to your approach based on tangible results.
There’s much more nitty-gritty stuff you need to learn in order to effectively market your business — especially if you’re heading the expedition — but the four points above are surefire ways to improve your marketing efforts.
There are tons of free or affordable resources out there for marketing your business in the modern moment. From scheduling social media posts to calculating ROI, digital tools have totally transformed the world of small business marketing. We include a list of our favorite tools, as well as a more comprehensive marketing discussion, in our definitive guide.