Step 1) Plan Your Business Idea
Before you do anything else, you need to nail down a business plan.
- Your business plan is your quite literally your business’ blueprint for success, and it’s a crucial first step.
- This is where you’ll have the opportunity to strategize and get clarity on your mission, budget, marketing approach, and overall goals.
- Without knowing what your goals are, how do you expect to achieve them?
Too many entrepreneurs breeze over this step because they find it intimidating, but with the resources available, business planning really isn’t as difficult as you might think. With the help of modern software and free online guides, you can hammer out a concise, presentable business plan in a matter of hours.
Depending on the amount of time and money you’re willing to invest, there’s a range of business planning software solutions out there. A great way to dip your toe is to check out our reviews to get an idea of what these providers offer.
For details on the best business planning tools, take a look at our top 7 comparison. Alternatively, if you’d prefer to tackle this without the help of software, use our free business planning guide as a reference to keep you on track and organized. Sure, this part is going to require some laser-focus no matter what, but it’ll pay off in the long run.
Step 2) Form Your Business
Getting your business registered with the state is the next big step, but before doing that you’ll need to figure out what your business structure is going to be.
The major options are LLC (Limited Liability Company), S Corporation and C Corporation.
LLC: Most entrepreneurs choose to form an LLC because it offers some major perks. Forming an LLC requires less paperwork and overall maintenance than a corporation, but still separates you from the company so as to protect your personal assets. You’re also able to choose whether you’d like the business to be treated as a Corporation or LLC when tax time rolls around.
S Corp: Corporations have much more formal structures than LLCs. An S Corp can have up to 100 U.S. shareholders, and must have a board of directors and corporate officers. When it comes to federal taxes, an S Corp is considered a pass-through entity, meaning the company itself is not taxed – only the shareholders.
C Corp: C Corps differ from S Corps in two ways: 1) they can have unlimited shareholders from across the globe, and 2) they’re required to pay corporate taxes, so they face double taxation. Check out our guide on how to form a Kentucky Corporation for a closer look!
If you’re working without any partners, you can also choose to continue operating as a Sole Proprietorship (default for single-member businesses). In this case you won’t need to file anything with the state, but you can opt to file a DBA (Doing Business As). Sole Proprietorships are much riskier, though, as there’s nothing shielding you from business liability. Keep in mind that even if you’re the only member of your company, you can still form an LLC in Kentucky. Kentucky treats SMLLCs (Single Member Limited Liability Companies) exactly the same as other LLCs.
Choosing the right structure for your business is extremely important, so we highly recommend taking a look at our business structure comparison guide before settling on one. It can have serious repercussions if you don’t file with the state properly, so we also recommend considering an online incorporation service to make sure you don't gloss over any important details.
Step 3) Tackle License & Tax Obligations
Depending on the nature of your business, there are dozens of permits, licenses and taxes you may be responsible for.
Unfortunately, this is another area where there’s really no margin of error -- claiming ignorance won’t keep you from getting fined. But luckily, you have plenty of resources at your disposal to help set you up for success!
- Federal: The U.S. Small Business Association website is the best resource for learning about federal licenses and permits for your business.
- State: The Kentucky One-Stop Business Portal website should tell you everything you need to know about Kentucky license and permit requirements and state tax registration. However, we noticed it’s a little glitchy right now from a recent update, so you can also contact the Kentucky SBA District Office as an alternative.
- Local: For city or county-specific requirements, you’ll need to contact your local Chamber of Commerce.
If you’re concerned about something slipping through the cracks, you can always recruit the help of a Business License Service. These companies will do all the research for you, down to the municipal requirements, and can even prepare all the necessary documents on your behalf for an extra fee.
Step 4) Create A Financial Foundation
Starting off on the right foot financially is essential to protecting yourself and your business.
One practice that’s required for a solid financial foundation is keeping your personal and business accounts completely separate. If you’ve already slipped up on this step, there’s no use crying about it, but it’s definitely time for you to open up a business bank account.
In order to open a business bank account,
- You’ll need to have obtained an EIN (Federal Employer Identification Number). If you haven't yet, the best way to go about it is to apply for free on the IRS website.
- You’ll need to have your Articles of Incorporation and other important documents from steps 1-3 handy in case the bank wants to see them during the application process (requirements differ).
We encourage you to shop around Kentucky-based banks and compare their features and benefits for businesses. Typically, local banks are more small-business friendly, but there are also some serious perks to working with a national bank. Comparing the local and national benefits is going to require some research on your part, but luckily we’ve already done half of it for you here!
Once you’ve managed to totally separate your personal and business accounts, you’ll be on the right track. Keeping orderly finances is your next step - and one that never ends. If you don’t have the resources to hire an accountant yet, accounting software can be a brilliant solution. There are tons of programs that are user-friendly, secure, automated, and affordable.
Step 5) Finance Your New Business
Thanks to the internet, we have more access business funding in the present moment than ever before. From crowdfunding to angel investors, there are tons of opportunities for financing your business -- but not every method is right for everyone.
The Kentucky Small Business Development Center can be a great help when it comes to choosing a financing method.
- They offer free financial consultations to help you identify what funding approach will work best for your business based on your product/service and financial performance.
- They’ve got a dozen locations across the state, so odds are you’ll be able to find one nearby.
Kentucky’s Cabinet For Economic Development is another awesome resource.
- On their website you’ll be able to get information about, and even apply for, fund-matching programs, small business tax credits, and other special methods for accessing capital.
- Their Locating and Expanding In Kentucky page gets into the specifics of Kentucky’s most fruitful incentives and financial programs.
- Regardless of what primary funding approach you end up using, their incentives are definitely worth taking a look at -- if only to know whether or not your business qualifies.
To start generating ideas for financing your business, head over to our How to Finance a Business guide where we explore various funding methods and the circumstances they’re best suited for.
Step 6) Build A Brand
Another result of doing business in the internet era is that a professional brand presence really isn’t optional anymore: it’s necessary for your business’ success.
The first step you can take toward building your brand is creating a professional logo. Seems trivial, but there are actually a lot of things to keep in mind when designing your logo.
- From choosing emotionally moving colors to including subliminal messages in your design, the right logo can do a lot for your business.
- To get going on a killer logo that truly encapsulates your brand, check out our guide to choosing The Perfect Logo For Your New Business!
The second step is to craft a beautiful website that represents your business. We realize creating and maintaining a website sounds intimidating, especially if you aren’t tech-savvy, but there are tons of user-friendly web-building software out there.
Business website builders like StudioPress make it super easy to craft a gorgeous, professional website without the guesswork -- and $24 a month is nothing compared to the financial benefits of a having a beautiful website to illustrate your brand’s mission. Our buyer’s guide outlines and reviews the top 6 best website builders for entrepreneurs.
Step 7) Market Your Business
You’ve been doing this all along, at least to some degree, and you created an initial marketing strategy in the process of writing your business plan. But once you’ve crafted your brand image, it’s time to really hammer down.
What is marketing your brand actually going to involve? Who’s going to be in charge? How flexible is your marketing budget, now that you’re a little further down the road?
Here are a few important rules of thumb for marketing your business:
- Focus on doing one thing well. Don’t try to master content marketing, SEO, Twitter, Facebook and Instagram simultaneously. Concentrate on executing one approach flawlessly.
- Stick with your strategy. Once you’ve laid out a marketing strategy, stick with it for a while. If you’ve invested the necessary research to find out where and how to reach your target audience, a little patience will most likely pay off.
- Analyze, analyze, analyze. The only way to know whether or not your marketing strategy is working is to analyze the results. If after a few months you find that your target audience isn’t actually where you thought they’d be, you’ll need to adjust your strategy. Successful marketing requires a willingness to evolve.
This, of course, is just the tip of the marketing iceberg. For a more comprehensive exploration of small-business marketing, we encourage you to read our definitive guide.